Yesterday at the Annual Economic Outlook Luncheon three experts offered their predictions for the next year in Arizona.
Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at ASU, said that economists had hoped to find some rays of sunshine in the housing market but instead found an “unpleasant surprise” -- that new home construction wasn’t as strong in 2009 as they had hoped.
But things will get better. This year, McPheters predicts that 17,800 new single family homes will be constructed in Arizona -- a 40% increase over last year. In 2011, the prediction is for 28,480 new homes -- a 60% increase. McPheters said to expect the Arizona housing market to really recover its strength in 2012 or 2013.
John Arnold, director of the Governor’s Office of Strategic Planning and Budgeting, spoke about the current and proposed state budgets, basically offering a “really bad” and “really, really, really bad” options.
He outlined the cuts that the current budget already includes - like reducing funding for education to 2004 levels, even though there are now 121,500 additional K-12 students and 18,100 new university students.
That would have included booting 310,500 low-income adults and 46,000 kids off the state’s Medicaid programs, but the new federal healthcare reform prevents the state from implementing those cuts. Because of that, even with the deep cuts proposed, even with the sales tax increase, the state’s budget still won’t be balanced.
But the situation will be even worse if voters don’t pass Proposition 100, the 1-cent sales tax increase, on May 18. If Prop 100 fails, the state will cut $428 million more from K-12 education (bringing funding back to 2001 levels), $120 million in cuts to higher ed (an amount roughly equal to all of the funding that NAU alone used to get), $100 million in cuts to public safety, $175 million in health care cuts, and $25 million in cuts to human services.
The budget situation, however you dice it, is really scary; Arnold made that crystal clear. You can read the Knowledge@W. P. Carey article about it, listen to his talk, and view his slides here.
I wrote about the topic before, but I think it’s really important to not cut the heart out of the state. I’m as much for low taxes as anyone, but I want Arizona to be the kind of place where people want to live (hey, my livelihood depends on it). Who will want to live here if we can’t provide a decent education for our kids or healthcare for families making less than $10,000 a year? I wouldn’t.
What do you think?
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