Representing YOU in the Budget
I take seriously my job to represent you in the legislature, and to communicate back what’s happening at the Capitol. Unfortunately, Republicans have completely excluded Democrats in creating a partisan budget for our state (though we represent almost half the voters). The centerpiece is a flat tax plan that would give a PERMANENT $1.5 billion annual cut mainly benefitting the wealthiest Arizonans while neglecting our promise of opportunity and a thriving economy for everyone. Based on what I’m learning from you and many stakeholders, here are the 4 reasons I oppose the flat tax.
#1: It would give 91% of tax cuts to people in the top 20% of incomes. Earlier this week the non-partisan Joint Legislative Budget Committee (JLBC) released a chart showing the impact of Gov Ducey’s proposed flat tax on Arizonans. It reveals that 1.75 million AZ households – including 49% of those in our district would see only about $40 per year savings in state taxes. That equates to about a tank of gas these days. The real winners of this flat tax proposal would be the 1,019 Arizona taxpayers who make $5 million or more each year who would see a tax cut of $350,303.
#2: Working families ALREADY pay more than their fair share in taxes. Everyone should pay their fair share, but Arizona taxpayers with the lowest incomes already pay the highest percentage of their income in taxes. As you can see in this chart, those in the lowest 20% of income pay 13%, while those in the top 1% pay only 5.9% of their income in total taxes (income, property, and sales). While we often hear complaints about the 3.5% Prop 208 surcharge that the wealthiest Arizonans will now pay, the rest of the story is that they pay that surcharge only on TAXABLE income (after many possible deductions) OVER $500,000. The fact is that only 3% of Arizona small businesses will be impacted by the Prop 208 surcharge.
#3: The flat tax could severely cut our police & fire departments. Because the state has a revenue sharing deal with cities, the Arizona’s $1.5 BILLION cuts would result in enormous losses in local revenue for cities across the state as well. The median impact to city/town budgets was 6.4% with the largest impact being 13% Ongoing losses to local budgets of 3.5%-13% is extremely challenging, especially when those are on-going cuts. Mayor Kate Gallego recently shared with me that 70% of Phoenix’ budget goes to public safety. These cuts would devastate their ability to keep us all safe, as well as to maintain our roads and other city services.The impact is even worse for towns in rural Arizona. Even if the state agrees to temporarily reduce those losses to cities, it will be increasingly difficult for our state as well as cities across Arizona to provide the services that keep us all safe and growing.
#4: This HUGE, PERMANENT tax cut will handcuff future legislatures long after Gov Ducey is gone, leaving us unable to live within our means. While some claim that this tax cut would spur economic growth, the fact is that Arizona has cut taxes every year since 1990, resulting in $4.4 billion less in annual state revenue already, and the economic benefit has not trickled down to middle and working class families. In fact, the disparity between the wealthy and middle class has only widened – and we’re already unable to meet our promises as a state.
As a result of year after year of tax cuts,
- Arizona ranks 49th in the nation in per pupil spending, and has among the lowest teacher pay in the country, even after the 20 by 2020 raises . That has led to an extreme teacher shortage, leaving children in over 1800 classrooms with no permanent, qualified teacher.
- Auditors indicate our Department of Developmental Disabilities alone needs an additional $150 million EVERY YEAR to provide essential services for Arizonans. This budget provides only $30 million – for just THIS year, of course.
- Roads and infrastructure across Arizona need immediate repairs. A number of road fixes are in this budget, but in other areas of the state, especially on native lands, roads are un-navigable in rainy seasons, keeping students and emergency vehicles from schools, home, or hospitals. No funds are provided for those roads in this budget
- The Housing Trust Fund, an effective tool for keeping those just a paycheck away from eviction from falling into homelessness needs to be restored. I’m appalled to see $0 additional funding this year, especially at at time when so many families have been devastated by the pandemic and rents and housing prices are through the roof.
- Arizona invests very little in the community colleges and state universities we depend on to prepare the strong, educated workforce we need for a thriving economy. New business people don’t grow on trees – they grow in our schools, and THAT’s where we need to invest if we truly want to grow our economy.
- Not enough state employees have had a raise in the past 10 years, making it difficult to attract and keep talent and expertise.
- Arizona still faces considerable debt we should be paying off.
- Our state faces a critical water shortage that needs attention at an as-yet unknown cost.
In 1992, voter-approved Prop 108 enacted a constitutional amendment that requires a 2/3 vote of the legislature to increase or add new taxes, thereby making any tax cut essentially permanent. As Director of Children’s Action Alliance David Lujan as well as former Governor Jan Brewer both wrote recently, these deep and permanent tax cuts are short sighted and could decimate our ability to live within our means. I believe it’s especially dangerous to make permanent tax cuts at a time when so much of our one-time excess revenue is connected to federal pandemic relief, and we don’t know what lies ahead.
The one task required of your legislature is to create a budget. However, because many representatives and senators are NOT on board with these devastating tax cuts, leadership has announced that we will not return to the Capitol to vote on a budget until June 10. In the meantime, Republican leaders in the House and Senate, as well as Governor Ducey are busy twisting arms.
We need YOU to help stop these dangerous cuts. Call the Governor’s office and the leadership of both the House and the Senate and make your voice heard. Ask them to create a bipartisan budget that invests in our communities, pays down state debt, and includes a more reasonably-sized tax cut.
Governor Ducey: 602-542-4331
Senate President Karen Fann: 602-926-5874
House Speaker Rusty Bowers: 602-926-3128
As always, please contact me if you have questions or concerns. Thank you for your support!