The Republican budget — with the financially irresponsible Flat Tax, several other tax giveaways and miscellaneous failed bills stuffed into it to buy votes — is on the agenda today, June 22, 2021.
Here we go again. This will be the third time that the House has debated versions of the largest tax overhaul in Arizona history. Is the third time the charm? Have the few Republican holdouts like Senators Paul Boyer and Kelly Townsend and Rep. David Cook now sold out to Governor Doug Ducey, ALEC and the Chamber of Commerce? Have all the votes been bought to pass this expensive collection of bad ideas? Looks like it.
If you are on Twitter, you can see that Ducey is effusive about how amazing the Flat Tax will be for economic growth in Arizona and job creation. Don’t buy the lie. This tax giveaway plan is for Arizona’s 1%. They don’t want to pay the 3.5% Invest in Ed fee to support public education; Ducey and the Arizona Republican Party vowed to fix that inconvenient voter-initiated problem for the greedy. Approximately 30,000 Arizonans will benefit from the tax breaks and special interest pork in this budget.
Those 30,000 people will make bank on the Flat Tax. Governmental giveaways from the Republican Party will enable them to buy a new boat or an extra car every year thanks to their tax savings in this budget. The other 7.2 million Arizonans will be able to buy an extra car wash or a couple movie tickets per year with our tax break.
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.
Governor Doug Ducey and Arizona Republicans are promoting a 2.5% flat tax on personal income and have included it in the budget package, currently under negotiation in the Arizona Legislature. They are also proposing that income over $250,000 for individuals and $500,000 for couples be taxed at 1%. Usually excess profits are taxed at a higher rate, not at a lower rate, but, hey, this is Arizona.
You’ll remember that in 2020 the voters approved Prop 208 Invest in Education. With this citizens initiative, the voters created a 3.5% fee on personal income over $250,000 for individuals and $500,000 for couples. The Republican tax plan will eliminate the Prop 208 “burden” on Arizona’s 1%. Who will pay the difference? You will.
Rather than requiring Arizona’s richest 30,000 residents pay their fair share of public education costs, the state is giving them a tax break, and the state is going to pay the bill for them. In the news, Rep. David Cook called the Flat Tax “unfair” because everyone will pay taxes, but the state will “backfill” the cost and help out “high-earners” (ie, Arizona’s richest residents).
Other states have tried flat taxes and they have broken the budget. It will not only hurt the states budget, but it will hurt the cities and towns also. The Republican budget is a nonstarter. Except for the 30,000 millionaires and billionaires who will benefit from Republican largesse, it is bad for Arizona.
Amid the nationwide controversy regarding when it is safe for states to open up their economies during a pandemic, the Arizona House Health and Human Services (HHS) Committee will meet to hear presentations from open up experts. What about hearing from the public health experts, too?
The HHS meeting will be Thursday, May 14 at 1 p.m. The meeting was a total surprise to the Democrats on HHS. Why is this a surprise? Because the House has been in adjournment, with committee hearings paused, since March 23.
The agenda just popped into our inboxes on Tuesday and in the past 24 hours additional speakers have been added. The meeting is a collection of presentations by out-of-state experts who support opening up Arizona’s economy: Aaron Ginn, who is the co-founder of the Lincoln Network; Dr. Jay Bhattacharya (Stanford Health Policy), who has developed an antibody test, conducted research on the spread of COVID19 in the community and death rates, and whose research methods have been critized; Dr. Neeraj Sood (USC Sol Price School of Public Policy), who also did research on COVID19 community spread and death rates and whose results were released prematurely and without his knowledge; Lanhee J. Chen (Hoover Institute and Stanford University School of Public Policy), a FOX commentator and former Romney advisor, who has been critical of WHO and supports bring college students back to campus; Avik Roy, who is the President of the Foundation for Research on Equal Opportunity and who advocates for young people going back to work because mostly old people will die from COVID19; Dr. Joel W. Hay (USC Shaeffer Center), whose Twitter feed rails against state economic lock downs and cites Sweden (who has a higher death toll than neighboring countries) and sparsely populated South Dakota as success stories because they didn’t lock down their economies to stop the spread.
HHS Dems sent a letter to HHS Chair Nancy Barto asking to hear from some Arizona experts, rather than just listen to people from California tell us what we should be doing. (What happened to “don’t California my Arizona?”) For example, the HHS Democrats also would like to hear from these Arizona experts and get their thoughts on what the others have to say: Dr. Cara Christ, director of the Arizona Department of Health Services (ADHS); Will Humble, former ADHS director and current executive director of the Arizona Public Health Association; Dr. Dan Derksen, from the Rural Health Office; and Dr. Tim Lant, from Arizona’s university-based COVID19 modeling team.
Many of you have recently asked me what the Legislature is up to. After all, we haven’t been at the capital since March 23.
Today’s video is meant to answer the question: Are you done or what?
OK. We’re not done for the year. On March 23, the Legislature passed a “skinny budget” with the Senate bipartisan plan that included $50 million to fight the Coronavirus. After that, we voted to adjourn until April 13 (or until needed or it’s safe). Legislators and their assistants are all working remotely.
There is a lot of speculation about the Legislature, now that President has given up on his prediction that everything will be back to normal by Easter and is promoting staying at home through the month of April. The Legislature could vote remotely or come back with a skeleton crew and sine die (end for the year) or extend the adjournment.
The Capital Times is reporting that if we did indeed sine die now, only about 60 bills will have passed and been signed into law this year. Traditionally, the Legislature passes more than 300 bills a year. (More than 95 percent of these bills are Republican bills, even though the Democrats make up 48 percent of the Legislature.) As a long-time Arizona voter, I remember asking myself how in the world can they could pass so many bills every year, particularly when the Republicans promote themselves as party of small government, and they’ve been in charge for decades.
Now, as a two-term Democratic representative, I know that the vast majority of the new laws passed by Arizona Republicans are totally unnecessary and often harmful to segments of Arizona’s population. They are NOT the party of small government, obviously,
I relish the idea of passing ~60 bills in 2020, rather than 300. Legislation to enable pet projects, pet vendettas and sweetheart tax deals for utilities and multinational corporations seem completely irrelevant and wrong-headed during a mismanaged public health crisis.
It would be a great thing for the citizens of Arizona if the Legislature passed fewer bills. In 2020, Legislators proposed a record number of bills, more than 1700. If we end the session now, hundreds of bad bills that would have passed in a normal year will be dead! This includes ~20 voter suppression bills; >18 tax giveaways that could total a $1 billion per year of lost future revenue; a bill that allows pawn brokers to become payday lenders; a bill that criminalizes people from standing on the median; a bill that forces us to buy license plates more often just so 3M can sell the state of Arizona more reflective coating, the reefer madness ballot initiative, more vanity license plates; several one-off Republican pet projects related to education (other than public education, of course); multiple attacks on Clean Elections, the Citizens Initiative, representative government, local control, and professional credentials, and whatever else is on the Republican to-do list from the American Legislative Exchange Council (ALEC), the Goldwater Institute, the Institute for Justice, Americans for Prosperity, Arizona Tax Research Association, the Chamber of Commerce or President Trump. 
It is completely unrealistic that April 13 would be a safe return date to the capital. I think we should sine die by remote vote. We could come up with a bipartisan, mutually agreed upon short list of bills that deserve to pass. Let’s identify 10 bipartisan bills (other than Coronavirus response bills) that deserve to pass– including earned release credits, the grandparent stipend, more money for caregivers in the ALTCS system, and increased district direct assistance for schools. All the bad bills would die. We would leave a few hundred million dollars sitting on the table (because the tax giveaways wouldn’t pass).
With so little commerce going on right now because of the Coronavirus, there is little sales tax being collected. Our state runs on sales tax. We’re going to need those extra funds in the coming months, along with the billion dollars that we have in our rainy day fund.
The Legislature can always come back for a special session.
I have had two phone meetings already this morning [March 19, 2020] about the Democratic response to the novel Coronavirus on the state and federal level.
The first call was with House Dems, and we discussed our budget amendments that address the Coronavirus crisis. The second call was with Senator Kirsten Sinema, who outlined what the Congress is doing. She strongly emphasized that we lean on Governor Doug Ducey and Legislative Republicans to take the crisis and the potential loss of life seriously.
Currently, House Republicans plan to push the FY21 budget through with no Coronavirus Crisis Response Plan attached.
I recorded this video just a few minutes ago as I wait to be joined in to the Arizona House Floor debate on the budget.
