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My Recent Comments
What Does the Crisis at Fukushima Daiichi Mean for Nuclear Power Generation in Arizona?
The disaster in Japan (which one expert labeled “a lot worse” than Three Mile Island but “much less” than Chernobyl) has re-ignited concerns in the U.S. about the safety of nuclear power and spawned a federal review of the 104 nuclear reactors across the country.
Those concerns extend to Arizona and the Palo Verde Nuclear Generating Station, about 50 miles west of Phoenix. Palo Verde has three of the nation’s 104 nuclear reactors, and is the nation’s largest power generator (of any kind, nuclear or other). The electricity Palo Verde generates is delivered to 4 million customers in Arizona, California, New Mexico, and Texas.
Clean and Safe Energy Coalition co-chair Christine Todd Whitman wrote in an op-ed that a ban on all future nuclear energy investments and a shutdown of currently-operating U.S. nuclear power plants would be “unwise” and “unrealistic.” Nuclear energy provides 20% of the nation’s power, and 70% of our carbon-free power – we can’t shut off that tap (and expect to replace the power supply) quickly.
But I think it’s important not to focus on that aspect right now, because it sounds like we’re sacrificing safety for necessity – and I don’t think that’s being done at all. Leave the “Where would we get our power without nuclear generation?” conversation for another day. Instead let’s focus on reassuring the understandably-uneasy American public about the safety of U.S. nuclear facilities – and proving to people what the companies running those plants are doing (differently today than last month) to keep them operating safely.
Apr 4, 2011
Last Friday Governor Brewer signed into law a $538 million tax cut package. In its coverage of the signing, the Arizona Republic included this caption with a photo of the Governor holding up the hefty-looking document: “Arizona Gov. Jan Brewer and the GOP majority in the Legislature say they're confident the state can cut taxes and still balance the budget.”
Sounds a bit circumspect to me, given the Arizona government’s inability to balance the budget in any of the last four years (despite the fact that it’s their constitutional duty). And when the cuts (which the Joint Legislative Budget Committee estimates will cost the state $538 million over the next 10 years) are phased-in together with the expiration of the temporary one-cent sales tax increase in 2013, the fiscal noose around state government’s neck will surely tighten.
Here’s a suggestion to the Arizona legislature and Governor Brewer: Step 1, get the fiscal house in order. That means balancing the budget. If you can do it with tax cuts, by all means have at it. (But I’m doubtful.) Step 2, think about the most cost-effective ways that you can foster the development of sustainable, productive industries in Arizona that employ lots of highly-paid workers over the long term, across business cycles. That’s the path to a more prosperous Arizona.
Feb 24, 2011
When Cutting $1 Actually Cuts $3 - The Economics of an AHCCCS Rollback
Even if President Obama okayed Arizona's plan to cut Medicaid coverage, and even if those cuts were not deemed an unconstitutional violation of Proposition 204, cutting AHCCCS the way the governor is proposing would still be a bad idea.
Consider the economic impact of AHCCCS cuts in the first year alone:
• Arizona employment would be approximately 30,000 lower relative to the baseline (no change in AHCCCS)
• Real Gross State Product (GSP) would be lower relative to the baseline by approximately $2.5 billion (2010$)
• Real disposable income would be lower relative to the baseline by approximately $1.35 billion (2010$)
• The Arizona population would be lower relative to the baseline by approximately 8,200
Now, there are some new alternatives. The Arizona Hospital and Healthcare Association (AzHHA) has proposed a $300 million assessment on the state's hospitals. They would get $100 million of that back from the state as payment for AHCCCS services and $200 million back from the federal government under the matching program. The plan would save the state $200 million, though it would still leave $340 of the $540 million that Brewer had proposed cutting.
The AzHHA proposal doesn't solve the problem, but it's a start. As the Arizona Daily Star put it, "it's a creative idea. We see too few of those."
Feb 9, 2011
On Wednesday I attended the 47th Annual Economic Forecast Luncheon presented by the Department of Economics at Arizona State University's W. P. Carey School of Business and JPMorgan Chase. Overall, I came away optimistic about next year. Not giddy, but optimistic.
Both economists who gave the national forecast were optimistic about growth next year (in the second half, at least): relatively slow 2-2.5 percent GDP growth through mid-2011then 3.5-5 percent GDP growth in the second half of 2011.
Professor Lee McPheters, who presented the forecast for the state economy, characterized his outlook as “slow growth ahead, but no double-dip recession.” Arizona is at the tail end of a long bottoming out, just set to embark on a recovery. Forecast is for the economy to add 47,800 new jobs next year and be back to pre-recession levels of employment by June 2013.
Local economist Elliott Pollack, ever the optimist (not really) characterized Arizona’s real estate outlook : “So many homes, so few new people…” He said, “We could face several more years of stress and there is no quick way out.” He predicts that the residential housing market will be back on solid footing (with supply equal to demand) in 2014. His forecast for commercial markets is similar: back to normal vacancy levels in 2014 or 2015 (perhaps a bit earlier for industrial buildings).
Dec 3, 2010