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By Anonymous Mike, pseudonymously.

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Friday, January 2, 2009
Who Woulda Thunk it?

It's been a month or so since I blogged about the Arizona budget, so you're overdue. A more comprehensive piece in the near future, but for now a little something that indicates to me how some parties are going to try and play this thing out. This is what those guys with the scrambled eggs on their hats would call "battle space preparation."

Espresso Pundit linked the other week to a post at the Tucson Citizen which blames the FY2009 budget, the budget which the Democrats rammed through the waning days of June and immediately began running in the red, on the Governor getting the wrong economic forecast data. Well I'll let the author, Mr. Kimble who by the way is the paper's editorial editor, say it in his own words:

In January 2008, Gov. Janet Napolitano presented her proposal for the fiscal 2009 budget to the Legislature. That’s the budget for the year that is now almost half-over, running from July 1, 2008 to June 30, 2009.

Government budgets are only as good as government economic forecasts. And less than a year ago, the forecast for the Arizona economy was way, way off.

In January 2008, Gov. Janet Napolitano presented her proposal for the fiscal 2009 budget to the Legislature. That’s the budget for the year that is now almost half-over, running from July 1, 2008 to June 30, 2009.

In her budget message, Napolitano referred to “slow economic growth that we anticipate for much of 2008.”


The governor’s report also forecast growth “in each of ‘The Big Three’ tax categories”: sales tax, individual income tax and corporate income tax. Those forecasts were wrong, wrong and wrong.

The report concluded that the state would be able to “bridge the shortfall without significant disruption to the operation of State Government.”...

So far so good, nothing wrong here. There were plenty of people, not all Democrats, who in late 2007 saw the dip in state revenues as something temporary. At that time many people saw no need to seriously cut spending, just tap the Rainy Day Fund and say switch school construction over to financing and ride out this temporary storm. The presumption of Mr. Kimble's writing is that the Governor's poor budgeting was the result of poor staff forecasting as opposed to willful neglect.

However if you look further into Mr. Kimble's wording you note the sleight of hand. He discusses the Governor presenting a FY2009 budget in January 2008 and then proceeds to link the poor forecasts that went into that January proposal with the disaster of a budget that was passed in June. In other words nothing to see here as far as political culpability, no one could have seen this coming... like the January proposal was set in stone and everyone was taken by surprise by what happened later.


Anybody who could read a simple accounting report knew that when the FY2009 budget finally passed in late June that at best would have to be revised sometime during the fiscal year. The situation had radically changed between January and June, after more months of fiscal red ink no one could say with a straight face that growth in revenue was around the corner. However that is exactly what the Governor's budget assumed, because if you believe that revenue will increase over the next year then you don't have to make deeper spending cuts.

Let's put it another way, if you took that budget with those revenue estimates into the private sector in order to pitch for cash, you would at best be laughed out the room or at worst be up on indictment for fraud. The budget was a fiction from the moment it was passed and I challenge anyone to prove otherwise.

Why did the Governor pass a budget that she had to know was a train wreck going to happen? Well in part that is what politicians, and also voters, often do; keep putting off decisions until there are no other alternatives (see California.) However, as I have written before, I think there is something more devious and self-serving here because with the restrictions on debt in state budgets, you really cannot kick the budget problem down the road for very long. The only logical answer was that Governor Napolitano was hoping for a Democrat in the White House and that she would be to skip town before she had to come up with a real solution to the budget deficit.

That's where the battlespace preparation comes in and a topic for another post... this is about going over the past 12 months and assigning (or in this case absolving) blame in preparation for the budget battle royale that will kick off in a few weeks.

Flatly put, Mr. Kimble is wrong and he knows it. Napolitano knew which way the revenue tide was going when that FY2009 budget was finally passed and she chose for her own selfish political reasons to do nothing substantive to solve it, but rather hope she could push it onto her successor.