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.

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.

This Plan defines visionary, yet pragmatic, investment choices Arizona will make over the next 25 years to maintain and improve its multimodal transportation system. The Plan is not rigid or fixed. It is part of a continuous process of planning, implementation, operation, and preservation and will evolve over time to reflect and be responsive to future changes in needs, resources, and priorities. This Plan is strategic in nature, examining investment types for ADOT’s capital program; it does not examine nor recommend any specific projects.

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.

The condition of Arizona’s infrastructure has a direct impact on economic productivity and quality of life. As economic competition expands domestically and globally, and as the knowledge economy evolves, the importance of a strong infrastructure increases. Education, in particular, is of growing importance. Arizona’s infrastructure challenges will require commitment and creativity to meet the needs and potential of 10 million people and to ensure a positive future for the state.

This report examined the effects of freeway development on land use and property values. A case study was prepared for the Superstition Freeway (US60) corridor in Mesa and Gilbert, Arizona. Among the findings were the following observations:
* New freeways provide substantial benefits to users in the form of travel time savings and reductions in costs associated with operating motor vehicles.
* Access benefits are transferred from highway users to non-users through changes in property values.
Freeway construction may have an adverse impact on some properties, but in the aggregate, property
values tend to increase with freeway development.
* Not all properties values are affected by freeways in the same way. Proximity to the freeway was observed to have a negative effect on the value of detached single-family homes in the US60 corridor, but to have a positive effect on multifamily residential developments (e.g. condominiums) and most commercial properties.
* The most important factor in determining negative impact on property values appears to be the level of traffic on any major roads in the proximate area, which implies that regional traffic growth is more significant than the presence of a freeway per se.
* Given the beneficial effects of freeway development on the value of certain types of properties, local
governments may benefit from appropriate planning and zoning decisions in the vicinity of a freeway
corridor.

Seeking to identify how Arizona Department of Transportation could accomplish the greatest service improvements with the most efficient use of funds, ADOT engaged ARCADIS to perform a Crash Data Collection and Analysis study and examine the possibilities offered by technological innovations such as Electronic Data Entry, Relational Database Management Systems, and Geographic Information Systems. The study resulted in a comprehensive report with three components: an examination of best practices in use in the United States today, a use case and gap analysis examining ADOT's current data work, and a technical memorandum outlining how changes could be implemented.