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.

Economic development leaders and public officials throughout the country are tending to the effects of a sour economy and huge state budget deficits when they would rather be creating quality jobs and new economy assets. According to the most prominent thinking on today’s knowledge economy, locally developed and exported technology will be the primary economic differentiator between future winners and losers. Thus, with long-term fiscal and economic health at stake, the 50-state race is on for advantages and leadership in science and technology. This report sheds light on these issues through an overview of Arizona’s standing in science and technology today, short case studies of four competitors in the west, as well as Arizona, and ideas for Arizona’s leaders to consider as they strive to give our state an edge.