Thursday, March 13, 2008

Act NOW to slow down AZ’s Budget Rollercoaster

AZ government needs an effective spending limit

On a graph , the Arizona budget looks like a rollercoaster. The politicians allow spending to shoot way up during years with strong economic growth, and then come crashing downward during economic slowdowns, when revenues fall off. Arizona is now looking at the LARGEST BUDGET DEFICIT IN THE NATION, as a portion of its state budget.

On a themepark rollercoaster, the screaming during the big drop means that people are having fun and enjoying the ride. But with the state budget, the screaming does NOT mean the people of
Arizona are having fun: government employees are facing layoffs, cities and agencies are struggling to balance their budgets, and desperate politicians are starting to talk about increasing taxes (including property taxes) in order to sustain high levels of spending.

It doesn’t have to be this way.

This session, some legislators have introduced HCR 2038, a referendum bill that would allow
Arizona voters in November to reduce the state’s existing constitutional spending limit from 7.41 percent of personal income to 6.4 percent. View this graph to see how the 6.4 percent limit would work to prevent excessive spending during years of strong economic growth.

The 6.4 percent bill is a fiscally moderate proposal: It would cap the size of the
Arizona government—as a portion of the economy—where it is right now. The limit would allow state government to grow in the future, but only as fast as the state economy. If a legislator believes that government should get larger as a portion of the economy, he or she is a Big Spender, not a fiscal moderate.

The state Republican Party supported the 6.4 percent spending limit in a resolution (we hope to get similar resolutions from the state’s other parties), and the bill has been approved by the House Appropriations Committee.

We need HCR 2038 to go to floor votes in the Arizona House of Representatives and the Arizona Senate.

Please contact your legislators today and ask them to support the 6.4 percent spending limit. We need to slow down
Arizona’s budget rollercoaster, and stop the dangerous cycle of boom-and-crash spending.


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