If you thought 2009 was a sick year, wait until you get a load of 2010.
Arizona was seriously ill in 2009 but it will go on life support in 2010.
It’s not that we want to pour a cold bucket of water on all the New Year’s good wishes our fellow citizens will offer each other this week and next, but the fact is there’s going to be little Happy about the New Year.
To recap 2009, the state budget in January, which is halfway through the fiscal year, was still out of whack by $2 billion. The Legislature cut $1.5 billion and rolled the rest into this fiscal year. This fiscal year’s budget, which we’re halfway through, was out of whack by $4 billion, but $1 billion from the federal economic stimulus bill and a (still pending) sale of state buildings, lowered that to about $2 billion. Some legislative tinkering the past few weeks whittled it to $1.5 billion.
The result of those cuts was less money for schools, universities and social services. As the recession deepened in Arizona in 2009, putting a quarter-million Arizonans out of work, state government contracted and offered those out-of-work thousands a social safety net chopped full of holes.
At the local level, municipalities dependent on sales taxes discovered the folly of basing government funding on a fickle tax that rises and falls with the economic tide.
Now, rather than being bulwarks for their people against the devastation of unemployment and underemployment, they’re adding to the economic misery by laying off staff and cutting services.
As 2010 dawns this week it would be great to think the worst is behind us. It’s not.
While the rest of the country slowly climbs out of the recession next year, state economists predict Arizona’s economy will continue to fall; not hitting bottom until near the end of 2010 or perhaps early 2011.
And as with this past year, don’t look to the state to do much about it. The Arizona budget can’t be balanced. Federal and voter mandates require the spending of $6 billion on health care for the poor and on K-12 education. The state will only take in about $6.4 billion in taxes. There are numerous vital functions of government that will have no funding, such as imprisoning criminals, investigating child abuse, certifying teachers and issuing licenses to doctors and nurses. How the state is going to function next year is a mystery.
The current batch of legislators has repeatedly failed to refer to voters a measure of reforms necessary to extricate the state from the spending mandates. They’re either too craven to do what needs to be done, or too gleeful that the state is in this mess.
It is highly likely that much of what we have come to expect from our government, schools, prisons, courts, parks, business regulation and so on, will be vastly curtailed or eliminated this year.
The state’s Republicans have long advocated for limited government. Arizona is going to find out what that looks like in 2010.
Meanwhile, at the local level, layoffs will be legion and brutal fights over tax increases will tie up county governments.
Counties have mostly escaped the budget morass the past two years because they rely on property taxes that are collected on valuations that lag 18 months behind the current fiscal year.
The real estate bubble finally bursts for counties this budget year. They are faced with tax collections that will be 15 percent or more below what they took in last year.
They will either have to cut staff and services or raise taxes. Those fights should be brutal.
As we ring in 2010, perhaps a more fitting salutation for Arizonans Friday than “Happy New Year” is “Good luck in 2010 (‘cause you’re gonna need it).”