Arizona has more tax revenue than expected. How should they spend it? Perhaps they shouldn't. I've always wondered why local governments don't build up an endowment like universities. The ones that do well could eventually fund their activities without any taxes.
Each time a government runs a surplus they start thinking of how to spend it. What they’re forgetting is that it isn’t their money.
They collected more money than they needed. So how about giving it back?
The Canadian province of Alberta, in the 1970’s established the “Heritage Fund” which held a chunk of the oil/gas royalities paid to it by oil producers. Its intent was to help Alberta diversify its economy from oil, and provide some long term cushion in bad times. Its holding about 12 billion dollars now, and returns about 1.1 billion/year, with about 1/2 of that going back into general revenues. Find me a state/province that wouldnt die to have a non-tax source for 300-500 million / year.
http://www.finance.gov.ab.ca/business/ahstf/faqs.html