Tucson Citizen.com
Caveat Lector - Politics, Government and the Free Press – by Mark B. Evans

Chicken Legislature needs to call special session and solve budget deficit

by on Oct. 23, 2009, under Editorials, Politics

We’re in serious trouble.

The state’s economy has yet to hit bottom and tax revenues continue to fall while demand for state services and benefits increase with the number of unemployed.

The state is broke and getting broker, having to borrow $600 million from the federal government to pay rising unemployment insurance benefit claims, according to a story Thursday in the Arizona Republic.

Legislators need to get back under the copper dome and fix the budget mess.

Legislators need to get back under the copper dome and fix the budget mess.

So what’s the Legislature’s plan to solve these burgeoning fiscal problems?

Wait until January when the next legislative session convenes (or maybe next month, according to a Republic story Friday.)

That’s ridiculous and cowardly. We need action now.

According to a Joint Legislative Budget Committee report released Thursday the state’s budget deficit for this year has grown to $2 billion.

Nearly 1 in 10 Arizonans are out of work and nearly 1 in 20 are working in jobs that pay them less then they should be earning. The only other states with worse economies than Arizona are California and Michigan.

When Gov. Jan Brewer vetoed part of a budget bill Sept. 4, which the Legislature had submitted Aug. 25 after a two-month special session called specifically to pass a balanced budget, she knocked the budget out of whack by about $1 billion, the JLBC estimated at the time.

But after a six-month regular session bickering over the budget and two more months of a special session, no one in the Legislature wanted to do anything about it.

In less than two months, the budget hole got another $1 billion deeper and by all estimates will keep getting deeper. University of Arizona economist Marshall Vest told the Republic last week the state economy might not bottom out until the middle of next year. And if it does, the climb out of the hole will be long and slow.

The budget deficit for this year could be as much as $3 billion by January with six months still to go in the fiscal year.

Because huge swaths of the state’s budget are protected by voter mandates, the Legislature is left with a Hobson’s Choice to balance it: Make massive cuts to social programs, public safety agencies and public education or raise taxes.

The governor wants a tax increase but anti-tax stalwarts in her own party prevented one from being submitted to voters this year and are likely to continue their staunch opposition if another special session is called.

Democrats are united in their opposition to further cuts to education or social services and while Republicans might talk tough about education spending, they know that if they eviscerate public school funding and force massive teacher layoffs – thereby cramming 40 or 50 kids into a classroom – the backlash will be severe and long-lasting.

So our legislators do nothing.

Hiding under the bed and hoping the big, bad budget will go away is not how you conduct yourself as a public servant.

We’re broke. Our chicken legislators need to go back to Phoenix and solve the problem: drastically cut spending or raise taxes. Or both.

There are no other choices.

This entry was posted on Friday, October 23rd, 2009 at 10:53 am and is filed under Editorials, Politics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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  • radmax

    So many entitlements, so little revenue. Quite a dilemma…

  • tiponeill

    It’s always hard when you select your representatives by how ideologically bat-*&^% they are, and then expect them to legislate in a reasonable and sane manner.
    I can’t understand why you think these folk can perform better if you call them back into session than they did originally – there hasn’t been any sudden rise in statewide IQ – if the tea parties are any indication the opposite has occured.
    Do you think next year’s legislature will be any better? The only think keeping the State going was a Democratic governor and we’ve lost that.

    • Mark B. Evans

      I don’t disagree but these are the people we’re stuck with. If the problem is to be solved they are the ones who have to do it.
      The deficit is more than just a number with a lot of zeroes. The state is borrowing money to operate. That borrowing comes with interest rates, which just makes the fiscal imbalance worse.
      We may soon get to the point where creditors stop giving the state money and then we’ll be really broke, not just figuratively. I can’t even begin to imagine the chaos that will cause.
      By waiting until January to solve the problem, especially if the solution is a tax increase, is that you start running out of months to collect the taxes needed to balance the books before the end of the fiscal year.
      Any leftover imbalance gets added on to the next fiscal year necessitating large spending cuts to go along with the tax increase. But if the goal of Democrats is to protect social spending and education, you’ll need a really big tax increase to prevent those drastic cuts. And that will only harden the resolve of anti-tax Republicans who will insist on the drastic cuts first. Which means continued stalemate.
      And the JLBC is already predicting a budget imbalance of $3.3 billion for FY ’11, which starts July 1.
      And since you need 2/3 of the Legislature to pass any tax increase, there’s a really good chance it won’t, and so we’ll have to go back to letting voters decide, which means a May election at best and a tax that won’t go into effect until the new fiscal year starts.
      There is a distinct possibility that the Legislature could face a $6 billion budget shortfall for FY ’11 – $3 billion carried over from this year and $3 billion from next year. That’s nearly 100 percent of next year’s expected tax revenue.
      I don’t think most people truly understand just how bad this is and I think it’s why the Legislature is ducking it. The problem is so enormous they have no idea what to do about it.
      Like I said, we are in serious trouble. And that’s not hyperbole.

  • radmax

    Appears to me the pondering elephants and jackasses are equally adept at fiscal irresponsibility.

  • leftfield

    Be careful what you wish for, you just might get it. 

  • ldonyo

    The real problem seems to be that no one in the legislative or executive branches is willing to accept any solution that is not entirely their own creation and none of them are willing to work with anyone other than their own cronies. Given the gravity of the situation no idea from any source should be dismissed until it has been examined. Unfortunately, the likelihood of that happening is an order of magnitude less than the odds of winning the Powerball jackpot six times in a row.

  • http://pointmantucson.yuku.com/ mike_brewer

    I have never understood why a miniscule tax on commercial, industrial and office rents is not levied in times like this. No Dad, No Mom, no car! Meaning if the State is not solvent who wants to do business here? 

    Why is the commercial rental industry a forgotten and protected class of revenue source? And why does this question persistently get dismissed? Tells you who runs the State eh?

    With a large portion of  commercial rentals, (franchises), domiciling out of  State,  Arizona does not see the profits anyhow, save, low income jobs. The irony being that the lack of sales tax is one reason we are in the red as it is. My point is a simple one, you gotta pay to play.

    Most all of our neighboring States have a Real Estate Transfer tax? Why is this not even considered? We would rather go to debtors prision before touching the idolatrous real estate industry— the second largest lobby in DC.   We made our bed and are sleeping with the wrong partners.

    A thought to conclude with….if the State of Arizona implements sale/leaseback schemes for an instant fix, Katie bar the doors, the hogs will come to feed. This will never go to the voters for approval,and the citizens will never know who the investors are. It will be a close door desparation  move and your great-granchildren will wonder why we even hold  elections.

    And  we are worried about Socialism on the national scene? Plenty for all right here in  the maverick state of Arizona

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