PASS THE SALES TAX, AND SAVE JOBS!
UA economists told us last week that the state will save more than 13,000 jobs if voters pass a temporary, one-cent sales tax increase on May 18.
An analysis done by UA Eller School of Management economist Alberta Charney notes that passage of the sales tax would not come without consequence. Assuming that people will buy fewer goods if the cost is 1 percent higher, Charney estimates that up to 7,400 jobs could be lost in the private sector.
But if the state does not pass the sales tax and is forced to cut another $867.5 million in state spending, it will lose an additional $442.5 million in federal matching funds. The loss of that money and the cuts to state government will result in the loss of 20,500 jobs, according to Charney's model.
That's a big difference from an earlier analysis of the impact of a sales-tax hike that was done by the Beacon Hill Institute at the behest of the Goldwater Institute, which projects a net loss of 9,155 jobs if the tax increase passes.
The UA study, which notes that it was unable to replicate the Beacon Hill numbers using accepted economic models, pokes a number of holes in the Goldwater study. We'll spare you all the economic-modeling details (although if you want them, we have links on The Range at blog.tucsonweekly.com), but we will point out one glaring oversight: The Goldwater study doesn't take into account the loss of $442.5 million in federal matching funds if the sales-tax proposition fails at the ballot.
The bottom line: While the sales tax will drain dollars from the private sector, "those dollars don't disappear," Charney notes in the report. "Government doesn't bury (or burn or flush) the proceeds—it spends those dollars and thereby pumps money right back into the economy."
MORE B.S. FROM GOLDWATER
That Beacon Hill Institute economic study isn't the only tax-related number-fudging going on at the Goldwater Institute.
Goldwater's Byron Schlomach sent out a press release last week crowing about how Easter Sunday was "Tax Freedom Day" in Arizona.
"According to the Tax Foundation, that's the day by which Arizonans have earned enough money to pay their total 2010 tax burden," Schlomach wrote. "After 94 days or 26 percent of the year has passed, the average Arizonan finally gets to work for himself!"
The only problem: Tax Freedom Day came a long time ago for the "average Arizonan."
That's because both federal and state income taxes are progressive taxes—meaning the bulk of them is paid by the highest earners. (For more, see Page 17.) So simply adding up all of the taxes collected and dividing by the number of taxpayers produces a skewed result that bears no relationship to people's actual tax burden.
For example: If five people pay a total of $100 in taxes, and one of them pays $80, while the other four pay $5 each, the average comes out to $20 each. But that's not an accurate representation of how much each person paid.
Tax Freedom Day is just more bullshit to confuse people about their taxes.
GIFFORDS' WAR CHEST GROWS
While the complete reports aren't due until after our deadline, Congresswoman Gabrielle Giffords tells us she raised more than $490,000 in the first Federal Election Commission reporting period of the year.
That's not quite as much as the $500,000 that Republican challenger Jonathan Paton collected, but Giffords has squirreled away a lot more than Paton over the last year. She's ending the reporting period with more than $1.95 million on hand.
WADING INTO THE LD26 HOUSE RACE
We hear that Republican Wade McLean, the former superintendent of the Marana School District, is considering a run for the Arizona House of Representatives in Legislative District 26, which stretches from the Catalina Foothills up through Oro Valley and into SaddleBrooke.
District 26 is one of Arizona's few districts that's represented by both a Republican—Vic Williams—and a Democrat—Nancy Young Wright—in the Arizona House of Representatives.
Wright is the only Democrat so far running in LD26. Williams is also seeking re-election, with Republican conservative Terri Proud also seeking the second seat.
McLean has good name ID in the district; they've even named a pool after him at Marana High. The debates promise to be a lot of fun if he gets into the race.
DOWNTOWN DEAL-MAKING
In a few weeks, Michael Keith will take over from the controversial Glenn Lyons as leader of the Downtown Tucson Partnership. Keith's interim appointment is for 120 days; after that, he may be retained; the partnership's board may also decide to do a search for a permanent director.
Since 1985, Keith has run Contemporary West Development, which has built or rehabilitated more than 30 homes in the downtown area, including the 1905 Cheney House and the Franklin Court townhouses. He has twice won preservation awards from the Tucson-Pima County Historical Commission for his efforts over the last decade.
A long-time enthusiastic supporter of downtown, Keith's attention will now shift away from his construction activities. He'll have to concentrate much of his time securing funding sources for the Downtown Tucson Partnership.
Much of the organization's budget comes from the city of Tucson, either through an outside-agency allocation or an agreement to assist the ParkWise parking-enforcement program.
One of the first things Keith and City Hall will have to resolve is the future of another partnership agreement with the municipality. The city pays about $8,000 a month for "planning, negotiation of development agreements, and stakeholder collaboration and outreach," according to a memo from City Manager Mike Letcher.
Because of his past experience in these areas, Lyons was specifically referred to in the contract, and the city has the option of terminating it when he leaves. Assistant City Manager Sean McBride tells The Skinny that discussions are underway with the DTP, and if the parties decide to continue the agreement, it will be taken back to the City Council for approval.
Keith thinks the contract needs to remain in place.
"The partnership does so many intangibles," he says. "It's obvious it does an enormous amount of work facilitating the private sector interaction with the city. I'm just finding out some of the economic development work it does. The partnership has to play that role."
EXPANDING ARIZONA'S BUDGET PROBLEMS
There's not much room left to update you on the latest from the Arizona Legislature, but we can let you know that a lot of bills are moving quickly through the legislative process. For details, visit The Range's online bill-tracker, The Blogislature, at blog.tucsonweekly.com.
We did want to mention that the tax-cut package being pushed by House Speaker Kirk Adams finally got out of the Senate Finance Committee on Monday, April 12, on a party-line vote.
The bill, which is a collection of tax cuts for corporations, would cost the state $650 million once it's fully implemented in 2018.
The state already has a billion-dollar structural deficit.
Find early and late-breaking Skinny at The Range, our daily dispatch.
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