October 16, 2008 - 11:07am

Opinion

Arizona’s budget crisis creates opportunity for reform

By Len Munsil

Our national economy took a huge hit on Sept. 11, 2001. When Janet Napolitano took office early in 2003, the state of Arizona, like most other states, was dealing with a post-9/11 economic downturn that created a budget deficit.

Gov. Napolitano appointed a commission that proposed tax and fee increases to cover the shortfall. The Republican legislature rejected those solutions, and the state of Arizona was bailed out by federal tax cuts pushed through by President Bush and a Republican Congress.

The resulting economic growth flooded the state of Arizona with new revenue, eliminating the state deficit and providing money to throw at everything and still leave some for a rainy-day fund.

As I pointed out, in a message that few wanted to hear in 2006, Arizona had gone backwards in the previous four years – highest crime rate in the nation, no CPS reform, no progress on education, transportation or dealing with illegal immigration – and that our economy had only improved because we ignored all of Gov. Napolitano’s economic proposals.

I also suggested that the Governor’s voracious spending appetite would put Arizona into a deep financial hole at the first hint of an economic downturn.

Now we are there, and former legislator Greg Patterson has a great summary of what has happened on his Espresso Pundit website:

“Arizona's economy began slowing more than a year ago and after a history of multi-year, double-digit spending increases the Governor refused to even consider spending cuts and instead drained the rainy day fund, swept other funds, raised property taxes, delayed school payments, stole $30 million from the cities, bonded against future lottery revenue and tried to raise $90 million in photo radar tickets. She's proposed selling both the state lottery and Arizona's share of the national tobacco settlement.

She offered these one-time gimmicks in hopes that revenue would come roaring back. That gamble failed and now the state faces a multi-billion dollar deficit but all the gimmicks are gone.”

The title of Greg’s post is “The Governor Abdicates,” and he’s essentially arguing that the Governor has checked out while she camps on Sen. Obama’s door with her resume’ updated. And now she’s opened up a website asking for suggestions from all of us on how to save money for the state.

Whether the Governor has checked out or not, it’s pretty clear by now that she had nothing to do with solving the 2003 deficit and has little idea of how to solve our current crisis.

But that’s all in the past. Now we need to look forward and figure out what to do.

For those of us who actually want to stay in Arizona and deal with the problem, we need to recognize that with every crisis comes an opportunity.

The opportunity created by this crisis is the chance to do something that has not been done in decades, if ever – perform a top-to-bottom review of state spending.
Most state budget decisions are made with very little oversight – the only debate that occurs surrounds the issue of what percentage increase should occur.

The legislature should take this opportunity to review every state agency and every state expenditure for three things:
Is this expenditure an appropriate governmental purpose authorized by our laws and Constitution?

Is this expenditurenecessary, especially in difficult economic times?

Is this expenditure actually producing the intended result, or is there a more efficient and economical way to accomplish this legitimate state purpose?

Republican legislative leaders could start the process by appointing a commission to evaluate every element of state spending, similar to President Reagan’s “Grace Commission” during the 1980s that exposed waste, fraud and abuse in federal spending.

We all do this type of analysis in our personal budgets during difficult economic times. The State of Arizona should be willing to do the same.

Len Munsil is an attorney and public policy expert with 22 years of involvement in promoting conservative policy and governmental reform. He was the Republican nominee for Governor of Arizona in 2006. He is currently a small business owner, chairman of a political action committee (www.pro-pac.org), an adjunct professor of political science at Southwestern College, and blogs at www.lenmunsil.com.

Len Munsil can be reached via email at info@lenmunsil.com.

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