Crossover week– when hundreds of bad bills are pushed through both houses– is always difficult. In addition to four 12-hour days this past week, Democrats had the extra pressure of trying to stop the tax giveaway parade before it dances off the cliff with our state’s future.
I used to call these tax giveaways fiscally irresponsible, but with 18 tax breaks poised to pass the Arizona House and more coming our way from the Senate, we have crossed the line into insanity. Of the 18 tax giveaways, 11 have some cost estimate. Those 11 total close to $500,000 annually in new tax breaks starting next fiscal year; there are another 7 tax breaks with unknown costs. They’re not free; the Joint Legislative Budget Commission (JLBC) doesn’t know how to estimate their cost. You can read more detail about these bills these three articles here, here, and here. With so many unknowns, if they all pass, Arizona could be looking at $1 billion in new tax giveaways (AKA lost revenue) in next fiscal year or in the near future, since several of them automatically increase over time, and it takes a two-thirds majority to repeal any of them.
The most expensive bill is HB2732 (tax credit; affordable housing, AKA state-based LIHTC). It was negotiated down in cost from last years’ versions of this bill. I voted against this every year because I believe there are better and more cost effective ways to provide affordable housing– like restoring the Housing Trust Fund to the full $40 million annually (from a dedicated funding source), strengthening tenant landlord laws, fixing the eviction crisis, helping low-income seniors stay in their homes with property tax support, and ending tax breaks for luxury housing. There are other options besides tax credits to developers. In fact, if the Housing Trust Fund were fully restored and functioning, developers would get part of that action for building and rehabilitating properties. HB2732 starts at $8 million for year, but since $8 million is added each year, it balloons to $56 million in FY29 and FY30. Over the 14 years of the developer tax credit, this will cost an estimated $450 million.
Giving away potentially $1 billion annually in future revenue leaves us with little money to restore programs that were cut– like Temporary Assistance to Needy Families (TANF), childcare subsidies and tiered reimbursement, funding for caregivers for seniors and the developmentally disabled, public education, infrastructure… the list goes on. It also leaves us no flexibility to respond to disasters like wildfires or outbreaks like the COVID-19. (Our state doesn’t have enough masks or gloves for the Coronavirus, and we recently learned that Arizona received faulty diagnostic test kits in February. Tell me again why we are giving away $1 billion in future revenue. )
We are tying the hands of future Legislatures by creating so many new tax giveaways and scheduling automated increases. Arizona is #50 in Adverse Childhood Experiences and at the bottom in public education funding. We could make a significant investment to these two important issues if we dedicated even a fraction of that $1 billion per year for the next 10 years+ to these issues.
We don’t have a rosy economy and a budget surplus. We are throwing away future generations in order to fund ideologically driven tax breaks, primarily for corporations. It’s time to end corporate welfare and restore funding to programs that help the people of Arizona.
2 thoughts on “Is $1 Billion in New Tax Giveaways Too Much? (video)”
Comments are closed.