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- All Subjects: Arizona--Economic conditions
- All Subjects: Public universities and colleges -- Economic aspects -- Arizona
- Creators: Rex, Tom R.
The state government general fund shortfall in the current fiscal year is projected to be between about $550 million and $1 billion. This shortfall will need to be eliminated through spending cuts and/or revenue enhancements. The Legislature has demonstrated a preference for spending cuts. However demand does not decline during a recession for most public-sector services, including university services. Any reduction in funding for universities will have a negative and direct effect. A reduction in state government spending for universities of around $200 million would cause direct and indirect job losses of approximately 4,000. A substantial decrease in state government funding for universities will have negative consequences beyond these short-term effects.
Following an analysis of economic conditions, this paper examines actions that can be taken by state governments to stimulate the economy. The only action that results in a significant near-term effect is to accelerate spending on physical infrastructure that has already been identified as needed.
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.
Arizona’s total value of international exports as a share of gross product was 33rd highest among the 50 states and District of Columbia in 2012. Arizona ranked 36th for manufactured goods. In 1997, Arizona had ranked eighth overall and ninth for manufactured goods. The state’s large relative decline in export share can be traced to its sizable relative decrease in its manufacturing sector. In particular, the electronics manufacturing subsector’s share of total GDP has dropped considerably.