Arizona Daily Star’s creative headline writer strikes again

Posted by AzBlueMeanie:

I am trained in economics. I read economic data and reports all the time.

So imagine my surprise when I opened my copy of the Arizona Daily Star this morning to see this headline below-the-fold:

Way to put a happy face on what was a dismal economic report. I suppose Howard Fischer is partly to blame for his lead paragraphs in his report, which is probably as far as this copy editor bothered to read. Poverty rate declined in Arizona last year:

Fewer Arizonans were living in poverty last year than the year before that, the U.S. Census Bureau reports.

And the state’s median household income actually increased. Both moves buck the national trend.

Immediately followed by:

But it may not be that Arizonans are, on average, doing better than the rest of the country. Instead, it may simply be that those who were dragging the numbers down simply packed up and left.

Or the numbers may just be wrong.

OK then. Howard Fischer may want to stick to factual reporting in the first few paragraphs and avoid creative writing so that he does not confuse the editors at the Star.

Other newspapers using Fischer's report got the headline right. The East Valley Tribune: Census shows Arizonans living below federal poverty level, and the Arizona Daily Sun in Flag: Arizona among poorest states.

That's not the take-away one would get from reading the misleading Star headline. We've been over this before. Too many people skim headlines and the first couple of paragraphs, at best, in "reading" the newspaper. So misleading headlines and attempts at creative writing in the first couple of paragraphs leads to inaccurate information and misguided beliefs. I can just hear Tea-Publican politicians citing that misleading Star headline to claim, "See! Things aren't so bad in Arizona."

Oh really? Here are a couple of reports from the Arizona Republic today. First, Demand up at Arizona charities:

On Tuesday, the U.S. Census Bureau released figures showing that nearly 19 percent of Arizonans, or more than 1.2 million, lived below the federal poverty level last year. The percentage marks a slight improvement over 2009 but was still high enough to give Arizona the fifth-highest poverty rate in the nation.

Only Mississippi, Louisiana, Georgia and the District of Columbia posted higher poverty rates.

* * *

The government's numbers also revealed that more Americans were living in poverty last year than at any time since 1959, when it started keeping such records. The figures are based on a Census Bureau survey of about 100,000 households nationally.

* * *

Four social-service workers interviewed by The Arizona Republic said what they see doesn't jibe with reports of slightly lower poverty rates. It could be that unemployment checks and food assistance have helped tide people over, keeping them just above the poverty line, the workers said. Also, many residents stuck in poverty may have left the state.

Second, More in Arizona lack health insurance:

The number of Arizonans without health insurance increased slightly in 2010, with about one out of five residents lacking health coverage, according to U.S. census figures released Tuesday.

The census report showed that nearly 1.3 million Arizona residents, or 19.1 percent, had no private or government-sponsored health insurance in 2010. That represented a slight increase from 18.9 percent of residents without health insurance in 2009, according to the census.

Health-policy experts say that uninsured rate reflects the state's stagnant economy.

* * *

Ten states had higher share of residents without health insurance, led by Texas, where 24.6 percent of residents had no health insurance. Massachusetts, which has its own universal coverage plan, had the nation's lowest rate of uninsured at 5.6 percent.

* * *

Some expect that Arizona's share of uninsured will likely swell when next year's numbers come out. Enrollment freezes in Arizona's KidsCare program for low-income children and their families took effect in 2010.

The East Valley Tribune also has this report from Cronkrite News Service. Arizona cities lag far behind other metro areas in economic growth:

Economic growth in Arizona’s metropolitan areas was a fraction of the national growth rate for metro areas in 2010, according to figures released Tuesday by the Bureau of Economic Analysis.

Nationally, gross domestic product in metropolitan areas grew by 2.5 percent from 2009 to 2010, the most recent years for which numbers are available. But no metro area in Arizona grew more than 0.7 percent in the period, and two regions – Yuma and Prescott – actually saw GDP shrink when the numbers were adjusted for inflation.

* * *

“These numbers are no surprise, but they’re dramatic when you see them on a page and you see the economic evaporation right in front of your eyes,” said Dennis Hoffman, a professor at Arizona State University’s W.P. Carey School of Business.

The state’s struggling construction industry was one driver in the poor results: Construction revenue shrank in every city in 2010, and it fell by more than half a percent in Yuma, Phoenix and Prescott.

The decline in construction revenues was less than in 2008 or 2009, but the housing and building malaise will likely haunt Arizona’s recovery for years, Hoffman said.

“We probably have another couple to go,” he said.

If you want a truly sober assessment of just how bad the economic situation is here in Arizona, you need to read this report in the Arizona Capitol Times (subscription required) Fiscal Fright: Budget storm clouds could put state ‘under water’ in 2014:

A combination of stopgap measures, a temporary tax increase and incessant budget slashing allowed the state to precariously stay afloat during the four-year fiscal crisis.

But the horizon promises no relief yet.

In fact, many budget decisions drawn up by state leaders have actually put Arizona on a course toward troubled waters.

In just two years, Arizona faces a financial storm that could rival the worst the state has experienced during the current economic downturn.

* * *

By fiscal year 2014, a temporary hike in the sales tax expires, along with it up to $1 billion in state revenue.[In hindsight, the economic projections behind the three-year tax hike are proving to be, well, maybe too rosy.]

That’s also when portions of the phased-in corporate tax cuts begin.[The tax cuts’ immediate hit to the general fund, in 2014, is fairly small change – estimated to be about $52 million – compared to the total size of the budget. . . The tax cuts are scheduled to steadily grow from FY2014 to FY2018, when they’re expected to cost more than a half-billion dollars, according to state budget analysts.]

* * *

Not all of the fiscal mess that Arizona is headed into is self-inflicted, but some of it is a by-product of the budget solutions state policymakers have adopted during the economic downturn.

Interestingly, state leaders chose 2014 as the year when they come to a head.

* * *

“The most likely scenario would be for growth in Arizona to remain lackluster by historical standards at least through the FY2015-FY2016 time frame,” said Dennis Hoffman, an economist with Arizona State University’s W. P. Carey School of Business.

Actually, Hoffman’s forecast model shows that even under the most optimistic scenario — that means no prolonged recession in the fall and economic conditions snap back smartly going into next spring — state revenues still decline by about $500 million in 2014 over the year before.

In short, the temporary rise in tax revenues that some politicians are calling a "surplus" in reality is no such thing. It is a mirage. Arizona is still mired in a long-term structural revenue deficit brought about by short-sighted GOP economic policies over the past twenty or so years, and the impact of the housing crash on the Arizona economy which is overly dependent upon rapid population growth and construction as its principal economic driver.

At least the editors of the Star got this point correct in an editorial opinion today. Tell Legislature your priorities for state spending:

According to a preliminary July report from the Joint Legislative Budget Committee, fiscal year 2011 had revenues of $8.34 billion, which is $335 million above projections.

This is encouraging, but the JLBC report cautions that the "FY 2011 rebound appears to be more a reflection of one-time factors than a rapidly expanding economy. It may still take two to four years before the state replaces the jobs lost in the recession and substantially reduces its 'underwater' mortgages."

It is premature to declare that Arizona's lawmakers will have a surplus to deal with when they begin the new Legislative session in January. A short spurt of surprisingly positive tax revenues does not a windfall make.

By the time January rolls around, we could be in a double-dip recession brought about by a fiscal crisis in Europe this time. The warning bells from Europe have been sounding for weeks. The American government has set itself on a course for austerity budget cutting during a period of economic contraction, rather than the stimulus spending called for by Economics 101 to revive a slumping economy. The world has gone insane.

There is little reason to be optimisitc about the economic future here in Arizona. So enough with the happy face misleading headlines already.