Feathered Bastard

Russell Pearce's Lame Attempts to Rehabilitate His Image, Part I

With the November 8 recall election advancing on him like an out-of-control semi, state Senate President Russell Pearce is attempting to morph himself into an honorable man, a practical politician and rehabilitator of Arizona's economic fortunes, all in a lame attempt to spare himself from the wrath of the voters.

This desperate propaganda project extends to letters, rewritten bios, shills trumpeting his "accomplishments," and so forth. And since rebutting these various canards takes a little time, I hereby inaugurate an ongoing series doing just that, taking them all on, one by one.

The first I will address is this ridiculous press release just sent out on Pearce's behalf by the Senate Republican staff. In it, Pearce claims that a surprise bump in state revenues is directly attributable to the fictional "balanced budget" enacted by the Republican Legislature. 

True, the Joint Legislative Budget Committee has recently reported that general fund revenues are up over this time last year. And, of course, Pearce wants to take credit for this. So the press release reads as follows:

"The State is really starting to see an economic comeback.The Legislature started the session in January with a $1.2 billion deficit. Republican leadership made the tough decisions to trim spending, without gimmicks and more borrowing. We're seeing the results of those smart decisions now," says Senate President Russell Pearce.

As a result of those cuts made by Leadership, the $1.2 billion deficit was eliminated for the fiscal year, and Arizona is in the black with a surplus of about $30 million. With increased revenues and lowered spending, our focus now is getting Arizonans back to work and maintaining a balanced budget. Education and public safety will remain our top priorities.

Education a "top priority"? Puh-lease. This year alone the state legislature cut $148 million from K-12 spending, minus federal stimulus funds. Top priority, my caboose.

Also, the budget the Republicans passed was full of gimmicks: fund transfers, a tax amnesty, reducing payments on bonds, deferred payments, yadda-yadda-yadda.

Indeed, the budget carried over a $332 million shortfall to FY 2012. But that shortfall has been knocked out by the unexpected rise in revenue. 

Unfortunately, the bump is a one time deal. The JLBC itself notes in its July report that,

"The primary reason for the revenue overage is the unexpectedly high 18.5 increase in individual income taxes. Given the lack of job and wage growth, this spurt may have been caused by higher capital gains and the loss of mortgage interest deductions."

Why has there been a loss of mortgage interest deductions? The "downturn in the state's real estate market" and a "decline in mortgage interest." 

The JLBC's July report further states that,

"The FY 2011 rebound appears to be more a reflection of one-time factors than a rapidly expanding economy. It may still take 2 to 4 years before the state replaces the jobs lost in the recession and substantially reduces its `underwater' mortgages."

Translation: Despite some extra cash in the kitty, the economy still bites, and will continue to bite for another "2 to 4 years."

In the JLBC's August report, it summarizes the "good news" thus,

"In the July MFH, JLBC Staff estimated that higher than expected FY 2011 revenue collections would eliminate at least $300 million of the $(332) million shortfall assumed by the FY 2011 revisions enacted in April. Since that time, the state has finished the `13th month,' a time period where the state continues to record FY 2011 revenues and spending obligations.

"After making these year-end adjustments, FY 2011 revenues were $8.39 billion compared to FY 2011 spending of $8.36 billion. This would leave the state with an approximate ending balance of $29 million. 

"However, it is important to note that it will take several months to confirm the year-end adjustments and calculate the state's official fiscal year ending balance."  

The increase in revenue has zip to do with Pearce or the Republicans. In fact, Pearce contradicts himself in his own press release with the following passage:

"Though the economy is improving, caution is warranted. Arizona continues to carry a tremendous amount of debt incurred during previous years of out-of-control spending and reckless gimmicks.  

"One of these gimmicks was selling the buildings at the State Capital [sic] in order to continue unjustified spending. The State no longer owns the buildings in which state legislators work and we have accumulated nearly $1 billion in building debt. `This is unconscionable,' says the Senate President."

And who, oh who, sold the state Capitol? The Republicans. Governor Jan Brewer signed off on  the boondoggle in which the buildings are "sold" for twenty years while the state leases the property back. 

In fact, Pearce voted yes on the sale/leaseback proposal in 2009 as part of House Bill 2010. You can see his vote, here. That sale scored a $735.4 million payment to the state.

To be fair, Pearce voted against a second sale/leaseback plan in 2010, one worth $300 million the state. But the one selling the Capitol buildings? He voted for that humdinger.

I should also point out that before he became Senate President, Pearce was chair of the Senate Appropriations Committee, and when he was in the other chamber, chair of the House Appropriations Committee.

So those "previous years of out-of-control spending and reckless gimmicks" were overseen by a Republican legislature, with Russell Pearce at the fiscal helm.

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Stephen is a former staff writer and columnist at Phoenix New Times.
Contact: Stephen Lemons