It’s All Janet’s Fault

By Sean Noble

The Arizona State Treasurer’s office recently announced that there may not be enough cash in State coffers to pay the bills as early as next month. In fact, there is no question that Arizona is going to need to borrow money to pay operating expenses, and it is an open question as to whether any lenders will actually loan money to the state, and if so, under what terms. Because of the current condition of our financial markets, the terms of any potential loan are likely to be pretty steep.

The smartest guy that most Arizonan’s don’t know is an economist named Alan Maguire. Maguire has been a fixture in and around state government for the better part of three decades. He served for years as the right-hand guy to then-State Treasurer Ray Rottas. He has advised multiple Speakers of the House and Senate Presidents. He has developed complicated legislative packages, financing packages, and stuff that I can’t even begin to explain.

And right now, he is like a prophet in the wilderness, trying to warn anyone who will listen, that we are on the very edge of financial doom. Everyone in this state, particularly policy makers, needs to be listening to Alan Maguire.

The numbers are very stark. For the remainder of FY 2009 (which ends in June) there is a $1.2 billion shortfall – which if annualized is the equivalent of a $3.6 billion shortfall. The state budget is about $10 billion per year, half of which is off-limits because it is “voter protected” or federally mandated. So, with $5 billion to work with, the state needs to save the equivalent of $3.6 billion for the rest of this year and another $3 billion for FY 2010.

To give you a sense of the enormity of the problem, you can take the ENTIRE budgets of our Universities, Department of Corrections, Department of Public Safety, Department of Revenue and Department of Administration and still not cover the shortfall for this year.

How did we get here? Well, we were in good economic times for nearly the entire six years that Janet Napolitano has been Governor, and she has pushed an aggressive agenda of higher spending. In fact, state spending increased by an eye-popping 63% from 2004 to 2008! That makes Congress look like a piker.

That kind of growth of government was bound to catch up to us, and it has in spades. Now, Napolitano is high-tailin’ it out of the State and leaving soon-to-be-Governor Jan Brewer holding the bag. The severity of the budget crisis has been largely ignored by the mainstream media, particularly the Arizona Republic. My guess is that they will discover the problem the day after Brewer is sworn in as Governor.

Brewer and her transition team should be aggressively pushing the narrative that this crisis is Napolitano’s making. The way out of this financial hole is going to be very, very painful for hundreds of constituencies across the state. They need to understand that it was the big-government mentality of Gov. Napolitano that got us into this mess.

So, let’s say it together – it’s all Janet’s fault.