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Tax and budget recommendations for Arizona’s leaders

Most Arizonans know that the state faces dire fiscal problems. Yet, it is likely that few Arizonans have heard our state’s gubernatorial or legislative candidates talk about tax and budget policy solutions.

The Arizona Public Interest Research Group (Arizona PIRG) offers candidates the following recommendations to increase government transparency and improve the financial stability of the state:

Open government — Prioritize launching a high-quality state spending transparency website.

The ability to see how government uses the public purse is fundamental to democracy. States across the country have started putting spending websites in place that have resulted in saving taxpayers money and making government more efficient and effective. Arizonans deserve a spending transparency website that is comprehensive, one-stop, and one-click searchable.

Given Arizona’s budget problems, it is important that the state moves swiftly to implement this website as quickly as possible and that the website includes features to make it as useful to taxpayers as possible.

No gimmicks — Don’t balance the state budget with short-term maneuvers that worsen finances over the long term.

Arizona has used a number of budget gimmicks in recent years, such as the sale-leaseback of state buildings, budget rollovers, and the securitization of the State Lottery. However, these gimmicks are either just accounting tricks or a way to bring short-term cash to the state at a much higher cost to taxpayers in the long-term.

Given that Arizona faces another large budget deficit, it is possible that we’ll continue to see more budget gimmicks. These gimmicks aren’t solutions to the state’s budget woes — they simply sweep the real problem under a rug and are a bad deal for taxpayers.

Don’t ignore tax credits — Scrutinize this form of spending, eliminate those that don’t deliver a good return on investment.

Just like appropriations on government programs, tax credits are an expenditure of resources, except they go through the tax code instead of through direct spending. However, compared to direct spending, tax credits are subject to much less scrutiny and accountability. Any current or future tax credits should be examined thoroughly to make sure that they provide a good return on investment for Arizona.

Furthermore, there should be a review process for tax credits every few years so their effectiveness can be reviewed and the Legislature can decide whether to continue them.

Ensure that there are public-interest safeguards on privatization.

Arizona has considered privatizing a number of state assets in the past few years — state prisons, roads, and rest stops to name a few.

When adopting privatization deals, the state should be sure to: retain public control over planning and management, ensure that the public receives fair long-term value for assets, prohibit deals that last longer than 30 years because it would be impossible to assess Arizona’s infrastructure needs or the market value of public assets beyond a few decades, require high standards for safety and maintenance, and maintain complete transparency and accountability so the public knows the complete terms of specific proposed deals. Finally, the revenues gained from privatizing state assets should be used to address other long-term needs.

The next leaders of Arizona must restore fiscal stability by addressing our state’s budget shortfalls. To re-establish faith in state government, it will be critical to increase transparency and reject budget gimmicks that worsen our long-term imbalances.

— Serena Unrein is the public interest advocate for the Arizona Public Interest Research Group (Arizona PIRG), a statewide public interest advocacy organization.

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