State politicians and experts are examining the potential effects of a $1 trillion national economic stimulus package that could bring up to $2.5 billion to the state of Arizona.
The U.S. House of Representatives’ version of the bill, which passed Wednesday, would allocate $1.3 billion to balancing Arizona’s budget. $585 million would go toward infrastructure projects such as the construction of roads and bridges, and $390 million would go toward K-12 education.
The bill must still go through the Senate, and is being debated on the floor this week.
Proponents of the package say it will create new jobs and help foster long-term growth in the state. Robbie Sherwood, a spokesman for U.S. Rep. Harry Mitchell, D-Arizona, estimated the package would create about 125,000 jobs in Arizona, most of them in construction and engineering.
“When you spend money like that, it’s not just the construction workers that benefit,” Sherwood said. “The people who may not have been getting a paycheck a couple of months ago start getting them again and spend that money in retail stores.”
Opponents say the package could come with provisions that would prevent the state from making funding cuts and plunge the budget deeper into debt in the long term.
State Sen. Bob Burns, R-Peoria, said the majority of the money coming in would be earmarked for certain programs, keeping state legislators from solving the budget deficit that Gov. Brewer has estimated will surpass $3 billion next year.
“The problem is we don’t know what kind of strings will be attached to [the stimulus money],” Burns said. “If they say [the money] has to be used for infrastructure, it won’t help us with fixing our budget.”
Rep. Kyrsten Sinema, D-Phoenix, said she is concerned the Republican majority in both houses of the state Legislature would turn down a “very significant” amount of federal funding.
“They’re talking about refusing to take portions of the funding,” Sinema said. “I can’t imagine not using every dollar of it.”
Burns said he would vote to turn down portions of the funding if they come with provisions that would keep legislators from making necessary spending cuts. The stimulus money will only last two years, but would increase state spending permanently and set Arizona up for another budget crisis, Burns said.
“You don’t use one-time money to continue spending levels above our revenue stream,” Burns said. “If all it does is maintain the spending levels beyond what we can afford, when the two years is up, we would be right back in deficit again.”
W. P. Carey School of Business economics lecturer Matthew Croucher said the spending cuts made by the state Legislature could offset the federal stimulus money. The package could help create jobs, but with state budget cuts currently eliminating jobs, it is difficult to measure the overall impact the stimulus would have.
“You have to remember that there is a state deficit that’s just been closed, and it’s going to take money out of the economy,” Croucher said. “You have to count [the effects of the stimulus] away against the potential closing of the state deficit.”
Reach the reporter at derek.quizon@asu.edu.
