In recent years, the Arizona
Legislature has grappled with a concept that is probably best
summed up with the familiar phrase: "Pay me now or pay me
later."
According to the Arizona Tax Research Association, state and
local debt grew 49.9 percent from fiscal 2001 to 2006. In 2001,
total state and local outstanding principal debt was $19.3
billion. By 2006, the total was $28.9 billion.
Accumulation of debt at this rate is outpacing even Arizona's
rapid population growth of 17.4 percent. Bottom line: Each of
the 3.2 million Arizona taxpayers' debt payment responsibility
rose from $6,942 in 2001 to $8,984 in 2006.
Frequently, governments use debt financing to address demands
for spending increases like employee salaries and benefits.
Sometimes, debt is used to pay for basic facility maintenance or
ongoing annual expenditures that should instead be operating
expenses. Debt becomes the path of least resistance to pay for
government growth, but it increases the burden on taxpayers.
Many citizens think public debt is like private debt. This is
not true. When private citizens take on debt, they are
responsible for the payments and consequences for not paying.
The penalties for lack of payment create a strong incentive to
keep the debt low.
Public debt is a completely different animal. State and local
government officials obligate the taxpayers with debt that will
likely outlive the people who approved them. Or, publicly funded
campaigns persuade taxpayers to authorize a tax increase for a
new debt obligation.
As legislators work through the state budget, they will hear
from proponents of debt financing who wish to free up money for
new or increased program spending. They will argue that debt is
an acceptable form of financing major capital improvements.
If the governor and lawmakers use the "pay later" model, they
will have money to spend today and taxpayers are responsible for
the payback. - Robert Burns, Peoria
The writer, a Republican, is chairman of the state Senate
Appropriations Committee.
