Rep. Steve Farley could hardly contain his excitement about the
budget plan that House Democrats put forward earlier this week.
Farley, a self-described wonk who represents central Tucson, says
the plan preserves vital educational, welfare and economic-development
programs while creating a more progressive tax system.
“The money is coming from delinquent taxpayers and from people who
can afford to pay it—people who earn more than $250,000 a year,”
Farley said. “It’s coming from out-of-state people who buy power from
our utilities. It’s coming from a lot of different sources of people
and entities who can afford to pay in order to restore things that will
help the economy.”
Unsurprisingly, GOP House leadership did not share Farley’s
enthusiasm about the Democratic budget plan. Within hours of the
proposal’s unveiling on Monday morning, Republicans responded with a
press release that blasted the proposal as irresponsible.
“The size of state government is simply too large compared with our
ability to pay for it,” said House Speaker Kirk Adams. “The House
minority proposal actually restores government cuts needed to balance
the budget. Not only does it fall short of a balanced budget; it
actually makes our budget problem worse.”
In comparison, a draft GOP proposal relies on deeper cuts in state
spending rather than tax increases. Agencies that were already slashed
in January to balance the current year’s budget would see even less
money in the fiscal year that begins July 1. The Department of
Education would be cut by nearly $330 million; universities would be
cut by $40 million; the Department of Economic Security would be cut by
nearly $100 million; the Department of Health Services would be cut by
more than $45 million; and the Department of Corrections would be cut
by more than $38 million.
But that plan is complicated by federal requirements that could
force the Legislature to restore some previously cut funding in order
to qualify for stimulus dollars, unless the state can get a waiver from
the feds. In addition, Republican Gov. Jan Brewer has said she wants
lawmakers to temporarily increase taxes by $1 billion rather than
simply cutting to bridge an estimated $3 billion shortfall in the next
fiscal year.
The Democratic plan uses some financial tricks—such as
delaying $217 million in bills into the next fiscal year—and
includes $293 million in spending cuts.
But the biggest political challenge for Democrats is persuading
Republicans to accept a package of tax hikes. The plan estimates, for
example, that the state could bring in $80 million by increasing income
taxes on Arizonans who earn more than $250,000 annually back to the
level they were paying in 2005.
The Democratic plan would raise $250 million with the return of a
statewide property tax that has been suspended for the last three
years. The GOP caucus has been pushing for the permanent repeal of that
property tax.
The Democrats also want to raise $233 million in new taxes on
utilities that generate energy using nonrenewable resources. Farley
says a significant percentage of that tax will be paid by people who
live outside of Arizona; he adds that it will also encourage energy
companies to invest in solar and other renewable-energy projects.
Those tax hikes were immediately dismissed in the GOP’s written
response to the Democratic plan.
“The House minority budget proposal clearly demonstrates they want
to lead the state in the wrong direction,” said Rep. Steve Yarbrough of
Mesa. “Instead of reducing unaffordable expenditures to bring them into
alignment with revenues like every other household, business and local
government is doing, the House minority wants to take more from
Arizonans. We must expand our economic base and create jobs, and we
accomplish that by attracting business and innovation to Arizona, not
by raising taxes.”
Farley says he’s not surprised that GOP House leaders oppose the
Democratic plan. However, he suggests that Democrats may be able to
work with some Republicans and Brewer to come up with a budget plan in
a manner similar to how former Gov. Janet Napolitano sometimes got her
budgets passed in spite of opposition from GOP legislative leaders.
But without a two-thirds majority in both chambers of the
Legislature, any plan that raises taxes would have to go before voters
for approval.
“We’re letting the public know there are other solutions out there,”
Farley says. “We don’t have to just cut, cut, chop, chop. We can do
something that would only cost the average Arizona family $80 to $100 a
year. This is a very small price to pay to have an economically strong
state that can take care of its own.”
This article appears in Apr 2-8, 2009.
