The end is nigh—but since we're going to press before the state's budget deal has been hammered out, we're not sure if it's the end of the legislative session, the end of nonvital state services, or the end of the world as we know it.
We can say that the budget proposal that emerged last week really, truly sucks. Speaker of the House Kirk Adams, who has been quietly pushing for Arizona to switch to a flat tax, finally saw his chance to get it done during negotiations with Gov. Jan Brewer. Adams said he'd agree to put a temporary sales tax on the ballot for voters to decide—if Brewer would agree to the flat-tax proposal.
What's wrong with a flat tax? Well, most taxes in Arizona are basically regressive; the sales tax, for example, takes a larger percentage of the income of poor folks than rich folks.
But the state's income tax—which really isn't that high to begin with, especially if you have a decent accountant—is the only progressive feature we've got. Wealthy Arizonans pay a lot more than poor Arizonans.
Adams and the rest of the Republicans in the Legislature who support this giveaway want to end any progressive taxation by giving the rich a big ol' tax break. The flat-tax proposal would charge everyone a 2.8 percent rate. Right now, the highest bracket pays 4.5 percent.
But here's the biggest problem: The proposal, as it was structured, cuts the total amount collected by the state by an estimated $450 million, at the very least. (The actual impact could be even higher, but there's been so little time to analyze it that nobody really knows what the final cost will be.)
So as the state is wrestling with a deficit of more than $3 billion, the solution of GOP leaders is to cut the revenues coming into the treasury from the wealthiest people in the state. Have these people ever heard that if you're in a hole, the first thing you want to do is stop digging?
To make up for the loss in revenue, they want to ask voters to approve a temporary 1-cent-per-dollar increase in the sales tax. So we make the system even more regressive for a few years, and when it expires, we're truly screwed.
Even more absurd: Veteran legislative reporter Howie Fischer of Capitol Media Services noted in a story earlier this week that many Arizonans with average incomes could end up paying more in income taxes under the flat-tax plan, because the plan would make a major change in how Arizonans compute their taxes: They would be taxed on their total gross income rather than their federal adjusted gross income.
That means a lot of deductions—for health insurance, 401(k) and IRA retirement plans, interest paid on student loans, etc.—will no longer exist. That screws over the average Arizonan while helping the people in the highest-earning bracket.
A major change like this ought to be vetted and given a real debate. Instead, it's being pitched at the 11th hour. The Senate Appropriations Committee wouldn't even support it; to get it moving, Senate President Bob Burns had to twist the rules and send the spending bills through the Senate Education Committee.
As we go to press, it's anyone's guess whether the package has enough votes to pass the Legislature.
And get this: The flat tax doesn't take effect until 2012, when many of these lawmakers won't even be around to deal with the consequences. If it's such a great idea, what's the rush? Why can't lawmakers take time to actually figure out the impact?
The last time anyone really studied a flat tax was back in 2003, when then-Gov. Janet Napolitano convened a commission to study Arizona's tax structure. The conclusion: "Ultimately, the commission rejected the flat tax, because figures from the Department of Revenue showed that to remain revenue-neutral, the flat tax rate would have to be near 3.54 percent, raising the tax rate on all individuals who earn adjusted gross incomes of less than $100,000 per year and lowering the tax rate on all individuals who earned $100,000 or more per year."
Republicans are arguing that they've solved that issue by dropping the rate—which also reduces the amount of income tax collected by at least $450 million. But even if taxes wouldn't go up for the poor and middle class—and Howie did a pretty good job of showing how those taxes very well could increase under this plan—the state will still have to cut back on spending to make it work. And those cuts—whether they're to higher ed, health care, social services, state parks or whatever—will hurt average Arizonans more than the wealthy.
Guess that's just the Arizona Republican Party at work.
The Realtor-backed proposal to ask Tucson voters to force the City Council to increase police and fire staffing levels was expected to be delivered to the City Clerk's Office this week.
If this proposition wins in November, the city will be financially hosed. In the first year, it will probably cost taxpayers $10 million; by year five, when staffing reaches the level required by the initiative, it will cost an estimated $50 million more a year.
Where's the money going to come from? Deeper cuts to other areas of the city's budget, of course. But, hey, who needs parks, anyway?
Ward 2 City Councilman Rodney Glassman is gathering signatures to support naming a ballfield after the late Steve Emerine, a longtime journalist and political activist who died earlier this year at age 73 following complications from surgery.
Besides working as a reporter and editor at the Arizona Daily Star and Tucson Citizen, serving as county assessor, teaching journalism at the UA, running his own consulting business and penning a column for Inside Tucson Business (our sister paper), Emerine was a Little League coach who "insisted that every child play in every game and was known for his generosity and kindness to the kids on the teams he coached," Glassman writes in the latest Ward 2 bulletin.
Stop by Glassman's Ward 2 office, 7575 E. Speedway Blvd., to find petitions to name a baseball field at Jesse Owens Park after Emerine.
In related Emerine news: The University of Arizona School of Journalism, which employs your Skinny scribe, has created a scholarship in Emerine's name. The school, with the help of former department head Don Carson and TEP spokeswoman Betsy Bolding, has raised $4,800 for the Steve Emerine Scholarship, which is directed toward students who show an interest in covering government. Major contributors include the Norville Philanthropic Fund and Pima County Democratic Party.
The first recipient of the scholarship is former Tucson Weekly intern Megan Neighbor, who spent the spring semester interning at the Arizona Legislature.
If you'd like to donate to the Steve Emerine Scholarship, send a check made out to UA Foundation/Journalism with Steve's name in the memo line to: UA School of Journalism, PO Box 210158B, Tucson, AZ 85721-0158.
Find early and late-breaking Skinny at blog.tucsonweekly.com.