The Skinny

ANOTHER REPUBLICAN TRIUMPH: HELP THE RICH, SCREW THE POOR

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.

SPEAKING OF LOUSY POLICY …

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?

REMEMBERING STEVE EMERINE

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.

This article appears in Jul 2-8, 2009.