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.
Instead of “Ditat Deus” (God Enriches), Arizona’s motto should be “Tax Cuts R Us.”
Today in the Ways and Means Committee, we heard three tax giveaway bills: HB229 (corporate welfare for utility companies); HB2355 and HB2356 (increases to the 25% charitable tax credit passed in 2019); and HB2358 (increases to the dependent tax credit).
HB2293 exempts the purchase of electric storage units from sales tax (AKA Transaction Privilege Tax or TPT) and from use tax. When I asked Rep. Tim Dunn, the sponsor of the bill, who benefits from this, he said the utility companies benefit from it, but consumers will see a financial benefit because their rates will go down. (Really? When has that ever happened?)
The industry lobbyist made many circular arguments trying to convince us that giving utilities a tax break was good for consumers. Currently, there are eight rate increase cases before the Arizona Corporation Commission (ACC), including rate increase requests from APS and other electric utilities. When I started talking about rate increases and the relationship to infrastructure investment by utility companies, Committee Chair Ben Toma said that I was off-topic. Dunn and the energy lobbyist were the ones that said giving APS, TEP and SRP a tax break was going to lower costs to consumers. I believe that I was totally on topic when I said that these things were likely to raise our rates in the long term, not lower them.
One of the prevailing messages from the grassroots in 2018 was: no more tax giveaways until the schools are fully funded. Republicans didn’t get that message. They also didn’t get the Invest In Ed message that we — the people– think the rich could pay more in taxes to help fund education.
The Republican budget cuts income taxes, TPT and fees by $386 million and leaves education and other needs underfunded (or unfunded).
We started the year with a $1 billion surplus to invest in the People’s To-Do List: education, infrastructure, healthcare and safety and security. The Republicans have added bits of money to these areas — just enough to make it look like they’re doing something— but the need is much greater.
Republicans are ignoring multiple crises that are brewing in our state including unnecessary maternal and child death; rock bottom education funding; crumbling roads, bridges and school buildings; lack affordable and low-income housing; the shortage of teachers, doctors and nurses; too many people living in poverty; lack of access to affordable healthcare… need I go on?
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.
About 50 LD9 residents and Democratic Party regulars attended the Clean Elections primary debate on June 28 with candidates Dr. Randy Friese, Matt Kopec, and me. (The hour-long event was taped by the Clean Elections Commission.)
The debate had an interesting format– much better, in my opinion, that some of those free-ranging presidential debates where each candidate was asked a different question, making it difficult to compare candidates. The format was: one-minute intros, a set of questions that everyone answered (two minutes each), a set of questions written by audience members and addressed to specific candidates or to anyone (one minute each), and one-minute wrap-ups. (Our audience was very involved and submitted many good questions.)
The debate gave me an opportunity to explain my sustainable economic development ideas and talk about my background and other ideas. Here is the excerpt about economic development (29:33 mark):
Economic reform is a big part of my platform. Everything in my platform either raises money or saves money to pay for the things we want like quality education, a solid infrastructure, and good-paying jobs. Public banking is a big part of it, but it’s not the whole part. I really believe that we have suffered under the failed economic policies of trickle down economics and austerity. So, we have largesse for the 1% and austerity for the 99%.
With the idea of public banking, we could bring all or part of our tax dollars back from Wall Street and invest it on Main Street.
The cornerstone of my economic reform ideas is establishment of public banking at the state, county, and/or municipal levels.
In a nutshell, public banking advocates believe that austerity is a lie and that budget-cutting and layoffs by governments is unnecessary and harmful to citizens. There is plenty of money. The problem is that our taxpayer funds are held in too-big-to-fail banks on Wall Street and invested for the benefit of the banks’ shareholders– instead of being held here in Arizona and invested for the benefit of the citizens of Arizona. Public banks invest on Main Street for the public good — rather than allowing OUR MONEY to be gambled (and potentially lost… again) on Wall Street.
There are many ways a public bank could be constituted. For example, in my speech to the LD9 precinct committee members, I suggested taking 10% of the state’s surplus rainy day funds and using that to establish an infrastructure bank. This state bank could self-fund much needed improvements and new roads to make the state more competitive and easier to traverse. It also could lend money to counties and cities to build their projects. In turn, the state would make a modest interest rate on the loans.
Creation of a state public infrastructure bank would address several economic problems in one fell swoop…