Goldwater Institute: Arizona Feeling the Heat

Posted: Oct 16, 2007 3:17 PM
Goldwater Institute: Arizona Feeling the Heat

Cactuses aren’t the only things being cultivated by the arid Arizona temperatures. State deficits are growing at an alarming rate as mismanagement of the state’s income and imminent plans for expansion of government programs are creating a hot and humid environment for Arizona legislators. “The heat is on”, but fortunately for residents, the Goldwater Institute is determined to hold state officials’ feet to the fire by highlighting the gross mismanagement of state finances and proposing alternative budget policies that would address the mounting fiscal concerns.

Founded in 1988 with the blessing of Barry Goldwater, the Goldwater Institute embodies the entrepreneurial spirit of its namesake with their shared conviction in the “innate dignity of individual human beings” and a belief that American prosperity is irrevocably dependent upon the ingenuity and ambition of its citizenry. If government creates a hostile environment for those seeking to push the envelopes of personal growth, government then becomes a barrier, rather than a conductor, of future economic success.

As a government watch-dog organization, the Goldwater Institute has produced some staggering reports regarding the condition of Arizona’s finances. In recent months, Goldwater has targeted the state’s outrageous spending and Governor Janet Napolitano’s proposed expansion of Arizona’s Medicaid program as two dangerous policy trends that must be stemmed if residents hope to avoid the inevitable pitfalls that come with sustaining a government that’s living beyond its means.

In their recent article, “Here Comes the Rain Again”, Goldwater details the alarming fiscal concerns that have left Arizona taxpayers with tremendous financial hurdles to overcome.

State government in Arizona has gorged itself for the past five years, growing at a truly unsustainable 12 percent rate. State revenue is already $300 million under budget for the fiscal year that began July 1, with the total deficit projected to hit at least $600 million.

Matters are even more grim for next year. This year's budget assumed a surplus of $400 million from last year (which didn't entirely materialize). So next year's budget will begin with a $1 billion gap between current spending and revenue levels.

Even aside from the dreadful policy implications, there are problems with the governor's proposal. For one, her proposal to use debt to balance the budget is unconstitutional. The Constitution categorically prohibits the state from contracting for more than $350,000 of debt.

As any responsible spender could deduct after crunching these numbers, state spending is escalating faster than a teenage girl can say “charge it”- and incurring debt to pay for debt is an inherently flawed principle that any good father would teach his daughter when she gets her first credit card. “You’ve got to make more than your minimum payment, and if that means trading in your Jimmy Choo heels for Target brands, then so be it.”

Perhaps that’s what Arizona legislators’ need- a good father to step in, take away the credit card to protect against further damage, and come up with a plan to salvage the state’s economic stability.

Unfortunately, Governor Janet Napolitano has neglected to fill this role and instead, has applied these misguided spending decisions to her new proposal for more funding on the state’s Medicaid program- a policy that would perpetuate the negative effects of the spending crisis on Arizona taxpayers and create more dependence on state government, which thwarts incentives for personal growth and sustainability.

In January, Napolitano made a proposal to state officials that would expand Medicaid to include children in families earning up to $60,000 per year. While expanding coverage for children is a laudable goal, national statistics show that 50-75% of the increased Medicaid enrollment will come from individuals dropping private coverage and enrolling in the public program - a burden that would cripple taxpayers.

However, if Governor Napolitano refuses adopt the “tough love” policy with Arizona lawmakers, the Goldwater Institute has stepped up to the plate with some alternative solutions to curb costs and help alleviate future financial drains on state residents. Among Goldwater’s suggestions is the allowance for open health care markets- an initiative that fellow Arizonan and presidential hopeful, Senator John McCain, has advocated and one that could be supported by foundations within the current state policy.

Currently, residents can only purchase in-state policies that are made more expensive by lack of out-of-state competition and a bevy of regulations. If policymakers would permit Arizonans to purchase health insurance from any state, residents could save hundreds of dollars. Just next door in California, the average individual premium per year is $550 lower than in Arizona. Many other states have lower-cost options. An open health insurance market would also provide more continuity of coverage and portability for America’s mobile labor force.

Although the free-market health care system is one proposal among many that would provide alternative means to affordable health care, Goldwater asserts that fiscal realities faced by Arizona budget restrictions and current spending trends must be considered when making new proposals for the expansion of government programs.

The Arizona spending watch shows the state government spends its fiscal year 2008 budget of $27 billion at a rate of $855 per second. If Governor Napolitano and state officials continue to let state spending spiral out of control, the Goldwater Institute recognizes that residents will be baking in more than just the Arizona sun. Their wallets, and subsequently, their economic livelihoods, will get burnt as well.

To read more on the Goldwater Institute’s initiatives, please visit their website at