The budget crisis is the most important issue facing the state. In fact, Arizona's budget mess is the worst in the country even worse than California, if you consider the relative size of the problem in light of the available options. The recession has literally wiped out 30-40% of state revenue over the last year. To say that we are facing fiscal peril is a gross understatement. In all my years at the Legislature, I have never seen Members so stunned and, yes, even scared at the sheer magnitude of the problem.
So what's the solution? There are only three viable options: increasing taxes, borrowing money, or reducing spending. The fourth "solution"--pretending there is no problem, as some prefer to do--is just not at all useful or helpful. Recession necessitates conservation. Increasing taxes would likely prolong this recession or, even worse, push it into a depression. Likewise, borrowing money would only delay the problem, hurt the overall financial health of our state, essentially mortgage our children's future, and leave us worse off in the end. "You cannot spend your way out of recession or borrow your way out of debt" (Daniel Hannan). Tough decisions need to be made now. We have no more time for gimmicks or games. Most of the "smoke and mirrors" accounting maneuvers that have been utilized to maintain high spending levels are exhausted. We are out of options. It's time for state government to live within its financial means, just as every Arizonan is forced to do.
A significant portion of the "cuts" necessary to balance the budget would actually be rollbacks of spending increases that were made over recent years when state coffers were flush with money thanks to a strong housing market and a relatively prosperous economy. Put into perspective, the loss of revenue has placed our state's income back to where it was in 2004. As such, my suggestion would be to dust off the 2004 budget books and use them as a starting point for today. Were we ok in 2004? Yes. Does it mean more people going with less since there are more people in Arizona now than there were in 2004? Yes. Does making these difficult decisions now mean we can begin to put this challenge behind us and start looking toward the future again? Emphatically, yes!
As simple as this solution is, however, it is not easy. When roughly 55% of the state budget is dedicated towards Education, 25% towards Health and Welfare and 10% towards Public Safety--that leaves only 10% left to work with outside of the areas most people consider to be critical--at a time when we are as much as 40% short! "The Gipper," who faced similar economic hurtles during his presidency, said it right: "There are no easy answers, but there are simple answers. We must have the courage to do what we know is morally right." There are hard choices in front of us. Within the context of those choices, we must be specific on the areas of government that are to be given priority. For instance, it is not enough to say, generally, that "education" must be spared. We must declare that teachers, particularly, who are the heart and soul of the education system, will be prioritized. This type of specificity becomes all the more critical when resources are limited. Priority-based, within-our-means budgeting will involve difficult decisions. As difficult as these decisions may be, and as painful as they may feel in the short-term, it is the responsible approach, and is necessary to preserve the long-term vitality of our government.