The Fiscal Case against Statehood

Accounting for Statehood in New Mexico and Arizona

By (author) Stephanie D. Moussalli

Publication date:

15 March 2012

Length of book:

224 pages

Publisher

Lexington Books

ISBN-13: 9780739166994

New Mexico and Arizona joined the Union in 1912, despite the opposition from some of their residents. The Fiscal Case against Statehood examines the concerns of the people who lost the battle over statehood in the two territories. Moussalli examines their territorial and early state governments’ fiscal behavior and reveals that while their fears of steep increases in the cost of government were well-founded, statehood also significantly improved their governments’ accountability for their use of the public purse. She concludes that fiscal officials enabled statehood’s growth in government by improving the financial reports and processes.

Moussalli examines New Mexico’s and Arizona’s financial reports before and after statehood, and compares them to the state of Nevada’s reports as a control. Through detailed, systematic analysis, Moussalli reveals the fiscal costs and accountability gains of statehood for the residents of New Mexico and Arizona.

Acknowledgments
Introduction
Part I. The Money
Chapter 1. Statehood and Leviathan
Chapter 2. New Mexico’s Rocky Fiscal Road to Statehood
Chapter 3. Arizona’s Rocky Fiscal Road to Statehood
Chapter 4. The Statehood Gamble
Chapter 5. The Birth of Leviathan
Part II. The Books
Chapter 6. Accountability and Statehood
Chapter 7. The Talk: Management’s Discussion and Analysis
Chapter 8. Accountants at the Service of the State: Reforming Property Tax Administration
Chapter 9. Funds, Assets, Liabilities, Fiscal Years, and Report Timing
Chapter 10. Interfund Transfers, Federal Subsidies, Revenues and Expenditures, Tax Rates, and Budgets
Chapter 11. The Elements of Accountability
Chapter 12. Conclusion: Statehood and Accountability, Leviathan and Accountants
Appendix

Stephanie D. Moussalli's study of spending changes that occurred when the territories of New Mexico and Arizona became states in 1912 tests the 'Leviathan' model that predicts that with more independence under statehood their governments would increase their taxing and spending. . . Moussalli documents how Arizona and New Mexico after statehood increased their spending over and above what they lost in federal finding. . . . Interesting sidelights in Moussalli's study include how government funds were lost through bank failures, such as occurred during the depression of 1920-21.