It is often said that there are three factors to take into consideration in any real estate deal - location, location, location.
Likewise, there are three critically important factors that need to have the highest priority in the state's short- and long-term budget considerations - jobs, jobs, jobs.
Elected leaders at every level of government must always remember that whatever they do - or fail to do - impacts people, the very people they are sworn to serve. And, sometimes what appears to be a good idea on the surface can have unintended and far-reaching negative consequences. Such could be the case with the proposed state budget.
I well understand Arizona's fiscal problems, and the need to balance the budget and to make government more efficient. Many very difficult decisions have been made and more are to come. But, I also understand that economist after economist has predicted that the recovery from this recession will be slow and difficult both for the country and state of Arizona.
The problem is the interrelated issues of high unemployment and weak consumer spending. They constitute an economic death spiral - unemployed people and people fearful of losing their job limit their spending. When consumers spend less, it forces business to lay off staff. That spiral is magnified by the multiplier effect. When a person is laid off, even a state or municipal employee, that person will spend less at Target and Costco and the mom-pop laundry and restaurant down the street. When big businesses lay off people, small ones may close their doors entirely.
According to a study by the Seidman Research Institute at Arizona State University's Carey School of Business, the Executive's proposed budget has a total of about a $1 billion in cuts to AHCCCS (Arizona Health Care Cost Containment System) and other parts of state government. This, in turn, will cause the loss of more than $1 billion in federal Medicaid funding, for a total impact of about $2.1 billion. The direct and indirect consequences of these cuts would cause the elimination of more than 46,000 jobs in Arizona - with more than half those losses in the private sector.
But, the impact is not limited to the 46,000 people who find themselves out of work. Arizona has lost nearly 300,000 jobs since August 2007. Since September 2009 our job growth has only been about 35,000. The current budget proposal wipes out that modest gain and puts us in a deeper hole for 2011 and pushes our unemployment rate to 11 percent.
I continue to applaud the governor for her efforts to reinvent the state's commerce apparatus. If successful, the state will take action to shape its economic destiny by boosting business, and creating a climate that attracts and rewards investment, sparks innovation and creates jobs. But, it is also incumbent on all the state's elected officials to expand a greater amount of energy and creative thought in determining how to retain existing jobs - in both private and public sectors.
There will be additional budget proposals offered and continued study and commentary by various external groups. But, foremost in the minds of all decision makers should be consideration of the lives and communities that will be impacted by their decisions.
State Rep. Bob Robson (R-Chandler) represents District 20, which includes AhwatukeeFoothills. Reach him at (602) 926-5549.