“Nothing focuses the mind like a hanging,” remarked writer Samuel Johnson. Let us hope that the Arizona Legislature takes the remark to heart.
The Legislature will convene in January to face the same, deepening budget crisis it so abjectly failed to address this year.
Last year, instead of dealing with the collapse of sales tax revenues, lawmakers got distracted by a sideshow debate on the role of local police in enforcing immigration laws. That worked fine for Gov. Jan Brewer, since it reversed her dwindling political fortunes and contributed to the breathtaking rout of Democrats running for the Legislature and statewide offices.
So now the Republicans have unchallenged control of the government — which gives them the unavoidable responsibility for the solution.
So, the financial hanging’s due in the morning. We certainly hope the Legislature is focused.
The incoming lawmakers face a daunting challenge.
The state’s dangerous reliance on sales tax revenue for 55 percent of its general fund revenues left the state tragically vulnerable to the housing bubble and the recession. This heavy reliance on growth and consumption taxes produced a shocking one-third drop in state revenues, just as the rise in unemployment and poverty made the state safety net for the poor vital.
The Legislature responded with a series of desperate, short-term fixes and inflated, unfocused rhetoric. Lawmakers sold off state buildings and leased them back, they cut federally funded programs and then restored them. They approved a further increase in sales taxes. They borrowed money and swept taxpayer created funds. They cut university spending, forcing a record-breaking rise in tuition. They asked voters to repeal previously approved funds for special purposes — like the state lands and early childhood programs.
The maneuvers got them through last year — but just barely.
Now, the state faces an $800-million deficit between now and June and a $1.4-billion deficit for fiscal 2011-12.
We hope the Legislature will not focus on the hanging at hand and embrace the hard choices and deep analysis the problem demands.
The Goldwater Institute says that public education makes up 42 percent of the state’s general budget. Then comes items like health, welfare and other social service funding, which brings the amount to 70 percent of the state budget.
Add in university spending at 11 percent and prisons at 9 percent and you have 91 percent of the budget. The remaining 9 percent goes to the judiciary, the Legislature, regulatory agencies, and the governor’s office. Even if you eliminated the last group completely, it is a drop in the bucket when trying to balance the state budget.
No one wants their part of the budget cut. All the parties to the budget say cut somewhere else, “you can’t cut us.” Well, where do you cut? There is going to be some shared pain.
Everything must be on the table, the Legislature needs to go back to 2005-06 fiscal year and look at all the new programs and new spending that were enacted when money flowed into the state. The flow is over and now it is time to decide what can be cut, what is really needed.
The block wall everyone wants to get around is state revenue. Unlike the federal government, the Legislature cannot print more money. Its expenses must fit within the block wall. Everyone can’t have what they want.
The Legislature must consider the costs and benefits of every single state program and pare spending to the bone. But they must also spare functions essential to reviving the economy — which surely includes adequate funding for schools, community colleges and universities.
Unfortunately, K-12 spending accounts for 42 percent of the general fund budget and universities for another 11 percent. That means the Legislature has precious little room to maneuver when it comes to deep spending cuts.
Unfortunately, we suspect that once the Legislature has made every reasonable reduction, lawmakers will still have to consider an overhaul of the tax code both to make state revenues more stable and to provide the minimum funding necessary to ensure that the state economy can recover and retain its competitive edge.
We trust that the Republicans who control both houses will embrace tough, practical real-world solutions that will not destroy the basis of the economic recovery that holds the only real hope for the future.