State Budget

 A Goldwater Approach To The State Budget

One of the problems our legislature has is it can’t stop cutting taxes and revenue at the same time and that has lead to many of the budgetary issues our state faces today. In his book “Conscience of a Conservative,” Barry Goldwater wrote:

“I believe that as a practical matter spending cuts must come before tax cuts. If we reduce taxes before firm, principled decisions are made about expenditures, we will court deficit spending and the inflationary effects that will invariably follow” (p. 41).

Serious students of Arizona’s budget problems will tell you that our past tax cuts have never produced enough revenues through growth to make up the size of the cuts. This begs the question are tax cuts, then, good public policy?  They have been a significant contributor to the state’s inability to invest in education, infrastructure and economic development, which is why we had to take, in effect, a 20-year “Title Loan” out on our state’s capitol buildings in order to balance the budget for one year.  This approach is akin to a growing family deciding to take a pay cut in order afford the staples they need to raise their family. I know of no family who would find this a wise course of action and neither should state government.

The legislature should refrain from any more tax cuts until we see whether the current cuts produce the economic growth the proponents promised. If they aren’t doing the job, why continue doing them? We should also press proponents of tax cuts to bring to hearings actual business CEOs who believe tax cuts are needed to keep them in business. Without those personal testimonies, all we have are lobbyists telling us this is what business wants, when the best thing to do is hear it from the business owners themselves. The best way to generate revenue is to help business create and retain jobs and we need to be much smarter about how we do this than following a path that even Barry Goldwater would dismiss as a bad approach.

Poaching Agency Funds

Another legislative practice that needs to end is the one of “sweeping” funds from state agencies to make the state budget appear balanced. The fees paid to state agencies for access to public areas like state parks,  and license and permit fees are paid by those agency’s customers and are in place to help those agencies underwrite their costs, thus reducing the overall costs to taxpayers. If these agencies earn them, they should keep them, especially if it helps them perform their mission and reduce costs to the taxpayers and the General Fund.

The funds should be restricted to the agencies that collect the fees. Their customers most likely paid them with the belief those funds were staying in that agency, otherwise, why would they not be receiving general funds. Sweeping these dollars does a disservice to the citizens and the department trying to carry out its legal mission.