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Let the Sessions (and the Spending) Begin!

All eight states of the American Southwest are, or will soon be, in session. Will legislators return budget surpluses to inflation-battered taxpayers, or launch spend-a-thons?

Today, New Mexico and Utah commenced their legislative sessions, joining already-underway California, Texas, Colorado and Arizona. Nevada and Oklahoma are scheduled to kick things off on February 6, putting all eight states of the American Southwest in session.

Mark Twain, as usual, had it right: “No man’s life, liberty, or property are safe while the legislature is in session.” So the SPPI will be monitoring the capitol-complex shenanigans, offering our analysis on lawmaking that impacts everything from regulations to energy, healthcare to corporate welfare.

But as is usually the case, the big issue — in every state — will be money. Carson City, Phoenix, Santa Fe, Austin, Oklahoma City, Denver, and Salt Lake City are in the black. Sacramento, not so much. On Friday, legislative analysts in the Golden State warned that “there is ‘a good chance’ that California revenues will come in lower than Gov. Gavin Newsom has projected,” and criticized the chief executive “for attempting to fill the state‚Äôs projected $22.5 billion budget hole, in part, by deferring $7.1 billion of funding to later years when the state will likely still be dealing with budget shortfalls.”

There several reasons why California’s fiscal woes are self-inflicted, but no culprit is more to blame than an unwillingness to control spending. The best way to measure the size of government in the states is to include both state and local “public” expenditures. (Lumping all the costs together is necessary, because “services” are provided at different levels in different states.) As the chart below indicates, in the region, per capita, California’s $16,303 is in a class by itself.

Yes, California’s cost of living is high. But it’s not 48 percent higher than Utah’s. Neither is it 78 percent higher than Arizona’s.

Oklahoma stands out for its parsimony, while low-cost New Mexico, ranking second to California, is notable for its irresponsibility. (Given its abysmal socioeconomic conditions, the Land of Enchantment is the poster child for the failure of “public investments” to produce wealth and health.)

With inflation soaring “in 2022 to a level unseen in four decades,” one of the best things lawmakers outside California can do with their surpluses is enact meaningful tax relief. Beyond the basic issue of fairness, smart tax policy is a powerful economic-development tool.

No matter what, the SPPI will be on guard, monitoring the good, bad, and ugly of the legislative sessions, and providing our perspectives on sound public policy in the American Southwest. Stay tuned.

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