Critique of Napolitano's Proposed FY 2009 Budget

News Release
FOR IMMEDIATE RELEASE: Friday, January 25, 2008
CONTACT: Steve Voeller: (602) 346-5061

Arizona Free Enterprise Club Criticizes Napolitano’s Reckless Budget Proposal
Governor’s budget proposal adds $2.3 billion in debt, according to JLBC

Phoenix, AZ – Steve Voeller, president of the Arizona Free Enterprise Club, a pro-economic growth advocacy group, today criticized Governor Janet Napolitano’s proposed fiscal 2009 budget.
In response to a $1.7 billion 2009 budget deficit, the Governor’s plan calls for $2.3 billion in new debt, an early tax payment, an expansion of photo radar, increased taxes from the lottery, and $700 million in revenue figures above consensus forecasts.

“The Governor’s budget plan for 2009 is irresponsible and should be rejected,” Voeller said.

The Governor’s plan shifts from paying cash to borrowing money for the following items:

$864 million School construction (FY’08 and ’09)
$967 million University building and maintenance
$470 million Phoenix medical school
$50 million Public safety communications
$7 million Emergency operations center
TOTAL $2.358 billion (source: Joint Legislative Budget Cmte.)

To realize new revenue, the Governor asks businesses to pay their July estimated retail taxes in June, meaning businesses will have to pay both June and July payments in the same month. She also assumes $90 million in revenue from an expansion of photo radar. It is unclear how much it will cost to implement photo radar statewide or how many tickets will have to be issued to net $90 million.

The Governor plans to spend additional state money promoting the lottery in hopes that an increase in lottery participation will bring $10 million to state coffers.

The Governor’s plan also calls for a $60 million shift from the state’s balance book to county budgets by housing felons in county jails rather than state prisons.

Over the last five years, government spending increased 32 percent after adjusting for population and inflation.

“The most troubling aspect of the Governor’s budget is the total lack of fiscal discipline,” Voeller continued. “After years of overspending, she attempts to plug a $1.7 billion dollar budget gap with $2.3 billion in new debt.”