Report: Ariz. fiscal crisis cannot be solved by cuts alone

January 5, 2011

Arizona is struggling with two related but distinct fiscal disasters, as thoroughly documented and explained in "Structurally Unbalanced: Cyclical and Structural Deficits in Arizona," a report released by the Morrison Institute for Public Policy and Brookings Mountain West.

Widely recognized is Arizona's budget crisis, which resulted from the sudden collapse of annual revenues after the real estate crash and prolonged recession. Less noted or widely understood is the state's massive structural imbalance, which arose in large part due to unwise policy choices made during phenomenal growth years. Such imbalance is not cyclical and threatens Arizona's long-term future and its ability to compete during an economic recovery, according to the report, which is posted at" target="_blank">

When the structural deficit of $2.1 billion is factored in, Arizona in fiscal year 2011 faces a $3.4 billion deficit – a mammoth of 21 percent of stable expenditures. That's the largest estimated percentage structural deficit among Mountain West peers, with the total equaling state spending on the university/board of regents system along with all state spending on protection and safety.

"The budget gaps in AZ cannot be realistically resolved by spending cuts alone without creating extraordinary hardship for residents. A balanced approach that uses a mix of spending cuts and tax increases, and focuses on the long-term economic development needs of the state would be a superior solution," said Matthew N. Murray, the report's chief author and professor of economics and associate director of the Center for Business & Economic Research at the University of Tennessee.

The briefing will be distributed at the State of Our State Conference, conducted by Morrison Institute, Jan. 7, in downtown Phoenix.

"The impetus of the Arizona report, which is part of a larger four-state report on fiscal crises in the Mountain West region, is to raise awareness about the often hidden component of Arizona's budgetary challenge," said Susan Clark-Johnson, executive director of Morrison Institute, an ASU resource. "In turn, it is hoped the dialogue will move from 'cuts alone' to a more sustainable solution with input from all Arizonans. With this report and conference, our goal is to educate and hopefully engage all Arizonans in the critical decisions that lie ahead."

Media contact:
Joseph Garcia
Morrison Institute for Public Policy
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Britt Lewis

Communications Specialist, ASU Library

Air Force honors service of ASU professor

January 6, 2011

The U.S. Air Force recently bestowed its highest award for civilians on Arizona State University engineering professor Werner Dahm.

Dahm served as chief scientist for the Air Force from October 2008 to September 2010. His work in that role earned him the Decoration for Exceptional Civilian Service.

The award proclamation cited Dahm for “visionary leadership, superb organizational skills, and unsurpassed technical brilliance in conceiving, designing, and executing a year-long study of the long-term implications of science and technology for the United States Air Force.”

Working with a team of some of the nation’s foremost scientists and technologists, Dahm authored the “Technology Horizons” document that will guide Air Force science and technology objectives over the next two decades.

He collaborated with military leadership to begin work at the Air Force Research Laboratory toward meeting goals set forth in “Technology Horizons” plan.

Dahm is an ASU Foundation Professor of mechanical and aerospace engineering in the School for the Engineering of Matter, Transport and Energy, one of ASU’s Ira A. Fulton Schools of Engineering.

He is leading an effort to establish a security and defense science institute at ASU that will focus on finding solutions to national and global security challenges.

Drawing on the expertise of ASU researchers in a variety of fields, the university-wide institute will address issues related to national defense, homeland security, border security, counterterrorism, cybercrime and related areas.

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Joe Kullman

Science writer, Ira A. Fulton Schools of Engineering