State Capitol News
2:45 pm
Wed November 11, 2009

Arizona following California into deep recession

Phoenix, AZ – A new study today suggests that Arizona is in danger of following
California into its financial hole.

The Pew Center on the States noted the situation California has
found itself in due to the recession. But the report concluded
that the factors that put that state into a deep hole are not
unique. It graded Arizona's financial condition almost as bad.
The authors said even as revenues dipped, state officials relied
on one-time fixes instead of making long-term changes. Gov. Jan
Brewer agreed that what is going on now was a long time in
coming.

"We have, and have had, a structural deficit building in our
state for the last six, seven years. And we need to address that
issue. That's what I've been attempting to do all along. And I
will continue to do that."

The study also also said Arizona is plagued by having a tax
structure that is dependent on growth. But the report also said
the state limited its revenues with sharp tax cuts in the 1990s.
The conclusion that was a bad thing is not shared by Brewer who
was a legislator at the time and voted for those cuts.

"Well, I think at the time they were probably not a mistake. I
believe that we need to cut spending, we need to reduce taxes. I
think that's good, sound economic strategy."

The current gap between revenues and spending this fiscal year is
close to $2 billion.