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)
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)
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.
Continue reading Tax Cuts R Us… #WhatCouldGoWrong (video)
“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)
Thursday, January 23, marked our first floor debate of the 2020 session of the Arizona House. We had Committee of the Whole (COW) for HCR2023, a bill to raise the Constitutional funding cap that was imposed upon schools districts in 1980.
We have to pass this bill in order to allow school districts to spend the money that we allocated to them. The 1980 funding cap formula is based on figures from the late 1970s. It is way out of date, obviously.
During the debate, Republicans tried to make the point that Legislators had to raise the spending cap because they have been so generous with the schools, and the schools are getting more money than ever.
The schools are getting “more money than ever” because we have more students in schools and more people in Arizona and because the schools were devastated by Republican budget cuts in the past decade.
Continue reading #AZLeg Must Raise 1980 Funding Cap for Schools (video)
Should the Arizona Legislature help Microsoft pay its APS bills?
Tuesday was a light day at the Capital. There was no floor action, but I had time to catch up with colleagues and sign some of their bills. I wanted to tell you about the conversation I had with two Microsoft lobbyists about the tax break that Microsoft wants.
You may remember my blog post on Powers For The People (back in December) about the tax review committee that I was on, due to my membership on the Ways and Means Committee. One of the income tax credits that we reviewed was for an Apple international data center to be built with renewable energy in Mesa. At the time, Apple was offered a TPT (sales tax) break also, but the committee reviewed only the income tax break.
The lobbyists were in my office because Microsoft wants the TPT tax break that was offered to Apple. I told them that I really don’t support tax giveaways to multinational corporations. ￼Period. I don’t support any tax giveaways when ~68% of Arizona women aren’t getting first trimester prenatal care, and that is contributing to AHCCCS wasting $2-4 billion dollars on premature births (Not to mention the long-term health effects of prematurity.) When thousands of Arizona mothers and their children are living in poverty with food and housing insecurity, why would I prioritize a tax break for one of the most successful corporations in the US?
The lobbyist told me that the reason Microsoft needed a TPT tax break because “electricity is too expensive in the state of Arizona.” Microsoft doesn’t want to pay sales tax on electricity for this giant data center. International data centers take a use a lot of electricity because it is a building full of servers and cooled to ~65 degrees. This particular tax break is related to data centers built with renewable (solar) energy, which will already lower their energy cost significantly.
Continue reading Microsoft Wants a Sales Tax Break Because ‘Electricity Is Too Expensive in Arizona’ (video)