Friday, May 14, 2010

Vote "No" on Proposition 100

If one is concerned about Arizona's solvency or quality of government in the long run, a "Yes" vote in next Tuesday's special election on Proposition 100, which would raise the transatction privilege tax (sales tax) by one cent per dollar, is irresponsible.

The Joint Legislative Budget Committee's projections are telling: If Proposition 100 passes, we can expect a $982 MM deficit in 2014 when the "temporary" tax expires, compared to a $200 MM deficit if it fails, if the "Healthy Arizona" 2000 Prop. 204 program is left funded. The other scenario is not worth considering at this point, since one of the many negative consequences of the "Obamacare" bill--as though banning insurance in the true sense of the word wasn't bad enough--is to put AZ's Federal Medicaid funding at risk if 2000 Prop. 204 is defunded.

The difference between $982 MM and $200 MM alone is more than five times the size of the current deficit. Unless the tax increase either becomes permanent or doesn't pass at all, in the not too distant future we'll be facing a shortfall that makes this year's seem like nothing.

Jan Brewer and many of Prop. 100's supporters are claiming that, nevertheless, Proposition 100's passage this year is necessary. From a certain perspective, that is correct. Arizona's constitution requires that the state budget be balanced. If the legislature is unable or unwilling to make the cuts necessary to balance the budget, then revenue must be increased. So far, the cuts made have been opportunistic and haphazard. As was the case when I argued for ending "home rule" in Arizona's cities, it cannot be emphasized enough: The scope of state government has not yet been decreased.

We could, based on that insight alone, develop a naive algorithm for balancing the budget. Let's go back year by year, scaling each year's budget to account for Arizona's increased population, until we find a year for which the scaled budget is balanced, and adopt that year's budget. The Tucson Weekly and other reactionary-leftist sources of commentary would have you believe that every cut from the State budget will take us into Third World conditions, but don't take their lead and start kidding yourself. Arizona's budget shortfall is the result of spending increases during the construction boom (perhaps due to the perverse dynamic between Gov. Napolitano and the far-right Legislature!) and pre-boom Arizona was not a bad place to live.

But we don't have to look to the past for guidance. Using Dean Martin's Arizona Checkbook service and other publicly available information, you could put together your own $150 MM in cuts rather easily. Or, you could put to use information from think tanks. Experience with dubious figures and specious arguments from the Goldwater Institute and Americans for Prosperity has taught me to be even more cautious with non-academic whitepapers than I am with academic sources, but this one, on review, seems solid. The Reason Foundation, together with Americans for Prosperity, has put together a guide to cuts that would balance Arizona's budget. If there could be such a thing, it should be required reading for all voters in next Tuesday's election.

These aren't shell-game gimmicks, nor de-funding of initiative-mandated programs, nor drastic cuts to essentials that would put AZ in the "third world". Included are a few bad ideas, such as letting the proposed Rosemont copper mine tear up the Davidson Canyon/Northern Santa Ritas near Tucson. (I don't oppose mining, but mining the Black Hills in Greenlee County or the back side of the Silver Bells is rather different than mining a tourist Mecca a stone's throw from a city of a million people! And the Silver Bells are in Ironwood NM, which is the closest thing I have to a preferred "stomping grounds", so this isn't NIMBYism.) But what is proposed is mostly good.

The number that should leap of the page at you is what could be saved by releasing non-violent drug offenders from state prisons and not sending any more to prison. $60 MM this year, and $120 MM in 2011. That eliminates most of the shortfall in one act.

Consider the one-time gains: Sale of the Santa Rita Experimental Range, of which the State's ownership was supposed to be temporary, could get us through this year and moving the Papago Park military reservation--just why are the National Guard centrally located in Metro. Phoenix?--will take care of next year's troubles, too.

Now move on to department eliminations. Even if the Agriculture Department's budget is halved--the wholesale elimination proposed is probably not responsible, but the department's scope could be reduced to providing true public goods--that's $4.5 MM per year. $10 MM can be saved by eliminating the Department of Tourism. Our outdoors sells itself! (Word to out-of-towners: come hike Aravaipa Canyon. Trust me on this one, or send an e-mail.) $100 MM per year can be saved by moving portions of University coursework to community colleges, which many students do anyway. (Let students who value the difference pay more, like their counterparts at private universities.) We don't need a Liquor Department, nor a Parent's Commission, nor a $40 MM special "Career Ladder" program for the schools (aren't they supposed to do that anyway?), and certainly don't need an Arts Commission, state departments of racing, private postsecondary education, cosmetology, barbering, opticians, optometry, podiatry, chiropractic (!), acupuncture (!!), naturopathy (!!!), and homeopathy (?!: a state department for regulation of placebos and outright quackery!). The beauty of the proposed cuts is that you do not have to agree or support all of them. As they amount to over a billion dollars per year, they're more than enough to get us there.

And one of the ideas proposed is just plain overdue: a parental "use tax credit" for private education. It's one of the strangest things about our current state of affairs, that middle-income people get their children's educations subsidized by the state. Thinking that makes us better off is like thinking we can be made more wealthy by picking our own pockets. A use tax credit will eliminate the double payments problem and let the benefits of choice be open to more people. In the long run it will lessen dependence on the State for education and make the next shortfall less of a "panic".

The takeaway message: Even if you do not support half or even three quarters of what is in the Reason Foundation's report, it is possible to balance Arizona's budget without raising taxes. Therefore, the tax increase is not necessary.

What the legislature needs is a voter mandate for cuts. Those who are on the fence about supporting cuts need to know that the public will not vote them out of office for doing what needs to be done. The Steve Farley types, who've never seen a cut they like or a spending increase they don't, need to be forced by the voter to start thinking like grown people and considering that we live in a world of finite resources and that the government simply can't do everything that Would Be Nice without raising taxes and thus diminishing the ability of people to enjoy the fruits of their labor and investments. The construction-fueled days of free money in Arizona for government programs are over. Time to prioritize. Vote "no" on Proposition 100 to make the legislature do just that.

And start demanding responsible cuts to the scope of government, as well. Read the Reason Foundation report and call your representative or write your newspaper to say that this milquetoasty, timid cutting of a little from this, a little from that has to stop, to be replaced by a reduction of the scope of state government. At the very least, demand that non-violent drug offenders be released from prison.

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