Muro: Arizona among worst's worst for structural deficit
Feb. 4, 2011
Mark Muro, Senior Fellow and Policy Director for Brookings Metropolitan Policy Program, blogged on Huffington Post about the deficits Mountain West states such as Arizona are facing today, in large part because of structural deficits.
Muro makes mention of Morrison Institute for Public Policy and its partnership with Brookings Mountain West in preparing and presenting the report: Structurally Unsound: Cyclical and Structural Deficits in California and the Mountain West.
Arizona's version can be found here.
In his blog, Muro writes:
Arizona's fiscal problems demonstrate, meanwhile, how a single-minded emphasis on tax-cutting combined with California-style voter mandates and institutional constraints can also lead to a crack up. Arizona basically gave away the store in better times by handing out an inflation-adjusted $2.9 billion in ill-advised tax cuts over some 15 years unaccompanied by spending cuts. Major new education and Medicaid expansions in the last decade added to the problem, but for the most part a fiscal disaster resulted from the combination of massive tax cuts, voter mandates and a super-majority requirement for any revenue increase.
The long-predicted result: The Arizona general fund is now short some $3.4 billion, or a full 33 percent of the needed total, for FY 2011 with fully two-thirds of that amount associated with the state's permanent structural gap.