Today’s video is about HB2409, small business investment tax credit extension. This is also known as the Angel Investor Tax Credit. In the big scheme of tax giveaways in the state of Arizona, this one is sort of small potatoes dollar wise, but I still have issues. It is an extension if $2.5 million per year tax credit for 10 years. The angel tax credits are for “qualified investors,” people who are licensed, trained, and smart enough to play the stock market and make otherwise risky investments wisely because of their expertise. ￼[My layman’s definition.] ￼
I have attended several Bioscience Roadmap events where they showcase research and new discoveries from the universities that are … just …about… ready for market. What they need is venture capital to get the new drug discovery or the next medical device from our universities to production to market.
I am very familiar with this topic because ever since I started my own small business in 1986, I have been writing about or working in public health and medical research. In fact, the first Bioscience Roadmap event that I attended featured Dr. Gene Gerner, Dr. ￼Tom Grogan and the story of how their research at the Arizona Cancer Center blossomed into huge NCI research grants, new drugs, and successful UA spinoff businesses. I knew them, wrote about their research, and photographed them when I worked in the communication office at the cancer center.￼
My point is that I value scientific research and believe that research jobs (and related jobs that come with big grants) are some of the best jobs in our state. One of the reasons that I don’t support the angel investment tax credit is that I found out that only 30% of the funds go to businesses that spinoff from our research universities.￼ Also, there is a $10 million ceiling to qualify as a “small start-up business” (who is eligible to receive funds from angel investors). If your business has $9 million in assets, is it really as “small business start-up”? ￼
Continue reading More Transparency in Commerce Authority Tax Giveaway Deals Is Needed (video)
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.
Continue reading Is $1 Billion in New Tax Giveaways Too Much? (video)
The sheer volume of tax credits, tax cuts, tax shifts, and miscellaneous tax giveaways in this Legislative session is mind boggling. Will the Arizona House pass one billion dollars in tax giveaways in 2020? It could happen. To say that this behavior is fiscally irresponsible is a gross understatement.
The House Ways and Means Committee has passed 18 tax giveaways in 2020, and those bills are now hitting the House floor for debate and votes. Six of the 18 already have passed the House: HB2355, HB2356, HB2293, HB2732, HB2778, and HB2779. (See descriptions below.) These six will eliminate hundreds of millions of dollars in future revenue from the General Fund, and there are 12 more tax giveaways to be voted on. As noted in previous blog posts, these tax giveaways primarily benefit large corporations– like Microsoft, APS, TEP, SRP, SW Gas– specific business groups or industries, and wealthy Arizonans.
It is often said that a budget is a moral document. In our state budget, the Legislature supports corporations and wealthy Arizonans with never-ending, multi-year tax giveaways, that often have inflation adjusters. Arizona wouldn’t have an affordable housing problem, crumbling infrastructure, and grossly underfunded education system if the Legislature had long-term plans and multi-year, inflation-adjusted budgets to address those problems. Instead, programs and services that benefit the people of Arizona are lucky to get one-time funding and beg for more each year (or pass citizens initiatives). We don’t have a budget surplus; we have chronically underfunded programs.
Continue reading What Is the Cost? 18 Tax Giveaways Pass #AZ House Ways & Means (video)
There are multiple reasons why Arizona has an affordable housing crisis. Chronically low wages; years of under-funding social safety net programs; high student loan, credit card or medical debt; and aggressive evictions have forced far too many Arizonans to live with housing insecurity.
Wages in Arizona are 85% of the national average. Only 6% of Arizonans who are eligible for Temporary Assistance for Needy Families (TANF) actually get it. In Pima County, the eviction rate is 30 per day– that’s roughly 1000 per month.
To use a medical analogy, HB2732 (affordable house tax credits) treats the symptoms of the affordable housing crisis– not the disease. The disease is poverty.
Continue reading #AZLeg: Look Beyond Tax Credits & Take Comprehensive Approach to Housing (video)
Arizona Republicans are on the attack in 2020. We have heard anti-woman, anti-LGBTQ, anti-voter, and anti-immigrant legislation so far, and now to round out the set– we have anti-union legislation. Today’s featured bad bill is HB2872 proposed by Majority Leader Warren Petersen. It is an anti-union model bill from the American Legislative Exchange Council (ALEC).
Unions are private organizations, and this bill puts unnecessary, burdensome regulation and reporting requirements on unions that are not required of any other businesses. In fact, when I read HB2872, I thought, “Gosh, I would love to have this level of cost-benefit analysis reporting from my private insurance company regarding their profits and losses, salaries, and how much they actually spend on my care, compared to how much I pay.￼” But they aren’t required to do that.
HB2872 is national, model legislation that is duplicative and unnecessary because the reporting is already required by the federal government, and it is published online– for everyone to see. So, why is this bill necessary?
Continue reading With #HB2872, #AZGOP Uses #ALEC Legislation to Attack Labor Unions (video)
Several times during the tax cut debates on Wednesday, Feb. 11, in the House Ways and Means Committee, Chairman Ben Toma and other Republicans repeated the mantra that Arizona has a “budget surplus”. The only reason that we have funds that have not been allocated is because we have had decades of budget cuts and chronic underfunding of important programs like public education(!), the Housing Trust Fund, Temporary Assistance to Needy Families (TANF), and so forth. It’s not that there is no need in our state, and, so therefore, we have extra cash. We don’t have extra money.
Also, several times during the committee meeting, I reminded everybody that Arizona is worst in the nation for Adverse Childhood Experiences (ACEs). We are not only shortchanging our school children by underfunding education, we are shortchanging small children before they ever get to school. It is highly ironic that Arizona is the country’s #1 “pro-life” state and also #50 in ACEs, due to our stingy policies and poor treatment of￼￼ our children.
In my study of gaps and inequities in maternal and child health in Arizona, I took a comprehensive approach and looked through the lens of the social determinants of health. Two contributing factors to Adverse Childhood Experiences are housing insecurity and food insecurity.
Continue reading How Can the #1 ‘Pro-Life’ State Be #50 in Child Wellbeing? (video)
Specialty license plates. Ugh. Arizona has too many.
Those of you who have been following me for a while know that I have been against specialty license plates since my first term in the Arizona House in 2017.￼ Specialty license plates are a way for legislators to funnel money into pet projects or favorite charities. The gift clause prohibits us from doing this, but these license plates pass routinely on bipartisan votes with a wink and a nod. I have heard legislators shout out on the floor, “This is for XYZ charity please vote yes!￼”
Up until today all of these specialty license plates have passed, even though many of us on both sides of the aisle are fed up with them. Bipartisan votes have given Arizona more than 60 specialty license plates. Many years ago, specialty plates were a lame way to fund state departments. For full disclosure, one of our cars has the Arizona Highways plate, one of the originals. Several different plates fund different veterans services. All of the universities and colleges (public and private) have plates. Nonprofit foundations affiliated with for-profit corporations have plates. Cathi Herrod’s Center for Arizona Policy has a specialty plate. Is this any way to run a government? Should goverment fees go to pet causes?
The Arizona Department of Transportation warned the Legislature a few years ago that they would have to reprogram their license plate database if the Legislature went over 60 plates, and, of course, we cavalierly did. During debate a few years ago, Rep. T.J. Shope said 60 plates was nothing compared to Maryland and Texas who have around 400 specialty plates each. That’s crazy– not to mention the difficulties for law enforcement or the questions about where the money is going. (For the record, Arizona’s goal should not be to be as crazy as Texas.)
Continue reading Two #GOP License Plate Bills Killed in #AZHouse, One Rises from Dead as Zombie (video)
All 12 tax giveaways or revenue reductions heard in the House Ways and Means Committee in the past three weeks passed– many on bipartisan votes. For the record, I was the only person who voted “no” on all of the tax giveaways.
To be clear, none of these tax reductions do anything to: increase education funding, increase access to healthcare, increase prenatal care, reduce adverse birth outcomes, reduce Adverse Childhood Experiences, reduce student debt, increase wages, foster workforce development, reduce poverty, or provide food and housing security for Arizonans. If you are not Microsoft, APS, TEP, SRP, SW Gas, qualified investors, resort owners, developers, contractors, or just rich people, you are not getting a tax break from the Republican Party.
In fact, to pay for education, the Republican Party wants to raise your sales tax while lowering taxes for corporations and elites.￼ Do you want to pay 10 or 11% of sales tax on every purchase? If you don’t, just say no to tax breaks for Microsoft, APS, SRP, TEP, SW Gas, and the richest Arizonans.
- Many of these tax breaks increase over time.
- Most of them have no sunset date.
- Most of them have no cost estimate.
- None of them have clear economic impact or job creation numbers– beyond the nebulous trickledown economics figures normally given by the Arizona Commerce Authority.
- None of them have clear performance measures.
- It takes 2/3 vote to get rid of them.
- No one has done the math on the total cost of all of them on an annual basis going forward.
We are creating a giant revenue hole in the future. This is fiscal irresponsibility.
Continue reading #AZLeg UPDATE: 12 Tax Giveaways Pass House W&M Committee in 3 Weeks (video)
How can a “pro-life” state be #50 for Adverse Childhood Experiences? Because the Arizona Legislature prioritizes corporate welfare over child welfare. It’s that simple.
The House Ways and Means Committee has passed six tax breaks in the past two weeks. Tomorrow’s agenda has 12 bills, including eight additional bills that are tax breaks or other means to reduce revenue. The Microsoft tax break (HB2771) that I warned you about a few weeks ago in on the agenda.
Ways and Means has passed six tax cuts so far in 2020. Has anyone done the math to determine the future annual hit if all of these tax breaks are passed. Probably not. We don’t have any JLBC costs estimates for some of them, and several are structured to automatically increase over time. The Tea Party– under Governor Jan Brewer, Senate President Russell Pearce, and several Legislators who are still in office– passed massive annual decreases in corporate income taxes, the results of which have been felt in the classrooms. When she left office, Brewer suggested that they may have gone overboard with the tax cuts. When Governor Dough Ducey took over, he said real men aren’t afraid to cuts taxes and has continued to cut, cut, cut. Let’s stop cutting and start investing. We have hundreds of millions of dollars in extra funds this year. Don’t let them give it away like they did last year.
Just to be clear– none of these 14 tax reductions would do anything to directly help public education, access to healthcare, reduction in poverty, workforce development or infrastructure. They are all about cutting taxes or giving tax credits to business.
Here are the bills that could reduce general fund revenue in the queue for Feb. 12. If you want the Legislature to invest in education, healthcare, and infrastructure– the People’s To Do List– instead of the corporate wish list, please voice your opinion on Request to Speak (RTS) or by phone or email to your Legislators (regardless of party).
Continue reading Tax Cuts R Us: Third Round of Massive Tax Cuts in House Ways & Means (video)
The alternative headline for this blog post could be: Are eight tax cuts in two weeks too many? I think so.
Last week, I said that the State of Arizona should change its motto from Ditat Deus (God Enriches) to Tax Cuts R Us.
Looking at this Wednesday’s Ways and Means Committee agenda with￼ four more tax giveaways on it, I stand by my assertion. Eight tax cuts in two weeks? That is fiscally irresponsible.
Today’s video is about HB 2732 (tax credits; affordable housing), but HB2404 (prime contracting; exemptions; certificates), HB2409 (small business investment credit; extension), and HB2629 (TPT; exemption; pacemakers) are also on the agenda. (On the pacemakers, the Dems are wondering why those aren’t already sales tax exempt, since they are medical devices.)
For the last few years, the Legislature has considered (but not passed) tax credits for developers who agree to build affordable housing. I have voted against this every year because there are better ways to make sure that people can afford a place to live– like paying a living wages, fully funding the Housing Trust Fund, and eliminating tax giveaways for luxury apartments.
HB 2732 is a bit less generous with the developers than previous versions of this bill, but this bill still takes millions from the general fund over the next ~20 years. This tax credit is capped at $8 million a year for 10 years. If we pass this, the first year cost would be $8 million, $16 million the second year, $24 million the third year, and up from there to $80 million in year 10.￼￼ The question is, will we be able to afford $80 million out of the general fund in 2031?￼ (After all, the Republicans have proposed eight tax cuts in the past two weeks! Is there plan to break the bank on the general fund? Their proposals are fiscally irresponsible.)
Continue reading What’s on the #AZHouse Ways & Means Agenda? More Tax Cuts! (video)