Regardless of what happens to the Proposition 100 sales tax hike on May 18, Gov. Jan Brewer and the Arizona Legislature have a lot of work ahead of them.
By the time they get done making the trade-offs to comply with federal maintenance-of-effort requirements, the state’s ongoing structural budget deficit will once again be more than $3 billion, and the gap will remain that large for several years, according to most economic forecasts. The result of allowing that gap to remain would be gigantic and wasteful interest payments — assuming that the debt is not ruled to be unconstitutional.
Closing the ongoing structural deficit will require three key changes:
First, abandon false hopes.
The governor and many legislators seem to be holding onto the vain hope that the state can raise taxes in amounts sufficient to make the deficit problem manageable. Even if Prop. 100 passes, the temporary tax by definition would not reduce the ongoing structural deficit. Whatever happens on May 18, the governor and lawmakers need to look reality in the eye and stop delaying real budget reforms.
Too many legislators are also hoping, despite clear signs to the contrary, that Arizona’s general fund revenue will come pouring back into the state treasury from a V-shaped economic recovery. It would be wonderful for the private economy to rebound like that, but it would be the height of irresponsibility to make plans based upon a fantasy.
Second, make thorough reforms, not line-item budget cuts.
Everyone who understands the logic (illogic?) of collective action understands that it’s much easier to get 31 representatives, 16 senators, and one governor to make simple line-item budget reductions than it is to get them to make thorough reforms of government programs. But the structural problems in many of our programs are far too big and complex to attempt to remedy with line-item reductions.
K-12 education is the best place to start. We do not have a resource problem in K-12. We have an allocation problem. The state superintendent’s 2009 report shows that district schools had total resources of $9,424 per student, and that unified districts had non-capital resources of $7,834 per student. But at best, only half of that money gets into our classrooms (a scandalous failure of Proposition 301). The anecdotes are appalling: Some school districts have flat-screen computer panels in classrooms, but are threatening to lay off good teachers.
Whether Prop. 100 passes or fails, the Legislature and the governor must work quickly to remove K-12 spending mandates, so that by August school districts will be able to put a greater proportion of the available money into their classrooms. They need maximum flexibility to reduce excess administration, cancel frivolous capital projects and suspend wasteful non-core classes.
We also need to reduce the disparities between districts. Under the current funding formula, if Prop. 100 fails, some school districts will see their budgets reduced to the level of per-pupil funding charter schools had in 2009 ($6,946). That’s not a bad thing, if those districts are given management flexibility on a par with charter schools — but it would be much better to give those districts extra money taken from less efficient districts. In any case, the more money we can remove from bloated districts such as Phoenix Union, the more we can reduce the state’s structural deficit.
In K-12, good policy can also be good politics. If districts are allowed to fire good teachers, while wasting money and keeping clock-punchers on the payroll, legislators in November will have a tough time answering to voters. Ending seniority (at least on paper) was an important first step, but we need to do much more.
Third, refer a strong spending limit to voters.
The Legislature has thus far failed to refer a strong spending limit to voters. That means there is nothing to keep state government from resuming its disastrous pattern of rollercoaster budgeting when the economy begins to recover. No wonder so many voters believe (correctly) that Prop. 100 will do nothing to fix the state’s long-term spending and deficit problems.
— Tom Jenney is Arizona director of Americans for Prosperity