#AZGOP Budget Has Flat Tax & Tax Breaks But Lacks Votes (video)

The House Appropriations Committee was debating the budget as I drove to the Capitol on Tuesday morning. The Republicans started the budget process by introducing the 11 bills that make up the coming fiscal year’s budget on Monday, May 24. Except for leaked documents and rumors, this was the first time the Democrats and the public were able to see the whole proposal (available here).

Rumors have been swirling around the Capitol for weeks about the massive tax cut — biggest ever in Arizona history — and the flat tax proposal that the Republicans were planning. The rumor mill also said they didn’t have the votes to pass it. Republicans need ALL of their members to get in line on the budget, since the flat tax and other shortcomings make their budget a non-starter with Democrats, who make up 48% of the Arizona Legislature.

The Republican’s extremist budget was crafted behind closed doors by handful of members. It includes $1.5 billion in tax cuts (primarily benefiting the wealthy) and the flat tax that Governor Doug Ducey and other Republicans have been promoting. Many bills that were dead this year or that died in other years also have been stuck into this bad budget — like privatized school transportationSTO expansion and LIHTC. Nearly every tax giveaway bill that was killed in the past five years is in this budget. It includes tax breaks for millionaires, billionaires,  “elite investors”, retired military brass, developers, and corporations.

flat taxThe Republican budget was obviously crafted to “comfort the comfortable and afflict the afflicted”. It DOES NOT include any money to increase teacher pay, to restore funding to maternal and child health, to tackle Adverse Childhood Experiences, to help grandparents take care of dependent grandchildren, to fully fund the Housing Trust Fund, and much more. The Republican budget ignores Arizona’s teacher shortage, our doctor shortage and our nursing shortage. What are they thinking? The budget does include millions of dollars in road projects, but there is no explanation how these specific roads were chosen for improvement. (Is there an infrastructure plan behind these projects or are these deals to buy member votes?)

The flat tax will trigger a massive, ongoing drain on state revenue that will starve the state government and the local governments. (The three budget blog posts below include many links to policy report and news stories about the budget.) This table above shows how much each city would lose if the Republican budget were to pass. To make up for lost shared revenue, cities and towns will have to raise sales tax or dramatically cut services. This will be particularly devastating to rural cities and towns. One rural city told a House member that they would have to raise their sales tax to 19% to make up for the lost shared revenue. You’ll note that Tucson would lose $21 million dollars under the Republican budget. The flat tax is a terrible idea; it’s only purpose is to give a massive tax break to the richest Arizonans (as it illustrated in the graphic from Rep. Mitzi Epstein above). Giving away money instead of investing it in the future is irresponsible.

To learn budget details — including what’s not included — check out these recent blog posts:

May 25: Republican Flat Tax Feeds Economic Inequality in #AZ (video)

May 26: #AZGOP Budget: $0 for Housing Trust Fund, Teacher Pay or Maternal & Child Health (video)

May 27: #AZHouse Adjourns with No Budget. Et Tu, #AZSenate? (video)

Luckily, some Arizona Republicans are feeling the heat from constituents on their horrible budget proposal. What do they expect when an extreme Libertarian agenda is presented to the media and the voters of a purple state? Of course, people will be outraged. Republicans have their tax cut blinders on. They are ignoring so many needs that could be funded with the money we now have.

This is the time for all of us to keep the pressure on to stop this budget — especially the flat tax. Flat taxes have been tried in other states, and the results have been disastrous. On May 26, the House adjourned until June 10 because the Republicans do not have all 31 of their members on the budget. The Senate followed suit and adjourned on May 27. (The Legislature could come back sooner with 24 hours notice.) This is historic! Stopping the budget process because Republicans are in disarray has not happened in years.

This is the time for all of us to tell them what we DO want in the budget. For people on RTS, the bill numbers are HB2891 through HB2901 (SB1819 through SB1829); the tax ominbus is HB2900 (SB1829). You can read the language of the bills at AZLeg.gov by searching for the bill numbers from the front page. See the JLBC spreadsheets of the May 24, 2021 budget and highlights here.

The Republican budget is an abomination. We have a few days to make sure it’s dead and to work for a more equitable plan that addresses the needs of Arizonans.

Stay tuned for more updates as we move through the budgeting process. We have to finish by June 30, 2021 or the government shuts down. You can watch my video updates on Facebook and YouTube. , in addition to this blog. Check out other 2021 video/blog updates from the Capitol, go here.

Here are three recent videos about the budget process this past week.