Voters finally get a choice

I could hardly believe my eyes this morning when I read the front page of the paper.  Apparently, the legislature is finally going to let the voters decide on the tax issue.  After months and months of back and forth, we’re finally where we should have been months ago. 

In the end, it was a bipartisan effort that got this thing done, with Republicans and Democrats both voting in support.  On both sides of the aisle, people are still fairly unhappy, which just may mean that its the right thing to do.  Perhaps Democrats also finally realized that they were going to have some trouble if they didn’t finally figure out that they needed to be FOR something. 

Sure, its only a part of the overall budget fix, but it is the part that has been debated the hardest.  The good news is that we will finally be given a chance to have a say.  Its our turn to decide what kind of services we want the government to provide.  We have already seen some of the major cuts that are on the horizon.  The question will be, should the Government make even more cuts, or should we look to temorary revenue to keep basic services while the economy recovers.

The next few months should be very interesting.

Tax cut plan good, but what about the budget plan?

Needless to say, I was very excited earlier this week when I heard that the Arizona House Republicans had a plan.  “Finally!” I said to myself, “Maybe someone is going to get something done about this budget debacle and start moving on to fix the state.”

From the look of their plan, it looks like they are going to skip over A completely and move right to B.  The plan that was proposed is a sweeping set of tax cuts, aimed at creating jobs and attracting new industries to Arizona.  A noble idea to be sure, but it does leave one question, what about the mess we’re in right now?  I understand that attracting business is going to be the key for our long term growth, but they aren’t moving here tomorrow.  And even if they were, they aren’t generating $1.5 billion in the next six months and over $3 billion in taxes next year.

If their plan sounds familiar, it is.  From the sound of it, its virtually the same package of tax cuts that we’re proposed last year along with the temporary increase in the sales tax.  Now, they are presenting only half the package, which is like presenting all of the frosting, but forgetting to bake a cake.

Don’t get me wrong, I think their plan to reduce taxes and make Arizona business friendly is an important part of our path to prosperity.  I have nothing against the plan and think it should be a major part of our long-term goals now.  However, I do have to say that it is a convenient distraction to draw the true focus away from the daunting budget picture that kicks off this election year.

So what’s the plan to fix the budget right now?  More cuts?  I’m sure the “close the deal” fund will work well when the employees pass by all of the closed rest areas when they move their families into the state.  I’m sure CEOs will be lining up to move their executives here when Arizona is struggling to provide public safety and education to our children.

Say, brother, can you spare a million?

There is a new name in the Governor’s race, and he’s got big money.  “Buz” Mills made a big splash announcing that he pumped over $2 million in personal cash into the race, and he wants to make sure everyone knows it.  While he may be big on money, right now, he appears short on specifics.  Don’t go looking to his website for answers, either.  Right now, its just his name, seven words, and an Arizona flag that appears to be made from silk sheets.  Fancy.

Just like all of the other candidates, he needs to come to the table with a plan.  This is especially true since he is trying to play the entrepreneur card to counteract any accusations that he is trying to “buy” this election.  Don’t get me wrong, money is not a bad thing.  Now that he has money, he can focus his time on putting together some policy plans. 

Perhaps, his financial recovery plan can be to offer the state a personal loan!  Heck, if he donated the $2 million to the state, the current budget hole would only be $1.498 billion for this year.

And the beat goes on

There is a special session called for today, but it doesn’t look like there is going to be anything special about it.  This session, like the one a month ago will not address any sort of tax election or any attempts to reduce voter mandated spending.  So, what are we left with?

More Budget Cuts.

As I have said before, it is abundantly clear that more cuts need to be made.  The question is, where?  And how do we continue to move down this path not knowing if there will ever be enough cuts to put this budget back on track?  For those who think that we can cut our way out of this problem, how come it hasn’t happened already?  How come that is not on the table for this special session?  If it is so easy to do, and everyone is on board, why hasn’t it happened?

Everyone seems to be still standing around not willing to work together to get this thing done.  Until the state runs out of money, there is going to be no motivation for them.  So, as it is, the beat will continue to go on, and this mess will continue unsolved.

ICEBERG!!!

The current state budget hole sits at $1.6 billion for this year, and more than $3 billion for next year.  More major cuts are coming, but that still may not be enough.  The iceberg is upon us and we are still quibbling on what should be done to fix the state.

First, it’s abundantly clear that more significant cuts will have to be made.  $300 million was a good start, but more will have to be done.  Let’s face it, with so much of the state budget wrapped up in education, there are going to have to be more cuts made in that area.  It’s almost like some people just woke up to this fact.  “Holy crap, they are cutting education?!?  Why isn’t anyone doing anything about this?”  Well, fixes were offered up, and they failed to get enough votes.  So now, we are left with cuts.  Thank the Democrats and a handful of Republicans for not fixing the problem.

Now, how much to cut?  Some people say cut all the way to balancing the budget.  Well, where should the state cut?  I’m all ears.  Apparently, cutting education is bad.  So is closing the rest stops.  Everyone wants the state to make big cuts just like a regular person does, but they complain with each loss of service.  We are still stuck with the notion that there is magical money out there that should found and cut.  Anti-tax rhetoric grows, but it is not buoyed with any connection to reality – no definitive cuts offered, no real solutions found.  But hey, it sounds nice.

In fact, others think that if we cut even more taxes, the money will start rolling in.  Ah yes, I bet people are going to run to Arizona because the taxes are even lower.  Who cares about the fact that there is no good schools for their kids and public safety is at a bare minimum.  Who needs a quality of life anyway?

The reality is, either stop complaining about the cuts that the state is making, or get on board with letting the voters decide.  Standing on the sidelines doing nothing is not a solution.

Yet another legislative FAIL on the budget

For those of you counting at home, taxes are bad and we shouldn’t even have a chance to vote on them.  Now, there is a new wrinkle, apparently now cuts are bad too.  At least, any policy changes that come along with the cuts are bad.  One Republican Senator decided not to show up today, thus grinding the latest special session to a halt.

Even less surprising, the Democrats also voted against the deal, proving once and for all that they really aren’t FOR anything.  Sure, we get that the wingjobs in the GOP wing will stop at nothing to gring their majority to a halt, but the Democrats are the most perplexing – not voting for a tax, but not voting for a cut either.  They are literally standing on the sidelines and no one is calling them out on it.  Meanwhile, nationally, they are forcing a TERRIBLE healthcare bill down our throats and smiling while they do it.  How can anyone in their right mind look at the Democrats right now and not think they are only looking out for themselves?

This is yet another debacle where we have to wait all weekend to see what happens.  In the meantime, probabaly even more shenanigans will ensue making the budget fix even more difficult to fix.  Seriously, is there anyone in the legislature who really cares to fix Arizona?

Arizona tied with Rhode Island

We are tied with Rhode Island for the second worse budget situation, trailing only California, who has resorted to what appears to be the world’s biggest yard sale and using the taxes from their citizens like a cash advance.

Once again, the focus is placed on the blame, and not on the solution.  Waaaa, it’s Napolitano’s fault, waaaaa it’s Bush’s fault, waaaa it’s Obama’s fault, waaaa it’s Brewer’s fault, waaaa it’s the GOP’s fault.

Who cares!  Let’s just get this thing fixed.  The story says that Arizona’s budget deficit is $2 Billion this year and as high as $3.3 Billion for next year.  For those who want to cut their way out of this problem, I am all ears on how this would be done.  Explain to me what you are going to cut to save $5.3 Billion over the next 18 or so months.

I am hearing a lot about the “Nevada” model or the “Texas” model and a bunch of other ideas, but until Arizona magically has gambling or oil, those don’t seem to be all that realistic of solutions.  Plus, in all of these scenarios, the idea is that we are going to grow Arizona out of this recession and out of this budget hole. 

So, when it comes down to it, for all of this “living within our means” tough talk, these guys aren’t really all that ready to make the deep cuts.  Apparently businesses just grow on trees, and if we do all of their magical suggestions, it’ll start raining money to fix our problems.  One commenter put it rather succinctly:

Ok, according to this presentation http://www.ospb.state.az.us… from Jan Brewer in April, here is where we spend our money:

K-12 Education 42%
AHCCS 16%
Corrections 10%
Universities & Regents 10%
Economic Security 8%
All Other 7%
Health Services 6%
Community Colleges 1%
School Facilities Board 1%

The total amount required is ~$10B and we instead have $6.3B. So we have to take this 100% amount and reduce it to 63%

We’ve got to cut about 37 percentage points out of this…

So, let’s hear the solutions!

This is why this is not easy…

Gee, it sure looks like a big piece of that turkey is held up in K-12 education.  Good luck carving that bird!

No good deed goes unpunished, but bad deeds do.

We live in a world with rules, and I understand that, but somehow it seems that the rules don’t apply equally for everyone.  Take two stories from today’s paper:

First, local churches in Phoenix with underlying residential zoning are banned from feeding the homeless.  Despite their desire to do the right thing and help those in need, especially in these tough times, they have to be respectful of the rules and follow city requirements.  It’s an unfortunate situation, and something that really should be addressed.  However, rules are rules and they should be lived by.

Now, juxtapose that with the story the fact that child-care liscencing fees are about to shoot through the roof and everyone is pointing the finger elsewhere.  Legislators are aghast at the increase in fees, but what did they think was going to happen with these massive budget cuts?  Rules are rules, these centers need to be regulated and the safety of the children preserved.  Did they think things were going to stay the same? 

Even worse, “First Things First” who hasn’t had to make a single cut refuses to help out.  See, the rules are on their side, because they are protected from the budget cuts.  Their little board gets to make their own decisions, and despite being sold as a way to help early childhood development, they are refusing to help ease the cost increases to the childcare centers.  Now, if these centers are forced to close, how does that help the kids?

So, a church is doing the right thing, and is being prevented from doing so, but no one is to blame for this giant negative impact on childcare.  How is this right?

Dems prove to be out of touch

Sure, some in the Arizona legislature are out of touch – they still have yet to fix the budget problem, and very few seem to be willing to admit the catastrophic effects of even more cuts to the state.

However, when it comes down to it, our congressional Democrats really take the cake.   All five Arizona Democrats voted for the controversial healthcare reform bill, which passed on a 220-215 vote.  So, in essense, it was the Arizona delagation who put the bill over the top.  However, the problem is, this healthcare bill is going to be wildly unpopular in Arizona.

By making all of Arizona’s Democratic congressional members close ranks and vote for the bill, the Pelosi gang has just placed a huge target on their Arizona friends, especially Harry Mitchell.  Giffords and Kirkpatrick better start making their fundraising phone calls right now.

When the burden of this bill is realized by the taxpayers of Arizona, especially in the context of this current budget crisis, they are going to freak out.  You think the tea-parties were bad?  Just wait until people who don’t own an article of clothing made to look like an American flag start showing up and complaining as well.

Seriously guys?  This is the best time to wreck healthcare even further?  What about the deficit?  What about the wars in Iraq or Afghantistan?  What about the forclosures?  Is it me or does a Democratic controlled Congress and White House feel like a drunk kid with their dad’s credit card?

Even Burns sees the problem

Looks like even Senate President Robert Burns has seen that the problem may be to big to handle with cuts alone.  From the Arizona Republic:

 

Conservative calls for sales-tax hike
by: Bob Burns

Your state government is in trouble. The money we collect in taxes and fees from you, your neighbors and your employers has declined sharply during this economic crisis. The money the state spends to educate our children, provide health-care and welfare benefits and public-safety services, is far outpacing the money we’re taking in.

The latest estimate of our current budget deficit is roughly $2 billion. There are really four major components to that number.

The first is that plummeting revenue that caused last year’s budget to fall short by $500 million. That’s money we already spent. Whether we like it or not, we will have to find the revenue for it in fiscal 2010.

Another factor affecting the deficit is the aftermath of the governor vetoing significant parts of the budget package the Legislature sent her last summer – the Department of Economic Security (welfare) and K-12 education budgets and the bill containing budget provisions relating to taxation and revenue. That added another $500 million to the deficit.

The remaining $1 billion stems from a number of projections that are considered highly likely: that our tax revenue will continue to fall ($700 million) and that demand for health care for the poor will grow and other provisions of the fiscal 2010 budget will not generate the savings we had hoped for ($300 million).

Meanwhile, the overall public message to the Legislature has continued to be “Don’t raise taxes and don’t cut spending.” The previous governor, despite clear signs of economic stress and dropping revenue, insisted on significant increases in spending. While I think we should have been much more aggressive in our effort to control or decrease spending, the fact of the matter is that we are essentially budgeting the same spending level as when the recession began.

To maintain a General Fund budget of about $10 billion over the past few years of this recession, your state government – Republicans and Democrats alike – have depleted our savings, delayed payments, swept funds from other accounts, used one-time federal stimulus dollars, and gone deeper into debt. Our projected ongoing revenues are only $6.4 billion, meaning the budget has a structural deficit of $3.6 billion that will plague us in the future until we enact permanent solutions.

Now, we’ve hit the wall on short-term budget maneuvers and gimmicks. Those options are no longer available. We will have to cut spending or increase taxes or both. There is very little else of substance we can do at this point.

Many of you know that I have a reputation as a fiscal conservative from my many years as chair of the appropriations committees in both the House and Senate. When it comes to making decisions on how to spend taxpayer dollars, I have always seen my role as that of a gatekeeper, not a gift-giver.

Over the years, I have come to the opinion that many people tend to exaggerate the restrictions on the Legislature’s legal authority to reduce spending. Nevertheless, there are real limits that come in various forms: federal, constitutional, judicial and electoral.

We need to act decisively, and time is not on our side. It won’t be long before state employees won’t be able to cash their paychecks. This insolvency of state government will affect more of you than you might think.

I surprised many people when I announced earlier this year my support for putting a 1-cent-per-dollar sales-tax increase on the ballot. Do not misunderstand me. The revenue generated from such a tax increase (less than $900 million in current economic conditions) will not entirely solve the problem. I also recognize the distinct possibility that voters may reject any such proposal. In either case, I will continue to advocate for more reductions in state spending to balance the budget.

I will support putting the referral to a vote in the Legislature whenever and as many times as we need to in order to get the question to the voters. But I will not be supportive of higher state spending as a price to get those votes.

We have lost enough precious time already. The question needs to be asked: Are you willing to pay, in addition to your current tax burdens, another penny on the dollar in sales tax in order to provide more revenue for your government? There may not be an official declaration that Arizona is in a state of emergency, but in my view, we’re in one.

Bob Burns is president of the Arizona State Senate.