Put Arizona on a Real Budget: New Spending Limit Can Restore State’s Fiscal Health

As recently as 2006, state revenue was climbing nearly 17 percent per year and few imagined that Arizona could be facing today’s financial crisis. Flush with cash, the state had three consecutive years of double-digit spending growth.

The state’s fiscal fortunes changed quickly. December 2009 was the 17th month in a row of double-digit tax revenue declines, consuming the state’s savings and putting Arizona $1 billion in debt just to maintain day-to-day operations.

Arizona’s financial volatili...