How Should Arizona Pay for Education? Tax the Rich? Or Tax the Poor? (video)

Red for Ed

“How can Arizona increase education funding?” has been an ongoing question since the Tea Party started hollowing out public education and doling out tax breaks ten years ago.

This week the Legislature is hearing a few education funding bills. The Senate Education Committee is hearing two bills related to education funding on Tuesday, January 28: SCR1002 (Brophy McGee) and SB1059 (S. Allen).

SCR1002 is a ballot referral to extend the Prop 301 “temporary” sales tax for education that was passed by voters during the Great Recession, make it permanent, and raise the sales tax from 0.6 cents on a dollar to 1 cent (on top of what you are paying in sales tax now).

SB1059 dictates how the new money from the ballot initiative should he spent. (There’s a lot of detail in there. Check it out.)

Obviously, we need more money for public education at all levels. My question about SCR1002 is: who should be paying more in taxes? Sales tax (AKA Transaction Privilege tax or TPT) is a tax on the poor. Continuously raising sales tax at multiple levels of government is also not “business friendly” because it artificially raises prices to consumers. When some Arizona cities and towns are bumping up against a 10% sales tax, is it smart to continue to raise sales tax to fund state government? Some cities and towns have rent taxes and sales taxes on food. Those really double down on the poor. With a 10% sales tax rate, people would pay $10 in sales tax on $100 of food. Sales tax is one of the more volatile income streams for our state because it depends on consumer purchasing. When consumers are strapped for cash, their purchases go down, and the states revenue goes down.

Continue reading How Should Arizona Pay for Education? Tax the Rich? Or Tax the Poor? (video)

2020 Could Be a Wild Ride in the Arizona Legislature

Arizona Legislature

In just a few weeks, the second session of the 54th Legislature and my fourth year in elected office will begin. In has been a jam-packed but productive interim with community events, tours, meetings at the capitol, and conferences on taxes, finance and public health.

One of the more informative meetings I attended this fall was the Arizona Tax Research Association (ATRA) outlook meeting. I have wanted to attend the ATRA meeting for years but chickened out because I knew I would be the only Democratic Legislator. I was the only Democrat, and I’m glad I went.

At the ATRA meeting, Arizona Senate President Karen Fann announced her intention to wrap up the next session quickly — in less than the targeted 100 days or the usual ~120 days. Rumor has it that the Republican goal is 85 days for the 2020 session. You’ll remember that in 2019 the Arizona Legislature voted to move the primary election day up from the end of August to the beginning of August. The related deadlines also have moved up, with the signature deadline falling during the time frame we are usually in session (March 7 – April 6, 2020). Fann gave a nod to tough election in 2020, when she told ATRA attendees that she wants to hear the budget by crossover week in February. She added that Senators Vince Leach and David Gowan have been “building the backbone of the budget” during the interim. She warned Republican Legislators in the ATRA audience that if the budget is not done according to her timetable, she will halt all other bills to focus on the budget and push it through. Given that we didn’t end the last session until Memorial Day, 85 days seems unrealistic to pass the usual 300 or more pieces of legislation. (Of course, passing fewer unnecessary bills could be a good thing for the people of Arizona… depending upon which bills they are.)

Why the escalated pace? Rushing the process means less negotiation, less information, less time to ask questions and seek alternative opinions, less time for constituents to voice their opinions on Request to Speak or at the Capitol, and more opportunity for mistakes and remorseful votes.

Continue reading 2020 Could Be a Wild Ride in the Arizona Legislature

#AZLeg Hears Competing Bills on Vaping (video)

Is vaping safe?

Vaping is a hot topic in the Arizona Legislature this session. E-cigarettes (also known as nicotine vape pens) are unregulated in Arizona. Nicotine vaping is widespread, and usage is increasing, particularly among youth.

Many adults use nicotine vape pens as a way to stop smoking real cigarettes. E-cigarettes don’t have the particulates that tobacco cigarettes do, but that doesn’t mean they are safe.

We have had two competing vaping bills in the Legislature. SB1147 is a tobacco industry bill that carves out vaping and regulates it separately in the Arizona statutes; it also preempts local laws. HB2357 regulates “any product derived from tobacco or containing nicotine” the same.

Back in the 1990s, when e-cigarettes first came to the US, tobacco control researchers at the UA and elsewhere said that e-cigarettes were “drug delivery devices” that should be regulated by the Food and Drug Administration (FDA). The tobacco industry fought this and said e-cigarettes were tobacco and should be regulated like tobacco. They won their court case at the national level, and e-cigarettes have been regulated like tobacco since then.

HB2357 is aligned with the federal law. SB1147 puts vaping into its own category— not a tobacco product or a nicotine delivery device.

Continue reading #AZLeg Hears Competing Bills on Vaping (video)

With ‘Wayfair’ Bill Stalled, Will Republicans Stop New Revenue Streams? (Video)

The budget is still being negotiated behind closed doors. The Republicans have passed several tax cut bills, but not all of them have been heard in Committee of the Whole (COW, where the real debates happen).

We also have not heard the “Wayfair Bill” in COW because it is stalled in House Rules (with several other bills). HB2702 passed House Ways and Means unanimously several weeks ago but never got to the Floor for debate or a vote.

South Dakota vs Wayfair Inc. is the supreme court case that said states can charge sales tax on online sales. States, local governments, and brick and mortar businesses have been losing trillions of dollars to online retailers. Just look around town, and you will see fewer local businesses, less stock on the shelves, and many vacant store fronts. Taxing in-person purchases but not online purchases is unfair to local small businesses, hurts our local economy, reduces the General Fund (thus reducing education funding), and ultimately reduces consumer choice.

Arizona residents made $1.7 trillion worth of online purchases in 2018. That is how much Arizona businesses lost in sales. On those purchases, the state lost $85 million in sales tax (TPT). Cities and counties lost more than $45 million. Prop 301 (the education sales tax) lost $10.2 million.

Continue reading With ‘Wayfair’ Bill Stalled, Will Republicans Stop New Revenue Streams? (Video)

‘Democracy in Chains’ Connects Dots on Libertarian & Republican Strategies (video)

Affordable Care Act

If you often scratch your head at the bad bills that the Republicans pass in Congress and in the state legislatures and wonder what their end game is, you should read Democracy in Chains by Nancy McClean.

What you may think are random bad ideas that have somehow gotten into law are actually part of a grand scheme that has been playing out since Brown versus the Board of Education attempted to desegregate public schools in the United States.

An academic, McClean has studied the articles, books and letters of James Buchanan, the economist not the former president. Buchanan was the primary theorist of public choice theory. In the 1950s, public choice theory was used as a rationale to close all of the public schools in the state of Virginia (rather than comply with desegregation) and is being used today to support state-funded vouchers for private and religious schools. In Virginia in the 1950s, the state gave money to white parents for private school vouchers and allowed hundreds of black children to go uneducated for years. Needless to say, this was a travesty of justice.

Continue reading ‘Democracy in Chains’ Connects Dots on Libertarian & Republican Strategies (video)

Are Unregulated Health Insurance Plans Good for #AZ Consumers?

Healthcare forum

In the Health and Human Services Committee on Thursday, Feb 14, we are hearing a long list of bills including two about health insurance.

HB2375 would extend short-duration insurance to three years. This insurance is currently capped at one year because it is seen as a stop-gap measure for people who are between jobs or disconnected from insurance for some reason.

HB2376 relates to association health care plans for small businesses and sole proprietors. This bill allows them to band together and buy insurance as a group. A concern with this idea is regarding the quality of insurance that will be purchased and how that will impact workers who will be included under these plan.

Will association health plans cover essential health benefits, like the Affordable Care Act does? Will they cover people with pre-existing conditions? Will they have lifetime insurance caps? Will coverage be determined by the employer’s “deeply held religious beliefs”?

Continue reading Are Unregulated Health Insurance Plans Good for #AZ Consumers?

More Tax Giveaways: Republicans Fight for ‘Revenue Neutral’ (video)

revenue neutral

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.

Continue reading More Tax Giveaways: Republicans Fight for ‘Revenue Neutral’ (video)

Stop Thief! Community Forum on Restoring Fair Taxes

Arizona Legislature

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.

Continue reading Stop Thief! Community Forum on Restoring Fair Taxes

Happy Birthday, SunLink! (video)

Four years ago, on a ridiculously hot July day, thousands of Tucsonans showed up to welcome the Modern Streetcar (AKA Sunlink or affectionately “the trolley”) to downtown Tucson.

Tomorrow, July 28, Tucson will celebrate the streetcar’s steamy birthday with music and air-conditioned rides.

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.

Sunlink Tucson
SunLink dedication
Playground Tucson
The view from The Playground.
Sunlink Tucson
Downtowners welcome the streetcar to Congress Street.

Continue reading Happy Birthday, SunLink! (video)

Corporate Tax Giveaways Are Key Issue in LD9 Primary (video)

Rep. Pamela Powers Hannley

The choice is clear in the Legislative District 9 primary race.

Do you want more old-school economic development based on corporate tax breaks and sales tax giveaways? You know… the same policies that starved our public education system, left our infrastructure in shambles, forced thousands of Arizonans to live in poverty, destroyed our state budget by giving away billions in taxes each year, and left Tucson with a 25% poverty rate. If you support giving your taxes away and banking on trickle down economics– vote for challenger in the LD9 race.

If you want a leader who will continue to be the voice of the people in the Arizona Legislature, vote to re-elect me– Rep. Pamela Powers Hannley. I have used my voice, my amendments, my votes, and parliamentary procedures to defend the rights of workers, patients, students, teachers, women, and the underserved. In 2017, Progressive Democrats vowed to vote against every corporate tax cut and tax credit bill until public education is fully funded. In 2018, that line in the sand against tax giveaways and for public education funding became the rallying cry for the most Democrats in the Legislature and for the #RedForEd movement. (You can see some of the tax giveaway votes here.) In my opinion, Arizona government should funding the People’s To-Do List– education, healthcare, safety and security, and infrastructure– instead of funding the corporate wish list.

In his recent speech at the Democrats of Greater Tucson (DGT) luncheon, J.P. Martin, who is challenging Dr. Randy Friese and me in the LD9 primary, made it clear that he is the Rio Nuevo Board’s candidate. He even showed their slides when he pitched creating more sales tax giveaway districts (AKA tax increment financing districts, like Rio Nuevo) around Southern Arizona. He says the northwest Tucson malls “need our help” because there are too many empty stores and young people need something to do on the weekend– like go shopping. (You can read about his talk in Tim Steller’s Political Notebook column here.)

I agree that brick and mortar retail is faltering due to increased online sales and a corporate push to reduce labor and overall costs. I disagree that government should incentivize retail shopping with tax dollars. Tax giveaways drain on our state coffers. Arizona is already upside down on its mortgage. The state government gives away or otherwise excuses more than $13 billion in taxes each year and leaves around $10 billion to run the state.

I support taxing digital goods as a way to level the playing field between online purchases, brick and mortar retail stores, and local small businesses. There are multiple proposals floating around to increase sales tax for a variety of reasons. Further increasing sales tax in Pima County would bring our sales tax rate in the neighborhood of 10%. Taxing local purchases but not digital purchases hurts local businesses. Besides leveling the playing field, taxing digital goods would raise hundreds of millions in much-needed revenue for public education, community colleges and the university system, as well as other crucial needs. Sales tax on digital goods is an increasing revenue stream, unlike store-based sales tax.

Retail store sales and related sales tax are declining nationwide, resulting in store closures. This one of my arguments against pinning Tucson’s economic development future on sales tax generation by brick and mortar retail stores in the downtown Rio Nuevo Tax Increment Financing District (TIF).

I want to know what the public’s total investment in every incentive deal– not just Rio Nuevo. Are taxpayers getting our money’s worth? I have heard the rosy projections and seen the slide shows. I want to see the spreadsheets. Perhaps it is my journalistic Spidy sense, but I am a “show me, don’t tell me” person when it comes to giving taxes away. The public has the right to know the bottom line about Rio Nuevo and any economic development project that uses taxpayer money.

DGT hosts a weekly luncheon with a steady cast of candidates rotating through. My last DGT talk was: Economic Development, Access to Care & Workforce Development: A Progressive Roadmap.  Click on the link to read the speech and watch the video. It provides a great contrast to my challenger’s ideas. (Watch the video after the jump. Also, check out research regarding the reality of TIFs around the country. Seriously, Detroit, $16.5 million for a Whole Foods store?)

Continue reading Corporate Tax Giveaways Are Key Issue in LD9 Primary (video)