Wednesday, October 15, 2008

Goldwater Institute: Refusing to reduce budget like rearranging deck chairs on Titanic

By Byron Schlomach, Ph.D.

In 1970 when an oxygen tank on Apollo 13 exploded, the choice was not whether to land on the moon. The choice was between not landing on the moon and certain death of all on board. Likewise for the passengers of the Titanic; the choice was to find a lifeboat, or die. Ignoring a disaster in hopes that it will go away usually makes the disaster worse.

Arizona's state budget is such a disaster. Just three months into the fiscal year, the revenue shortfall is $300 million. The state appears headed into a $1 billion financial hole, better than 10 percent of the general fund budget.

About 74 percent of the general fund budget is devoted to health and education. Eight percent goes to the state's welfare agency (partly for health programs). Of the rest, 10 percent is spent on corrections and 8 percent on other agencies.

It is impossible to responsibly respond to the budget disaster without taking the admittedly difficult step of reducing spending on these programs. The choice is not between cutting and spending. It is between cutting and putting the state in receivership.

Declarations that these budget areas will not be cut and complaints that the federal government owes Arizona money are tantamount to continuing the party on the Titanic. Setting aside the fact that the federal government is not going to pay what they owe us, even if they did, it would only cut the deficit in half. Passing the buck will not fix the problem Arizona lawmakers need to solve now and on their own.

Byron Schlomach, Ph.D, is director of economic policy at the Goldwater Institute.

Learn more:

Goldwater Institute: "Dollars and Sense: How Arizona's Spending Choices Affect Our Future"

Joint Legislative Budget Committee: Economic and Budget Update

Joint Legislative Budget Committee: Highlights of the Fiscal Year 2009 Budget

Arizona Republic: Deficit means tough calls for the state

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