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"$4 per gallon gas prices are the primary reason why we are forecasting fewer travelers for the second holiday this summer," said AAA Arizona Public Affairs Manager Linda Gorman.

Despite the declines, the auto club says that a huge chunk of the U.S. population will travel next week. 

"In fact, we are predicting that 13 percent of the U.S. population and 15 percent of the population from the Western states will travel over the upcoming holiday weekend," said Gorman of AAA.

However, some choices are badder than others. And the baddest choice would be the one that is the most blatantly illegal, the so-called education rollover.

Here's the way the scheme works. The state doesn't pay school districts what it owes. School districts can still spend what they would have if the state hadn't been a deadbeat. They just have to borrow to do so.

This is illegal in one and arguably two ways.

In 2000, voters approved Proposition 301, a sales tax increase for education. Some feared that the Legislature would just use the new funds to replace old ones, and there wouldn't be a net increase to education.

So, a maintenance-of-effort clause was included, requiring the Legislature to continue funding primary and secondary education at the same level from other sources, with an annual inflation increase.

The state is on a cash-accounting system. So, if an expenditure isn't actually made in a particular year, it doesn't appear on that year's books. That's why the education rollover can be used to help create a state budget that appears balanced at least on paper.

However, the state cannot count the skipped payment as not made for purposes of balancing the budget but made for purposes of Proposition 301's maintenance-of-effort requirement. In business, people end up in the pokey for such stuff.

Defenders of the rollover say it's nothing new and not to worry. It was used to paper over deficits in the 1990s as well.

And it was. But that was before the passage of Proposition 301. In the 1990s, there was nothing that prevented the Legislature from reducing state aid to education if it so chose. Now there is.

So, stiffing the school districts clearly violates Proposition 301's maintenance-of-effort requirement. It also arguably violates the state constitution's debt limit as well.

The Legislature already used this trick to paper over the deficit in this year's budget, to the tune of $272 million. The initial Senate budget would add $330 million to paper over next year's deficit, for a total of over $600 million.

Now, the state unquestionably owes this money, particularly given Proposition 301's maintenance-of-effort requirement. And the state's debt limit is just $350,000.

The borrowing, however, will be done by the school districts. So, this is a back door way for the state to violate the debt limit clause.

Of course, both the initial Senate and House budgets proposed violating the debt limit clause through the front door as well. Both propose financing over $500 million in school construction.

Now, I happen to believe that financing school construction is sound fiscal policy. However, the founders clearly intended state government to be a pay-as-you-go enterprise.

If the state is going to violate the law to balance the budget, the most sensible law to violate would be the Voter Protection Act.

State revenues have basically stagnated. A two-year spending freeze, or a modest across-the-board rollback, would have been the easiest and arguably fairest way of managing the problem.

However, it would also be unconstitutional. In 1998, voters approved the Voter Protection Act, which basically says that what the electorate approves the Legislature cannot fiddle with. Since then, voters have approved the education sales tax with its maintenance-of-effort requirement and an increase in low-income health care services.

That exempts around 44 percent of the state budget from a freeze or a modest rollback. That makes an across-the-board rollback for the remaining 56 percent of the budget too severe to be politically acceptable. So, all the debt and accounting games.

Now, if the state ignored the Voter Protection Act and actually froze or cut education and health spending, the education and health lobbies would sue.

However, the state probably won't get sued for violating Proposition 301's maintenance-of-effort requirement. The school districts are the ones who should care, but they are content to manage the float to avoid real spending cuts.

The Goldwater Institute is making noises about suing over violations of the state's debt limit. But the courts have been playing wink-and-nod over that restriction, so a challenge will be an uphill climb.

As a matter of fiscal policy, the bad choices the Legislature is making among bad options aren't optimal. As a litigation strategy, however, they have more merit.

Nevertheless, superordinating litigation strategy over sound fiscal policy isn't much of a way to run a government.

(column for 6.27.08)

First, they argue that taxes aren't that important to state economic growth, so taxes can be ignored or even increased to support government spending. Then they say that the state has to provide tax incentives to get favored industries, such as biotech or solar, to come here.

So, taxes don't matter, except when they do.