Sen. Pierce: Paying Off Debt a Priority
Well, that didn’t take long. The state hadn’t even closed its books on the outgoing fiscal year, and already there were some in the Legislature clamoring for us to spend money we don’t have. The reason? The past few months has shown an increase in state revenue compared to projections, but there is a big problem with this logic. Just because we are ahead of projections doesn’t mean we are operating in the black. It just means we are running ahead of monthly projections. In fact, we have bills totaling $1.5 billion that we haven’t paid yet. Republicans saw the big picture and knew we needed fiscal discipline immediately. We submitted a truly balanced budget that the Governor signed. No gimmicks and no new rollovers. We will spend only the money we have in our bank account. It is becoming obvious from the noises on the other side of the aisle that Republicans are going to need to be the responsible ones again next session, resisting the temptation to spend money that isn’t accounted for. The Joint Legislative Budget Committee (JLBC) publishes an update on our state’s economy every month. In the past three months, the JLBC has noticed an uptick in revenues coming into our state. If the numbers were a clear sign that the economy is bouncing back strongly, the other side might have a point. But look at the explanation from the JLBC for the increase. “The primary reason for the revenue overage is the unexpectedly high 18.5% increase in individual income taxes. Given the lack of job and wage growth, this spurt may have been caused by higher capital gains and the loss of mortgage interest deductions.” Hardly a reason to start spending irresponsibly again. The State of Arizona has accumulated deficits in FY 2011 totaling $1.5 billion. We are going to be paying off those debts for the next twenty years. We must make it a priority to repay these commitments, and a bump in revenues allows us to consider it. The last thing we should be doing is to ignore these commitments and look for other ways to spend taxpayers’ money. People have to know that the state stands by its commitments to pay its bills. One group thinks it would be a great idea to take all the revenues over projections and funnel them into public education. Although this group shares our support for education funding, it is misguided to think this is “real money” that is looking for a place to be spent. The state has already spent this money, and it needs to be paid back. Republicans have held the line on reductions to education. At a time when we reduced the size of government by 12%, education funding was reduced by just 1.5%. Leadership is fully committed to getting as much money into the classroom as possible. Education is still 52% of the state budget. You’ll be hearing a lot about 2014 in the upcoming session. That is the year the temporary one-cent sales tax increase ends. That means around $900 million in funding disappears. Our state must be prepared for that loss, and your legislative leaders are already making plans to cushion the blow. One thing we should absolutely not do in preparation for this fiscal cliff is to hijack money that needs to go to debt repayment and divert it to other causes. We heard what the voters said in November 2010. We are getting the state’s fiscal house in order. Let’s not shirk on that responsibility at this critical time in our state’s future.