Friday, October 12, 2007

Goldwater Institute: Gov. Napolitano's proposal to balance budget with debt unconstitutional

By Tom Patterson

Say your family finances hit a rough spot. What should you do? One option would be to pull out the plastic and rack up credit card debt. You don't have to be a financial genius to understand that's not very smart. Yet that is pretty much Governor Napolitano's plan to address Arizona's revenue shortfall.

Checkbook <> State government in Arizona has gorged itself for the past five years, growing at a truly unsustainable 12 percent rate. State revenue is already $300 million under budget for the fiscal year that began July 1, with the total deficit projected to hit at least $600 million.

Matters are even more grim for next year. This year's budget assumed a surplus of $400 million from last year (which didn't entirely materialize). So next year's budget will begin with a $1 billion gap between current spending and revenue levels.

Even aside from the dreadful policy implications, there are problems with the governor's proposal. For one, her proposal to use debt to balance the budget is unconstitutional. The Constitution categorically prohibits the state from contracting for more than $350,000 of debt.

The governor is using debt to substitute for a cash appropriation to balance the budget and that is specifically what the state founders intended to prohibit. The practice of forcing future generations to pay for things we want today would have been unthinkable to our fiscally responsible forefathers.

Ultimately, there is no realistic choice considering the situation except to enact real spending cuts, politically painful though that may be.

Dr. Tom Patterson is chairman of the Goldwater Institute, a former state legislator and emergency room physician.

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