The merits of Prop 301 are debated. It’s a measure, referred to the ballot by the legislature, that transfers the balance of money in the Land Conservation Fund to the state general fund to help balance the budget.
Ted Simons: State lawmakers are asking voters to transfer the land conservation fund's estimated $123 million balance to the state's general fund. The conservation fund was created by voters in 1998 when they passed growing smarter, an effort to protect land from development. Here in support of Prop 301 is Kevin McCarthy, President of the Arizona Tax Research Association. And opposed to Prop 301 is Sandy Bahr, Director of the Sierra Club's Grand Canyon chapter. Good to see you both. Thanks for joining us.
Sandy Bahr Thank you.
Kevin McCarthy: Thank you.
Ted Simons: Why is this necessary, Kevin?
Kevin McCarthy: Ted, as you know and Arizonans know, our state budget has been in a deficit position now for a good three years. We are in Arizona experiencing the largest percentage of deficits than any other state in the country. State lawmakers have probably done everything that they ever possibly could think of to do that from tax increases to major budget cuts to budget gimmicks, selling the capitol and kicking expenditures into the future and raiding funds. Arizona's state budget is more complicated than some states in hat initiatives have been passed that have tied legislators' hands to make changes from a spending standpoint as well as revenues. This is -- this was an initiative that passed in 1998 that actually took money out of the general fund as the intro noted to buy open space. I think most legislators that are cutting K-12, ending full-day kindergarten have long come to the conclusion that continuing to do that and buy open space didn't make all that much sense, but you have to go to the voters to get them to review that. If they respond favorably, it's $124 million in one-time money that will alleviate other more budget cuts or a tax increase.
Ted Simons: Why is it a bad idea?
Sandy Bahr: It's a bad idea for several reasons. First of all, I want to correct one thing. It was not a voter initiative. It was referred to the ballot by the legislature to take $20 million per year for land conservation. And they offered this up instead of dealing with gross management as part of the growing smarter act. The voters approved it. They approved it for 11 years. And the dollars are matched by local communities, Phoenix, Pima County, Flagstaff, Scottsdale, different communities. And so in effect when they take this money out of the land conservation fund, they're not just taking $123 million, they're taking double, $246 million. That money goes into the trust. This is only for state trust lands. It's not for general land conservation. It goes into the trust. The primary beneficiaries of the trust are the public schools. So by sweeping these dollars from the land conservation fund, the legislature will hurt both conservation and education. It's a very bad idea, and I would argue that there are many other things the legislature could have looked at, but they looked at ways to hurt parks and conservation which really makes a lot of sense during a down economy.
Ted Simons: The idea not to raid long-term dedicated funds, but instead just raise revenue if you need the money, is that a valid argument, valid concern?
Kevin McCarthy: Well, you know, it's an interesting dilemma. When the advocates of ballot box budgeting, whether it's the prop 302 or 301 or any effort where folks want to go to the ballot and vote for the expenditure of public funds, that they think it's a good idea when it's going their way, but that same act that will occur this November to vote again on this, they seem to be offended by it. The bottom line is, the lack of flexibility that is created when you do ballot box budgeting, whether it's the growing smarter or first things first or any of the rest of those doesn't contemplate a 40% reduction in general fund revenue. It doesn't contemplate a national recession that rivals the Great Depression. The fact situation that existed in '98 couldn't be more different than the one we face in 2010, and it is fair to have people I think review whether or not they still think that's an efficient use of funds.
Ted Simons: The idea of reconsidering, letting the voters reconsider, it's a different time, different situation, different crisis as far as the budget is concerned. Why not reconsider?
Sandy Bahr: They are reconsidering. We're encouraging them to vote no. They finally realized these are voter protected. That's only after trying to pass several bills to sweep them for other purposes. They finally recognized that these dollars indeed are voter protected. They did refer them appropriately. We don't think they should be swept, and we're asking the voters to reject this. So it's not a matter of being offended by the fact that it's on the ballot. We think that it's the wrong thing to do and the wrong way to go. We have so very little for conservation in this state. We've decimated our state park system. There's very little that goes to conservation of state trust lands. Local communities have taxed themselves through tax funds and other means to come up with the match for conserving those funds. And the dollars benefit the school kids in this state. It seems like doing this and hurting conservation and kids is a really bad idea.
Ted Simons: How do you respond to that?
Kevin McCarthy: Again, our organization through this crisis has supported budget cuts and tax increases and trying to maximize flexibility to set priorities that make sense. I don't think that the average Arizonan believes that at a time we've got a 40% reduction in revenue, we've eliminated full-day kindergarten, we're about to eliminate health care for children, that it makes sense to spend $40 million in buying open space in this economy. That's what we're about. We have a budget crisis of epic proportions. It gets down to prioritizing how your money is going to be spent. And to that end, prioritizing the cuts and buying open space at this point I don't believe and I don't think Arizonans will believe is more important than some of the budget cuts that actually still await us.
Ted Simons: Education, health care, prisons, these sorts of things, those that support the proposition are saying those things are going to get cut big time if they don't somehow get their hands on this money. How do you respond to that?
Sandy Bahr: Well, I think that those dollars are a lot safer in the trust for the school kids of this state than they are with the legislature appropriating them. I know there's a lot of concern what the voters do on the ballot, but I've watched the legislature for 20 years and what they do with budgets, and they make some pretty bad decisions. And they -- they look to cut education. They look to cut conservation whenever they can instead of being a little bit more creative. They could close some loopholes. That was off the table. They wouldn't even consider that. And so yeah, it's a tough economy, but the other thing that I think is important to recognize is these dollars go away. They sunset in 2011. So we're not going to have additional dollars for conservation. People think that's really important for our future. And, again, these dollars don't just go into some, you know, fund that can be used for anything. They go into a trust which has a higher level of management, and they have to benefit the school kids of this state which we think is a better use than what the legislature would do with them.
Ted Simons: The idea that the legislature would trust what the voter would do with this money, in these times that the budget is so frazzled and in such a state and lawmakers haven't thought about doing the best job they could as far as the budget is concerned, why should voters trust lawmakers on this?
Kevin McCarthy: You know, at the outset, it's a real challenge that different special interest groups -- and Sandy is right, this was a referral -- would like to do an end run around the representative government that we have, and the calculations that occur in budgets are so many and so complicated, it becomes almost impossible if you're going to do all of it at the ballot box. Each one of those special interest groups, if they have the wherewithal to do it, they like to do that. You can argue in isolation all the multitude of problems. At the end of the day, if this fails, what voters are doing, they're knocking another $124 million out of the FYI budgets. That's going to result in another 124 million in cuts or tax increases.
Sandy Bahr: The end of the run, as Kevin refers to it, is provided in the Arizona Constitution. It was set up by the drafters of the Arizona Constitution. Direct democracy is a good thing. It holds the legislature accountable. It helps us to be able to set priorities for programs that are important, whether it's conservation, education or health care.
Ted Simons: We have to stop it right there. A great discussion. Thank you both for joining us. We appreciate it.
Kevin McCarthy: Thank you.
Kevin McCarthy:AZ Tax Research Association;Sandy Bahr:Sierra Club, Grand Canyon Chapter;
