Arizona State and Local Government Documents Collection

The Office of the Auditor General is a legislative agency under the direction of the Joint Legislative Audit Committee. The Office provides information to the Legislature and various other governmental entities, which assists them in overseeing operations, improving their financial management and effectiveness, and giving the public a measure of accountability.

The Department of Environmental Quality is responsible for ensuring that owners and operators of petroleum underground storage tanks comply with federal and state financial responsibility requirements. These requirements help ensure that UST owners and operators can pay to clean up leaks and spills and compensate third parties for bodily injury and any property damage incurred. Sites and/or operators of petroleum USTs include service stations, convenience stores, and local governments. The Department continues to fail to ensure that UST owners and operators meet financial responsibility requirements. Although the Department has begun to take steps to identify and address some of the weaknesses with its financial responsibility program, it should take additional steps, including developing policies and procedures to ensure UST owners and operators comply with financial responsibility requirements.

Students FIRST (Fair and Immediate Resources for Students Today) was enacted July 9, 1998. This paper will focus on (1) the facts and direct rationale behind the payment for K-12 school construction from a pool of current general fund dollars, as mandated in the Students FIRST provisions; and (2) the implications and logical consequences of bonding versus paying for capital improvements with cash on an annual basis. 'Track 1' designates the status quo strategy of cash payment for capital improvements, while 'Track 2' represents a strategy for bonding that distributes the costs of the projects to taxpayers over the course of their useful life.

Various measures of Arizona state government expenditures suggest that state spending has increased substantially, both in recent years and during a longer period stretching back to 1990. However, increases are much more modest after adjusting for inflation and the state's rapid population growth. Further, the spending increases generally have been in line with the gains in various measures of income.

The state government general fund shortfall in the next fiscal year is projected to be $2.4 billion. A projected shortfall of $1.6 billion will need to be closed through spending reductions and/or revenue enhancements. The Legislature has focused on reductions in funding to state agencies. However demand does not decline for most public-sector services during a recession. Spending reductions by governments during recessions also worsen economic conditions. State spending cuts would worsen and lengthen the economic recession. The negative economic effects from a personal tax increase would be less than those of a governmental spending decrease. The demand for university services also does not drop during recessions. Any reduction in funding for universities will have a negative and direct effect. A substantial decrease in state government funding for universities will have negative consequences beyond these short-term effects. Any action--such as budget cuts--that undermines the success of the state's universities also impairs the state's economy.