Tuesday, May 5, 2009

PAChyderm Coalition: Support the Republican Budget

Our Conservative Republican State Legislators have been working under very trying circumstances to fix the financial mess left from the out-of-control spending proclivities of former (I never dreamed of how good that word would sound) Democrat Governor Napolitano. They are working now on the final details for a balanced budget. In summary, the Republican Legislators propose to:
Reduce permanent spending levels by over One Billion Dollars over two years with
NO tax increase
NO long-term borrowing
NO additional or increased roll-over gimmicks
The nearly 3 Billion Dollar predicted shortfall in the 2010 budget would be made up by:
Spending cuts of 670 million dollars
Federal Stimulus funds of 900 million dollars
Fund transfers of 400 million dollars
Use of school district excess cash balances of 300 million dollars
Municipal rebates of excess municipal impact fees of 210 million dollars
Accessing County Unencumbered fund balances of 55 million dollars
Plus a multitude of agency reductions not itemized here

The current draft budget proposal is a great budget proposal when looked at in the light of the current economic situation. This budget proposal reduces permanent spending over 2009-2010 by over one billion dollars annually into the future. This budget proposal makes use of the one-time federal stimulus funds while protecting the future by eliminating "strings" at the conclusion of the federal funding. The cities and counties, school districts, etc. have billions of dollars hidden in their "rainy day" fund balances that are not encumbered. The only layer of government in Arizona that is not flush with cash in the bank is the state government. The state's budget crisis is driven by the reduction in revenues to the state by 46% over the last two years, while state payments to the cities, towns, counties and school districts have been reduced less than five percent - if at all.

Counties alone have over a billion dollars in cash fund balances at the end of last year - that is only counting the unencumbered and unobligated funds. Maricopa County last year invested the money that they have overtaxed and accrued over $140 million in interest on that money.

School districts had almost $2.5 BILLION in fund balances at the end of FY 2008 - an increase of over $1 BILLION in those balances in just the last four years while the percentage of dollars to the classroom has declined to an all-time low.

07-08 Annual Rpt 4 Az Dept of Ed
School districts earned over $150 million last year from the investments of their over-taxation - in many cases in violation of the law - and did not report those earnings to their constituents. That is $17 million dollars MORE than the 2009 reduction that was labeled as catastrophic, massive, devastating, killing education, etc. In addition, K-12 schools received $186 million in federal stimulus money earlier this month - $53 million MORE than the state reduction - and that money was labeled as too little, too late.

Click here for some interesting facts taken from the Arizona Department of Education reports about Arizona's K-12 schools:

# of students increased from 859,023 in 2004 to 951,117 in 2008 a 10.7% increase.

# of administrators increased from 2,804 in 2004 to 3,305 in 2008 a 17.9% increase.

# of teachers increased from 47,396 in 2004 to 53,883 in 2008 a 13.7% increase.

Avg. teacher salary increased from $42,324 in 2004 to $49,331 in 2008 a 16.5% increase.

Statewide, Superintendent's salaries increased from $12,837,427 in 2004 to $19,188,361 in 2008 a 49.5% increase.

Total state aid increased from $3,179,994,562 in 2004 to $4,453,747 in 2008 a 40% increase.

Many school districts politicized the situation by refusing to purchase toner, paper, etc. for the classroom to convince the teachers, students and parents that they were without funds. For schools, the problem is not appropriations, it is misfeasance, malfeasance or nonfeasance of Prop 301 funds by the administration of the school districts. It is time for teachers, classified personnel, students, parents and every property owner across the state to demand a better product from their CEO's (the Superintendents) or they should be summarily dismissed.

Returning to the basics of the state budget situation, one thing is a certainty. The state cannot fiscally exist if it continues to support all of the other government entities at the same funding levels while realizing a major shortfall in its revenue sources. It is past time for state government to reduce its expenses - and that includes payments to other government entities.

Remember that revenues are down 46.3% from two years ago. It would take an increase of 46.3% in new taxes to balance the budget if expenses are not brought into line. That would mean a three cent increase in the sales tax, approximately a fifty percent increase in state property taxes, income taxes and gas taxes. Even the most ardent big government advocate would not recommend such a devastating economic hit to our economy.

Any tax increase would do nothing more that put an additional burden on our citizens and drive new business to other states with lower tax rates and less regulations further exacerbating Arizona's economic recovery. It is time to bring government into fiscal balance by reducing expenditures and cumbersome regulations - and doing so now. The draft budget proposal returns sanity to the appropriations process for the first time in this twenty first century.

It is time for the taxpayers of Arizona to weigh in on the budget proposal and let the legislators know you support their efforts. E-mails, phone calls, snail mail to them is a start. The next step is to make sure your family, friends, neighbors and co-workers have the story of this budget because the mainstream media will not give them the truth. You are the key to a Republican, smaller government, more personal freedom, no new taxes state budget.

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