Arizona Policy Choices

Balancing Acts: Tax Cuts and Public Policy in Arizona

Arizona's Investment Opportunities

George Miller, Mayor
City of Tucson

According to information prepared by the Governor's Office of Strategic Planning and Budgeting, the State of Arizona finished the 1996 97 year with a budget surplus of over $900 million, of which approximately $594 million was in the general fund. This surplus was realized despite the cutting of state property and income taxes by $664 million since 1992. The underlying theory for the tax cuts is that they stimulate the economy by allowing for greater private investment and are therefore good for the state. It seems to me that a sense of balance needs to be brought to this policy debate. Other investment opportunities besides cutting state taxes and maintaining large rainy-day surpluses need to be considered. A wise investor doesn't rely on only one or two investment strategies. Consider the following examples of how we could stimulate the economy and strengthen our state through the public investment of available funds.

Other investment opportunities besides cutting state taxes and maintaining large rainy-day surpluses need to be considered. A wise investor doesn't rely on only one or two investment strategies.

Expand the Economic Base, Create Good Jobs, Put People to Work, Reduce Poverty

Available government funds could be invested in public infrastructures like streets, mass transit, parks and recreation facilities, libraries, and schools. These public investments are necessary to attract and retain high-quality businesses that will create good-paying jobs and expand the state's economic base. Improved streets and transportation systems make it easier for business to operate and for people to get to work. Parks and recreation facilities and libraries help to transform a city into a vibrant, caring community that business will want to be a part of and people will want to live in. Investments made in our public school system, community colleges, technical schools, and universities will provide the opportunities for people of all ages to obtain the skills and knowledge to perform the jobs of the future. Additional public investment can also make possible more partnerships among business, education, and government.

Foster Neighborhood and Family Values

Local governments must get back to basics and invest more in building/rebuilding and maintaining neighborhoods so that families can develop, grow, and enjoy their lives together. To those ends, public investment could provide for new sidewalks, street lights, traffic calming features, trees, graffiti abatement, neighborhood clean-up, and improving or removing vacant abandoned houses. Greater public investment would provide funds for expanding community policing and crime-prevention strategies. Schools and public facilities such as recreation centers and libraries could be open more hours and provide more services. Youth programs could be provided so that young people can be productively employed, given caring guidance, and encouraged to stay in school and graduate.

Protect the Environment

All citizens are concerned about making our communities safer by reducing crime and violence, and by ensuring clean air and drinking water. To ensure clean air and water, investments could provide for expanded mass transit, more rigorous vehicle emissions testing, and the increased protection of our streams and groundwater.

Improve Government Productivity

Everyone decries bureaucratic waste, but to make government more productive investment is needed in communications technology, computer systems, and access to the Internet. Government employees need to be trained in customer service, modern-management methods, and the application and use of the new technologies.

Final Comment

As a retired businessman and as mayor of the state's second largest city, I appreciate the need to set aside some cash in a rainy-day fund. I also understand that money wisely invested will yield a large return. Therefore, I believe that state budget surpluses in excess of the amount deemed prudent for the rainy-day fund should be used for nonrecurring infrastructure investments. Also, instead of automatically pursuing tax cuts, options for the public investment of available funds, such as the previous examples, should be carefully studied and, wherever possible, implemented. As investors in our community's future, taxpayers deserve the greatest return on their money.

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Morrison Institute for Public Policy