Tuesday, August 11, 2009

State Budget: Day of Decision

Posted By on Tue, Aug 11, 2009 at 11:21 AM

We're on pins and needles wondering if Republican senators will find their 16th vote today to pass their overdue budget for the state of Arizona. We're past the expanded deadline to get a referendum on the ballot to ask voters to pass a temporary sales tax to get Arizona through these tough times, but Secretary of State Ken Bennett says he can still make it happen if the vote happens today.

We're certainly hoping the budget package fails. There’s a lot wrong with this budget, but the biggest long-term problem has to be the tax cuts, which would primarily benefit the wealthiest people in the state.

The Joint Legislative Budget Committee estimates that the tax cuts would ensure that Arizona would have budget shortfalls years into the future, even if voters were to approve the temporary one-cent-per-dollar sales tax that Gov. Jan Brewer wants. It’s perplexing that Brewer would recognize the need for additional revenue through a sales-tax increase, but then agree to massive cuts to corporate and income taxes that will cripple the state’s ability to fund social services that she purports to be concerned about, along with a property-tax cut that will primarily benefit business interests.

If the sales tax is approved, JLBC estimates that the state would have a $892 million shortfall in fiscal year 2011, which lawmakers will have to address when they start writing a budget five months from now. The numbers get worse from there: $2.2 billion in fiscal year 2012 and $2.7 billion in fiscal year 2013.

If the sales tax isn’t approved, the numbers are even more grim: A shortfall of $1.9 billion in 2011, $3 billion in 2012 and $3.1 billion in 2013.

This does not strike us as the fiscally responsible way of addressing the state's structural deficit, no matter how happy it makes Grover Norquist.

Read the JLBC report here: FY_2009_-_2013_Balance_Sheet__08-04___2_.pdf

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