The Arizona Republic
The Arizona Republic
Arizona is in its 12th straight year of drought, but it’s raining at the state Capitol – at least when it comes to money for roads.
A proposal to drain the state’s $650 million “rainy day fund” to pay for highway construction is gaining ground. Opponents argue it is not how the fund was meant to be used.
A bill that would take $450 million from the fund to accelerate road building is advancing easily in the state Senate. It’s not such easy sailing for another proposal that would take $199 million for school construction from the fund. That bill was held last week in the face of anticipated defeat.
Together, the two proposals would almost wipe out the fund, which currently has about $655 million and is “full” for the eighth time since it received its first deposit in 1994.
Lawmakers are split over the wisdom of dipping into the fund, which was created to tide the state over in tough economic times. The fund is considered essential to providing basic state services during a recession.
Gov. Janet Napolitano has offered another approach to raising money for highways. She would extend state bonding to generate $500 million to speed road projects.
Sen. Bob Burns, R-Peoria, contends that the state’s transportation needs are an emergency. He argues it makes more sense to spend the cash on hand to speed up road construction than Napolitano’s proposal to borrow the money.
Both the Goldwater Institute and the Arizona Tax Research Association oppose the idea of breaking into the fund.
“They’re for the Great Depressions, the Hurricane Katrinas, the North Dakota flooding of a couple years ago,” said Darcy Olsen, president of the Goldwater Institute. “These are true emergencies that are unexpected.”
The fund has been tapped only four times since its creation, state fiscal reports show. Most of it, $280 million, was used to prevent state budget deficits earlier this decade. It also was used to bail the state out from its financial obligations after the botched alternative-fuels program cost $100 million, and to help build a $37.5 million state hospital.
There are other ideas floating around the Capitol, although their fate is uncertain.
Rep. Tom Prezelski, D-Tucson, has a bill that would tie increases in the state’s 18-cent gas tax to inflation. The state gas tax has not changed in 16 years.
Business groups are in the midst of plans that could result in a call for a hike in the state sales tax to pay for roads, but they aren’t expected to make any specific proposals this year.
The rainy day fund is a tempting pot of money that allows lawmakers to avoid tax hikes and the interest costs that would come from increased bonding.
If a bill to take money from the rainy day fund does pass, most lawmakers expect Napolitano would veto it.