Background on Arizona’s budget deficit crisis

For the last six years, former Gov. Janet Napolitano and her allies in the Legislature increased spending by huge amounts. They spent every single dollar of revenue that came pouring in from the real estate bubble.

They jacked up spending to unsustainable levels, and hired too many government workers.

Now, just as we predicted, the revenue bubble has imploded. The state is scheduled to spend $11 billion next year, but revenues are falling short of $8 billion. That means a deficit of over $3 billion—one of the worst in the nation, on a per-capita basis.

The solution is to reduce the waste in the budget, and get spending back down to realistic levels.

And a lot of Arizona legislators are trying to do just that. They are working hard, and pulling late nights at the Capitol, to balance the budget without raising your taxes.

But Governor Jan Brewer and a coalition of special interests want the Legislature to balance the budget on the backs of taxpayers, by raising taxes a record $4 BILLION over four years. They want to treat the Arizona taxpayer like an ATM machine, at a time when family breadwinners are losing their jobs and many businesses are closing their doors.

Governor Brewer’s latest proposal would mean raising sales and property taxes by $1,600 over the next four years. That would happen in the middle of a deep recession, when families are already cutting back on their budgets to live within their means, and when many people are losing their homes because they can’t keep up with heavy property tax increases.

Normally, it takes a two-thirds vote of the Legislature to raise taxes. But Governor Brewer is trying to get the Legislature to refer a tax increase to the ballot in a special election. For that, she needs only a simple majority of Legislators.

Some Legislators are under the mistaken (or self-serving) impression that referring a tax increase to the ballot is different from voting to raise taxes. But you know the truth. If a tax increase wins at the ballot, the spending lobbies will gain at least $4 BILLION of your hard-earned tax money. So the Big Spenders are prepared to spend millions of dollars on round-the-clock radio and TV ads, and send millions of glossy mailers to voters.

And yet, the Governor’s proposed tax increase is totally unnecessary.

Legislative leaders already have detailed budget plans that do not raise taxes, and that have only marginally more spending cuts than Gov. Brewer’s plan. Last we saw, the Legislature was looking at reducing the state’s general fund budget by 6 percent. Brewer’s latest figure for budget cuts was also about 6 percent of the state’s general fund.

The current House and Senate plans are heavy on fund sweeps and other gimmicks—but that is due to the failure of a small handful of holdouts to make the necessary budget reductions. AFP-Arizona has offered more than $6 billion in options that do not involve raising taxes.

Link to AFP-Arizona’s list of deficit-reducing options:
http://static.taxcutsforall.com/files/breweractionalert5-21-9.pdf

In her defense, Brewer has invoked Ronald Reagan’s 1967 decision to raise taxes, when he was governor of California. But Reagan did NOT raise taxes during a recession. Herbert Hoover did that. So did George H.W. Bush. Passing a big tax increase during a recession is economic and political suicide.