Budget lessons from Arizona


One great thing about having 50 different states trying to balance budgets is that Minnesota can learn from the mistakes of others. Arizona, for instance.

A year ago, 64% of Arizona voters approved Proposition 100, a three-year, one-percent sales tax increase to fund education, which was to receive two-thirds of the proceeds; health care and public safety would split the other third.

The tax produced less revenue than expected, but that wasn’t the biggest snag.

Although the money is directed into specific spending areas, there was nothing in the law to prevent lawmakers from cutting other funds that pay for education, health care and public safety.

And that’s what they did as they approved a fiscal 2012 budget.

Gov. Jan Brewer promised early in the session she would “protect” total education funding at the State’s FY 2006 funding levels. In effect, that meant a reduction of $72 million in K-12. Higher education spending for FY 2012 would be “protected” with $170 million cut.

The Arizona Republic reported then that some high-tech businesses were not too pleased

Gov. Jan Brewer and the state’s top lawmakers got a reality check Tuesday from former Intel Chief Executive and Board Chairman Craig Barrett, who told them Arizona’s education system is hindering economic-development efforts. “Quality education is extremely important to a place like Intel,” Barrett said. “(The) education cutbacks don’t bode well for that.”

Barrett said if Intel were starting anew, Arizona likely wouldn’t be in the running for its business. “I hate to say it, but I think Arizona would not be in the top 10 locales to make that investment,” he said.

It got worse. The “compromise” Republican Brewer made with her Republican legislative majorities resulted in a $183 million reduction for K-12 and $198 million less for universities plus a $72.8 million cut in aid for community colleges.

In all, $1 billion of the $1.1 billion in reductions made by the Arizona legislature — beyond the governor’s own cuts to close the gap — came from education and health care.

So, to recap the lessons from Arizona:

  • Voter initiatives to preserve spending can backfire
  • It’s hard to protect education if legislators don’t believe in the system
  • Smart corporations look for quality education over low taxes
  • Legislative “compromise” on the budget means the same thing it means here.