This is a summary of several reports related to government finance in Arizona that have been produced by the Office of the University Economist since December 2008. Some new information has been added in an attempt to provide a complete picture. The format of this report is a brief summary by issue, sometimes accompanied by a table or chart. References are provided to the report and the page number where additional detail can be found.

Volume I: Facts
Analyses of Arizona state government finance, using data of the Arizona Joint Legislative Budget Committee, and of the combined finances of all state and local governments within Arizona, using data of the U.S. Census Bureau. A historical perspective is provided for both datasets. For combined state and local government finance, comparisons are made to other states and to the national average. In addition, other measures of the tax burden by state are examined.

Volume II: Concepts and Issues
Addresses the conceptual and empirical relationships between taxes, government revenue, and economic growth. Also discusses current issues specific to Arizona state government finance. This is a revised version of the report "Tax Reductions, the Economy, and the Deficit in the Arizona State Government General Fund," incorporating new and updated material.

Volume III: Options for Managing the Arizona State General Fund
Presents options and offers recommendations for managing the Arizona state government general fund. The near-term budget deficit is addressed as well as ways to prevent budget deficits from recurring every time economic growth slows.

The purpose of the stabilization fund is to reduce the fluctuations in general fund revenue caused by the economic cycle. These fluctuations result in large budget surpluses in some years and large deficits in other years. Without considering the structural deficit, the budget stabilization fund almost certainly will not have the funding necessary to offset the cyclical reduction in revenue that will occur during the next recession.

Previous studies at Lake Havasu and Lake Powell, combined with other national data indicate that carbon monoxide poisoning from recreational watercraft can create a significant health hazard. The current study was designed not to repeat the 2003 study. Instead, it was designed to explore the potential health effects of carbon monoxide under the conditions of Humbug Cove. Humbug Cove is known for congregating idling boats, higher frequency of alcohol consumption, and being a location that was secluded and sheltered from breezes or wind.

This report presents an assessment of human health risks from exposure to surface soil metals in the Old Tungsten Mill, Tucson, AZ. City of Tucson officials had planned to build a park, on a parcel of land they owned west of Silverbell Road and north of Speedway Boulevard in Tucson, Pima County, Arizona. They had raised $200,000 in bond money to study what was the Old Tungsten Mill site when they found high levels of contaminants in the soil. The Arizona Department of Health Services, Risk Assessment & Health Consultation Program offered assistance to the city. On October 13th, 2006 City Officials asked ADHS to perform a health consultation to evaluate whether exposure to contaminants in soil pose a public health hazard, either currently or during possible future reuse of the land.

The Arizona Department of Health Services received a request for a Health Consultation from the City of Litchfield Park, dated March 5, 2007. The nature of the request was for ADHS to determine if there was a risk to public health from eating fish taken from Tierra Verde Lake. The City sponsors an annual fishing derby and believed that some citizens were eating the fish they caught. The City tested their lake water and for the very first time, measurable amounts of perchlorates were detected. The probable source for the perchlorates was thought to be from a groundwater, contaminant plume originating from the Phoenix Goodyear Airport Superfund Site.

Local residents expressed their concerns regarding the tailings from the Iron King Mine and Humboldt Smelter at Dewey-Humboldt, AZ. The purpose of this health consultation is to evaluate the available water and soil sampling results to determine if the detected metal levels pose adverse health effects when residents come into contact with the water or soil. In 2008, EPA initiated the field investigation portion of the Remedial Investigation and Feasibility Study for the Site. The primary objectives of the RI/FS are to determine the nature and extent of contamination and to gather sufficient information so that EPA can select a long-term remedy that eliminates, reduces, or controls risks to human health. The investigation included the collection of airborne particulates, groundwater, surface water, surface soil, subsurface soil, and sediment data across the entire Site. Data from the RI/FS was not available at the time the health consultation was prepared and thus it was not incorporated into this health consultation.

For those interested in one of the most extreme state tax and expenditure limitations, TABOR – Colorado’s initiative that limits the funding of most expenditures to annual revenue growth restrained by the sum of annual population growth and inflation rates – would seem to be exactly the right choice. To some, the initiative simply limits government to spend within its means. However, the analysis in this paper reveals that, true to the language in the 1992 Colorado initiative, TABOR limits government growth, and over time the public sector, as a share of the overall economy, declines sharply – crowding out opportunities for investments in strategic initiatives or opportunities for tax reform that may be popular with large voter constituencies or the business community. Advocates point out that provisions in TABOR do allow for voter overrides, but these are costly in both time and money, and until the overrides take place, government is
hamstrung. A simpler, more efficient alternative would be to elect fiscally conservative legislators and hold them accountable for prudent fiscal decisions that strike the right balance between a tax base conductive to economic growth and strategic investments that provide public sector infrastructure, nurturing the business climate and promoting the health and well-being of the citizenry. The paper first outlines the TABOR amendment in Colorado and examines its fiscal consequences for that state. It then examines the potential impact of a TABOR in Arizona.