A proposed ballot measure would effectively bar state and local governments from increasing spending across the board until its employee pension systems are adequately funded.
The Responsible Budgets Act, which was filed with the Arizona Secretary of State’s Office on Friday, would bar political entities with underfunded pension systems from increasing spending, except for inflation and population growth. A provision in the initiative defines “adequately funded” as 80 percent funded.
The initiative would also eliminate pensions for all future elected officials. It would not affect pensions for elected officials who are already part of the Elected Officials’ Retirement Plan.
Roy Miller, the chairman of the group that filed the proposed initiative, said the Responsible Budget Act will force local governments to address problems with underfunded pension systems.
“The idea is to get governments to own up to these obligations or reduce them. That’s the purpose of it,” said Miller, a businessman and co-founder of the conservative Goldwater Institute.
But Miller acknowledged that it would effectively make all other areas of government spending subservient to public pension systems. If the state wanted to increase funding for K-12 schools or a city wanted to hire more police officers, it would be unable to do so unless its pension systems were at least 80 percent funded.
“You either have to fund them by raising taxes or cutting something else, or you have to reduce benefits,” Miller said.
Nonetheless, Miller said he doesn’t expect the initiative to face much opposition.
“I think this is such a straightforward measure that I think it’s hard for anybody to oppose it,” he said.
The initiative includes an exemption for emergencies. In cases of natural disasters or other emergencies, the governor can grant a one-year waiver from the spending limits for government entities with underfunded pensions.
Miller would not say who is funding the initiative drive. But he said the group has funding commitments, including from some of the same people who are funding the Protect Employee Paychecks from Politics Act. The proposed measure, which is also chaired by Miller, would limit automatic deductions from employee paychecks for political purposes.
Miller said the group will hold a press conference to formally launch its efforts in about two weeks.