November 20, 2005
OUR STAND: STATE'S $750 MIL SHOULD GO TO BILLS, INVESTMENTS
Arizonans can identify
with the quip from singer Sophie Tucker: "I've been rich and I've been poor.
Believe me, honey, rich is better."
Just two years ago, the state budget was deep in the red. Now revenues are
pouring in, with a projected surplus of $750 million for fiscal 2006.
Not surprisingly, everyone has ideas about what to do with Arizona's sudden
Not to be party poopers, but the guiding principle should be prudence.
Much of the money is a short-term windfall from capital-gains taxes on real
estate investments, sales taxes from booming construction and sales tax from an
As an Arizona Republic editorial stated earlier this year, we should be
extremely cautious about making any new long-term spending commitments.
Likewise, it would be foolhardy to use a temporary burst of revenue as a reason
for big cuts in the tax base. Otherwise, the slightest downturn could trigger a
budget crisis, while the state's booming population continued to require
substantial investment in everything from schools to highways.
Indeed, Arizona still needs to do some financial catch-up, and this bonanza will
help. Some of the top items on the to-do list should be:
* Boost the "rainy day" fund, which currently has $164.7 million.
* Clear up accounting gimmicks, like "rolling over" education funding into the
next fiscal year.
* Make the final $99 million payment in the Ladewig case, refunding tax money
that was incorrectly collected.
* Restore some of the money that was swept out of dedicated funds -- financing
everything from highway construction to worker retraining to pollution cleanup
-- into general state coffers.
* Give state workers a real pay raise. Last year's 1.7 percent increase simply
made up for higher employee contributions to the state retirement plan. Low pay
contributes to high turnover, which is inefficient and expensive, costing
Arizona an estimated $50 million a year.
* Meet a court order to adequately fund language instruction for students who
need to learn English. This is a political sore point: Gov. Janet Napolitano
vetoed that line of the fiscal 2006 budget as inadequate, fueling the wrath of
legislative leaders who say she reneged on their budget deal. But it can't be
* Continue to expand all-day kindergarten.
* Finish funding the new state archives building, lawmakers budgeted half of the
$30 million last year, and take care of some of the deferred maintenance work on
Arizona should use these flush times to get its financial house in order,
prepare for lean years and make investments with long-term payoffs.
Editorials represent the opinion of the newspaper, whose Editorial Board
consists of: Robert J. Dickey, John Zidich, Patricia Biggs, Phil Boas, Ward
Bushee, Richard de Uriarte, Jennifer Dokes, Joanna Hensley, Cindy
Hernandez, Kathleen Ingley, Doug MacEachern, Gary Nelson, Joel Nilsson, Dan
Nowicki, Robert Robb, Paul Schatt, Linda Valdez, Ken Western and Steve
Benson. Edition: Final Chaser