The House Ways and Means Committee passed HB2522 today. This is the revenue-neutral tax conformity bill, which would give the richest Arizonans a tax cut.
The Democrats stood strong and said that we should not give a tax cut when there are so many needs in our country. Also we must look at investment for the future rather than giving away money today. Our rainy day fund is underfunded. If Wall Street crashes the economy again, Arizona will face more devastating cuts, when we haven’t recovered fully from the last cuts.
This bill and the mirror bill SB 1143 need a 2/3 majority due to the emergency enactment clause, since we waited until the last minute to act on tax conformity. It will be difficult to get these out of the Senate or the House. Democrats need to stand strong on this.
Tax conformity with the Trump tax plan which was passed by Congress in December 2017 has been loping along in the Arizona Legislature … until today. This morning, the former Speaker and current Senator JD Mesnard did a presentation on what he wants us to pass for tax conformity. He has been quoted in the newspaper as saying that he wants tax conformity to be “revenue neutral”.
If Arizona decides to do full tax conformity, as Governor Ducey has suggested, Arizona will gain an estimated $150-$200 million per year extra for the general fund. If we do revenue neutral tax conformity as Mesnard has suggested, we will throw that extra $150-200 million revenue out the window by offering tax cuts along with tax conformity.
The December 2017 Trump tax plan raised the standard deduction and eliminated some itemized deductions. If you make less than a six-figure salary and you don’t itemize your taxes, you will be better off with tax conformity.
In order to ram these bills through the committees, the Senate Finance Committee and the House Ways and Means Committee have been rescheduled for Monday, January 28 at 10 AM. This is not the regular meeting time. We are required to vote on HB2522 and SB1143 simultaneously.
These bills were placed on agendas late today. If you are on Request to Speak (RTS), you have until Monday morning to voice your opinion. If you believe that Arizona should say “NO!” to more tax cuts and should use the money to cover state needs (or prop up the rainy day fund in the event of a Wall Street downturn), you want clean tax conformity— NOT revenue-neutral tax conformity as HB2522 and SB1143 propose. All hands on deck.
Unlike many years, the Arizona Legislature will have money to spend when it convenes the 54th Legislative Session on opening day, January 14, 2019. We have an unexpected $900 million in one-time funding due to unexpectedly high sales tax returns and personal income tax returns.(Gosh, could the minimum wage have played a role in this?) We also have $200 million in the structural budget (money that should be available for three years).In addition, there’s tax conformity and review of the tax giveaways.
#RedForEd lifted the veil from our eyes and put the issue of corporate tax giveaways front and center in the fight to restore public education funding in Arizona.
As many of you are aware, the Arizona Legislature is giving away more than $13 billion in taxes every year and using only $10 billion to run the state. It is not sound fiscal policy to use accounting gimmicks and 50 fund transfers to “balance” the budget. It is no surprise that the state owes K-12 education around $1 billion. Thanks to scheduled corporate tax cuts passed by the Tea Party*, beginning in 2011, Arizona’s corporations got to keep an extra $1 billion in 2017. These corporate tax cuts continue through 2019, even though we can’t afford them.
As a result of the anger and frustration that many Tucsonans feel about the Arizona Legislature’s performance, the Stop Thief! Let’s Restore Fair Taxes Community Forum drew a standing room only crowd of diverse participants. The event was hosted by the Pima Area Labor Federation (PALF) and Progressive Democrats of America (PDA Tucson), with support from many other unions and community groups.
Heart-felt testimonies from current high school students, who explained how school budget cuts have impacted their lives and their schools, opened the forum.
LD9 Rep. Randy Friese gave a detailed presentation on tax revenue and how it has been siphoned off by special interest groups and corporate tax cuts for decades. (Video after the jump.)
My talk focused on specific tax giveaway votes in the 53rd Legislature. focused specific tax giveaway bills and the drama that swirled around the bills that passed and the ones that failed. (Video after the jump.) Excluding any votes related to budget appropriations, all of the tax giveaway votes in the 53rd Legislature were bipartisan— with Democrats and Republicans on both sides.
The Legislature’s mindset on tax giveaways shifted from January 2017– when two Progressive Democrats made a pact to vote against every tax giveaway until the schools were fully funded– to budget night in May 2018. The Progressive viewpoint was: If the state “can’t afford” to fully fund K-12 public education (due to self-imposed austerity), then we “can’t afford” to give away or excuse any more taxes until the schools are on stable footing and fully funded. Thanks to the #RedForEd movement, on budget night 2018, hundreds of teachers, parents, and supporters filled the House gallery and the Capitol lawn and demanded that public education take priority over corporate tax cuts.
As I mentioned in my talk, a thorough tax giveaway review bill and several tax reform or repeal bills were proposed in the Legislature in 2018. Unfortunately, due to the gamesmanship at the Capitol, these bills were not heard because they were proposed by Democrats: Senator Steve Farley and Reps. Mark Cardenas, Randy Friese, and Pamela Powers Hannley.
It’s time to review all of the tax cuts, tax exemptions, tax credits, tax subtractions, and other tax loopholes. Some of these tax giveaways benefit narrow interests– to the detriment of the general fund and the general public. We must determine which tax exemptions benefit the people of Arizona (like the TPT exemptions for food and prescription drugs); which ones benefit special interest groups (like gold bullion enthusiasts); which ones benefit individual corporations (like the infamous four-inch pipe); which ones we are effective and affordable; and how we can spark economic development without breaking our budget and starving all of our educational institutions, as we are now.
Several people told me that they felt hopeful after my talk because so many costly tax giveaways were stopped on a bipartisan vote. If fact, all of the tax giveaway votes were bipartisan— with Democrats and Republicans on both sides. This is why it is important to ask every candidate in the 2018 election what their stance is on tax giveaways, the #RedForEd movement, the Invest In Ed Citizens Initiative (to secure long-term funding for K-12), and the Outlaw Dirty Money Citizens Initiative. Will these candidates fight for the people or will they “take the money and run”?
LD9 House incumbents– Dr. Randy Friese and I– will be the featured speakers at the Stop Thief community forum on tax giveaways on July 31 at the IBEW Hall.
As many of you are aware, Arizona is upside down on its mortgage. Thanks to years of Republican tax cuts, our state gives away more than $13 billion in taxes and spends just $10 billion to run the state. For years, the people of Arizona believed the lie that our state is broke. Now the veil has been lifted. The people realize that our state has plenty of revenue. The problem is that the majority of our Legislators vote to give the money away–rather than spend it on much-needed services– like public education.
Austerity is a lie. Arizona has the money to fund public education. The problem is: the Legislature gives our taxes away. It’s time to end crony capitalism in Arizona.
When the Arizona budget comes up short because of the tax giveaways, loopholes, and sweetheart deals, Republicans cut funds from K-12 education, the universities, the community colleges, healthcare, and environmental protections. OR they suggest raising sales tax to fill in the budget gaps caused by tax cuts for the rich and for the corporations. (Unfortunately, some Democrats go along with more tax cuts for the powerful and more sales tax for the rest of us.)
The Arizona Legislature should be funding the People’s To-Do List– education, healthcare, infrastructure, and safety and security– not the corporate wish list.
I won’t be downtown for the birthday party because I am giving a talk on the Equal Rights Amendment on Saturday night in Tubac, but I hope you all will check out the festivities and the live music on the streetcar and along the route. Here are a few photos and a video from opening day.