A few Republican holdouts managed to stop Gov. Doug Ducey from achieving his dream of massively cutting taxes for his rich pals while simultaneously ensuring cities and towns will be hamstrung from providing government services in the future.
We refer, of course, to Ducey's mad scheme to shove through a flat income tax with virtually no time to take a serious look at its impact.
Since Republicans hold a 16-14 advantage in the state Senate and a 31-29 advantage in the state House of Representatives, they must have all their members in support of this proposal in order to get it to Ducey's desk. As of last week, there were enough holdouts that the Legislature finally gave up and said they would just go home for a couple of weeks while they put the pressure on the lawmakers who know this is a bad idea.
Ducey was so furious that he vetoed more than 20 bills and said he wasn't signing anything until a budget reached his desk.
Ducey and his minions have been out portraying this tax plan as a fair way to reform Arizona's taxes. Well, let's look at who benefits, according to the Joint Legislative Budget Committee: If your household earnings are between $40K and $50K, you now pay, on average, $683 in income taxes. Under Ducey's plan, you'll enjoy an annual tax cut of $39, or 5.7%.
Meanwhile, if your earnings are $200,000 to $500,000, you'll enjoy an annual tax cut of $3,202, or 32%. If you earn $500,000 to a million a year, your taxes will decrease, on average, by more than $12,000, or nearly 40%. And for those lucky few who earn more than $1 million will see their taxes cut by about 43%.
Meanwhile, state revenues will drop by an estimated $1.9 billion a year—and since a portion of income taxes are returned to cities and towns, they will also bear the brunt of this giveaway, which will make it more difficult to provide police and fire protection, better parks, road repairs, after-school programs and other services. Ducey and legislative leaders have hysterically suggested they will make cities and towns whole from their losses for a few years. What happens after that? Well, Ducey won't be governor anymore, so what does he care?
This kind of tax reform, to the benefit of those who truly need it the least, is just insane—and driven entirely because Arizona voters had the temerity to support an initiative that increased income taxes on individuals earning more than $250,000 (or couples earning more than $500,000) to increase funding for education.
Polling done by Phoenix political consultants HighGround—hardly a left-wing bunch—shows that there's little public support for Ducey's plan, especially when voters are asked if they'd like to see the budgets of their local cities and towns slashed.
Given the choice between cutting income taxes and investing more money into education and local cities and towns, 63% said they would rather see investment, while 30% favor cutting income taxes.
The survey of 400 likely 2022 voters, which had a margin of error of plus or minus 4.9%, showed that even among Republican voters, the proposal wasn't all that popular: More than 48% of GOP voters opposed the proposal, while just 31% supported it. Among independent voters, 55% oppose it while just 20% support it. And it's no surprise that among Democrats, support was at less than 12%.
In other words, giving away millions to the wealthiest Arizonans while the state still has big bills to pay to fix schools, roads and a whole bunch more just isn't that popular. We'll see where things go when lawmakers get back next week, but this budget proposal just stinks. Let's hope the holdouts stick to their guns and something more reasonable lands on the table.
