Morrison Institute for Public Policy Publications Archives

For a century, Arizona has pursued prosperity through outward expansion of its urban areas. In metropolitan Phoenix and elsewhere, “growth” has meant developing raw land with new houses, new shopping centers, and new industrial parks--and the metropolitan “frontier” has moved farther outward from downtown every year. This has not been uniformly true, of course. Some cities--Phoenix, Tempe, and Scottsdale especially--have been grappling with the question of revitalizing older urban neighborhoods for many years. But the “outside game” has been the predominant development pattern in the Valley of Sun for many decades. And the Phoenix region has played this game better than one might think, creating many high-quality master-planned communities, protecting lots of open space, using impact fees to build good infrastructure. In other words, Phoenix has used the “outside game” to create a region so attractive it continues to be one of the fastest-growing metropolises in America. But in order for cities to play a good inside game, Arizona must get serious about urban revitalization. And that will require big changes.

The biggest economic trend in Arizona over the last decade has been the flat line on various measures of prosperity relative to the national average. Arizona always has been below the national average on measures such as the average wage, earnings per employee, and per capita personal income. However, Arizona compares less favorably now than it did in the 1970s and early 1980s.

The war on poverty during the 1960s succeeded, cutting the national poverty rate in half by the early 1970s. Since then, however, the poverty rate of Americans under the age of 65 has increased. The poverty rate has climbed particularly among children; compared to an average of 15.5 percent during the 1971-to-1975 economic cycle, the poverty rate in each of the three cycles since 1982 averaged between 18 percent and 21 percent. One-in-five children lives in poverty and Arizona has consistently experienced higher poverty rates than the national average for all age groups except seniors.

Public finance—taxes and other revenues collected by government and the expenditure of those revenues—always has been somewhat controversial because of wide philosophical differences among residents regarding the role that government should play in providing public services and in collecting taxes and fees from its residents. Recently, public finance in Arizona has become a prominent public issue due to the need to resolve the deficits that afflict state government and most county and municipal governments in Arizona.