Razing Arizona: A ‘Failed State’

Posted by AzBlueMeanie:

Br_cover_mar_apr_11 The cover story of the March/April edition of Boston Review (h/t David Johnson) is captioned "Failed State." Yes, it is about Arizona.

Tom Barry writes a lengthy essay that ties together all the threads of information that the writers here at Blog for Arizona have posted about for years. It is a solid read that should be required reading for anyone in politics and public policy. Boston Review — Tom Barry: Securing Arizona. Due to the length of this essay, I will highlight only a few portions, but seriously folks, read the whole essay:

In the 1990s Arizona enjoyed enviable budget surpluses as sales and property taxes—stimulated by the housing boom—flooded government coffers. At the same time, Arizona’s political leaders curried favor with voters with near-annual tax-cutting bills. As the housing bubble kept expanding and the good times kept rolling, the state legislature faithfully approved new spending packages without allocating revenues that would pay for them.

When the bubble burst in 2007, an epidemic of foreclosures and traumatic declines in housing valuations bred fiscal crisis. In 2007 Arizona was the nation’s fourteenth-poorest state, but today it is second only to Mississippi. In 2009 it faced the largest income-spending gap in the nation.

No other state faces such a grave threat to its stability. A Brookings Institution study [PDF] of state finances in four Western states put Arizona—with its projected 33 percent budget deficit—in far worse circumstances than even California.

According to the Brookings study, in the 2011 fiscal year, Arizona faces a 12 percent cyclical budget deficit, amounting to $1.2 billion; a 21 percent structural deficit, or a cool $2.1 billion; and a loss of $2.4 billion in federal stimulus funds that propped up the state’s 2010 accounts.

Instead of raising taxes, the Republican leadership has taken the fiscal crisis as an opportunity to downsize government, cut social services, and privatize. The Supreme Court building and the governor’s office tower now belong to private investors, prisons are being sold off, and full-day kindergarten has been eliminated.

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Opposition to big government and the Obama administration plays well at the State Capitol. Conveniently missing from this narrative is the back-story of federal subsidies and contracts.

At last count, Arizona received $1.19 in federal spending for every dollar sent to Washington, which makes it a beneficiary state. In contrast, California gets $0.78 back for every federal tax-dollar paid, Nevada just $0.65, and Colorado $0.81, while Utah receives $1.07 and New Mexico $2.03. The taking culture of Arizona includes the state’s retired masses, whose Medicare and Social Security payments not only help keep them solvent, but also direct federal government revenue to the state’s still-thriving medical-care sector.

Big Government came to Arizona’s rescue in 2009 with the American Recovery and Reinvestment Act (ARRA), which allocated $4.3 billion—nearly half of Arizona’s annual budget—to stabilize the state’s finances and stave off economic collapse. The termination of ARRA funding is sending shock waves through state agencies, local governments, and Arizona’s education and health providers.

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Federal dollars also help explain Arizona’s historic rise. How else to explain a housing oasis in the northern Sonoran desert? Remarking on this mystery, writer and environmental activist Edward Abbey wrote, “There is no lack of water here, unless you try to establish a city where no city should be.”

Big Government made this desert miracle possible with two massive water diversion projects—the Salt River Project and the Central Arizona Project (CAP). Envisioned by Barry Goldwater, CAP is the largest and most expensive aqueduct system ever constructed in the United States. Its exclusive purpose is to feed Colorado River water to parched Central and Southern Arizona. Massive pumping of groundwater, accumulated over the eons in aquifers, further enabled the desert bloom. But depleting groundwater reserves and climate change–induced drought in the Colorado Basin now loom as the most serious threats to the Arizona development model.

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Raising taxes is unavoidable, but so too are budget cuts. Like many other states, Arizona spends mainly in four areas: K–12 education, health care, higher education, and criminal justice and corrections. The first three have been cut dramatically, but not the fourth, which arguably creates many of the state’s costliest problems. The deepening fiscal crisis could be regarded as an opportunity not only to cut criminal justice and corrections budgets but also to overhaul a penal system that incarcerates nonviolent (and overwhelmingly nonwhite) violators of drug laws.

The ideological and corporate-driven assault on government and the public goods it offers has brought Arizona’s government—along with other states’—to its knees. At the same time, that assault has devastated the sense of common identity and community trust that has been the foundation of good governance in the United States.

Arizona as we now know it cannot survive, even if there is another housing boom around the corner and government budgets are stabilized. The Arizona model of sprawling, low-density desert cities was built on the myths of limitless water and perpetually cheap gas and construction labor. The entire country faces the onset of climate change and energy scarcity, but no state will confront as squarely as Arizona the consequences of its patterns of unsustainable development. Instead of moving to meet the challenges of the future, Arizona is decimating educational infrastructure; it is already demonstrating its loyalty to old ideologies over long-term planning.

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In the wake of the Tucson massacre, border-security and anti-immigration rhetoric has been toned down a notch or two. And the enormity of the budget crisis may yet create new political space in Phoenix for realistic, less ideological debate over budget priorities.

Whether Arizona can steady itself remains to be seen. But there is little reason for optimism. America’s new model state may already be a failed state.

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