Wednesday, October 16, 2002

The State Budget Crisis

This week's column was 612 words, or maybe it was really 38 million words if it would have been part of the Matt Salmon budget plan. I got a more aggressive headline than I thought the column would have, but if the Tribune is the house organ of the Salmon for Governor campaign, maybe they thought they should give me one. However, Bob Schuster deleted the joke that based on the budget plan, Matt Salmon's math is about as good as his definition of "lobbying." He also cut the last line, which I've put back in. You can read my version below and the Tribune's version here.

I'm late posting this week because I was in St. Louis on Monday and Tuesday, for one of the periodic showings of the grandchildren to the actual people in charge. Also, Beth is starting two weeks at Saint Louis University Law School as a "practitioner in residence."

I always have a wonderful time in St. Louis because my younger son and my father-in-law basically like to do the same stuff. We paid our respects to Crown Candy, Ted Drewes, and toasted ravioli (scroll down to the 5th entry), and swam laps, took a steam, and had breakfast with the same old guys (a/k/a the old same guys) at the Missouri Athletic Club. Each may be overrated, but each is still fine by me (and the kids generally, but especially Louis).

East Valley Tribune, October 13, 2002

Those of you swallowing that “just cut spending” nonsense regarding the state budget deficit should think twice about cutting education. Given how badly the numbers prove your belief is nonsense, the last thing to cut is teaching math.

Consider Arizona’s looming $1 billion deficit. Let’s assume current spending levels for education, healthcare, and prisons. Sounds reasonable, right? No candidate is bragging how they’ll cut those core government functions.

Remember that maintaining current services means more dollars than last year. There’s inflation and new medical treatments, and more children in schools and more criminals in prisons, so providing the same services costs more.

Also remember that “current spending levels” is still pretty dreadful. Scottsdale Schools Superintendent Barbara Erwin correctly called current inadequate funding for public education a form of child abuse. Hospital emergency departments in Pima County are day-to-day, with their funding on intensive care. And even if crime rates stay stable, nobody calls for fewer crimes or shorter sentences.

Keeping those core services at current levels, but eliminating every other agency, program, and service of state government -- everything! -- would save, according to Tom Betlach, Gov. Hull’s budget director, about $480 million, less than half of the 2003-04 deficit.

Think about it. No courts, no tourism promotion, no child welfare, no emergency food aid, no regulation of insurance, banks, utilities, and real estate. No state police or parks. No legislature. A libertarian heaven on earth, like Lord of the Flies but with real people.

People don’t realize how much of government is in those “core functions” because in Arizona we simply don’t fund optional stuff much. Oh, you can find pointless programs; in any enterprise of the size of state government, of course there’s waste, fraud, and abuse. But there’s no way to find enough five-, six-, or even seven-figure programs to pay for a ten-figure deficit.

Just do the math -- just don’t do the math as sloppily as Matt Salmon’s “budget plan.” Salmon proposes consolidating the Banking, Real Estate, and Insurance Departments and thereby save $50 million. Unfortunately, these three agencies get about $12 million total from the General Fund. Forget about “consolidating” -- you could eliminate them entirely and still need to find another $38 million in savings from unspecified other agencies.

Even with this kind of bogus math, Salmon’s “plan” -- by its own admission -- is still $400 million short.

There’s one final myth about the state budget. Government should cut spending "because that’s what families do during tough times."

Leave aside that unlike businesses and families, the demands on government increase during a recession. The entire analogy is bogus, because during this recession individuals may be cutting spending some, but they’re borrowing money more.

Consumer debt is at record levels. In fact, our economic outlook is so cloudy in part because consumers have kept spending at boom-like levels by increasing debt. When this recession finally ends, unlike past cycles construction and auto sales won’t lead the recovery, because consumers have taken advantage of low mortgage and new car loan rates already.

Want to run state government like a family budget? Then take out a new mortgage and borrow our way to a better tomorrow, just like real families are doing.

Would a “real family” cut education, healthcare, and prisons? No way -- with or without credit cards and zero percent financing. Don’t swallow this absurd hokum; take a math class instead.

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