With Massive Tax Cuts from Feds, Big Corps Don’t Need AZ Tax Giveaways (video)

Vice presidential candidate Sarah Palin called herself a “Mama Grizzly” because she said she would fight like a Mama Grizzly to protect her children.

Although “Mama Grizzly” was a catchy marketing slogan for the folksy rural mayor from Alaska, the Republican Party has never embraced the idea of protecting children after birth or helping families. Unfortunately, this week Congressional Republicans took their disregard for middle class families one step further by voting for billions of dollars in tax cuts for big corporations and for the richest Americans– while saddling our children and grandchildren with massive debt to pay the bills in the future.

Hmmm… let’s see… what to do… pass legislation that would actually help millions of Americans– like equitably funding public education across the country or fixing the Affordable Care Act (to make it affordable) — OR cut taxes for your rich donors? Cut taxes, of course! With party-line votes to pass the Tax Cuts and Jobs Act, Congressional Republicans have shown that they are far more interested in enriching the billionaire class than in improving the lives of everyday Americans. Universal healthcare? Food Security? World-class public education? Safe roads and bridges? Financial stability for the middle class? Meh. Congressional Republicans don’t care about pursuing the People’s To-Do List.

Although the majority of Americans see the tax cut bill as unfair, Republicans are on course to deliver the biggest Christmas present… ever… to the 0.01%.

In my opinion, the passage of this massive wealth transfer bill underscores the need for a few new progressive action items…

Big corporations don’t need any more tax cuts from Arizonans. In 2017, Arizona’s $13 billion in tax cuts hit the fan in the Legislature. What sense does it make to give away $13 billion in tax revenue and leave only $9.8 billion to run the state? We have the money for great schools, jobs, and roads. The problem is that politicians are giving away your tax dollars in the name of economic development. Trickle-down economics is a failed economic strategy that has left Arizona’s recovery from the great recession lagging behind other states. When you’re in a hole, stop digging. Arizona can’t afford to give away any more money. Corporate welfare is breaking the bank.

In 2017, Progressives and Libertarians stopped almost all of the corporate welfare bills in the Arizona House. Progressives– the real Mama Grizzlies– drew a line in the sand and said that we wouldn’t give any money away until all of the school funding had been restored. (Prop 123 was not enough.) As for the Libertarians and fiscal conservatives, my impression is that they have been voting “no” on spending bills for years. What made the difference in 2017 was that the Progressive Democrats also voted “no.”

The election of 10 women to the Arizona Legislature in 2016 helped shift that corporate welfare vote and the culture. The Arizona Legislature is now 40% women– the highest percentage of any state. Most of us are Moms or Grandmas, and many of us (myself included) also have been small business owners. In 2017, we fought for funding education and against giving taxpayer funds away unnecessarily. We are the Mama Grizzlies.

I am proud of the tax giveaway bills that we were able to stop in 2017, but we must go farther in 2018. Thanks to future tax cuts passed under Governor Jan Brewer, Arizona will start the next budget negotiation cycle $200 million in the hole– before any state budget cuts or changes related to the Tax Cut and Jobs Act kick in.

The Republicans can’t cut their way out of this hole. The Arizona Legislature must review all of the tax cuts and tax credits and eliminate the ones that we don’t need. Such a bill passed both the Arizona House and the Senate in 2017 but was vetoed by Governor Ducey.

It’s time for fiscally responsible government in Arizona. We don’t have that when we are upside down on our mortgage.

Our country desperately needs campaign finance reform. It has been widely reported that wealthy donors were threatening to pull their financial backing if Congressional Republicans failed to accomplish anything in 2017– thus the rush to pass tax cuts without proper hearings, public input, parliamentary mistakes, math errors– or reading it! Forty percent of all political donations come from the richest 25,000 Americans, and in 2016 their average donation was $108,459. Far too many politicians are working for the donor class and not for us.

Eighty-four percent of Americans say that money has too much influence in our political system, and 85% want either “fundamental changes” or a complete rebuild of campaign finance laws. So… why isn’t the Congress or the Arizona Legislature doing this? Because too many politicians put wants of their campaign donors before the needs of the people.

What can be done in Arizona? In 2013, Arizona Republicans dramatically increased campaign finance donation limits from the $488 maximum per person for the entire election cycle (primary + general election) to $2500 from individuals and $5000 from some political action committees– for each election in the cycle. HB2593 raised the maximum individual donation for state and Legislative races to $5000/person and the county races to $6250/person.

According to a Demos report on campaign financing, people who donate more than $5000 are considered “elite” donors. Arizona is a low-wage state, and Tucson has a 25% poverty rate. How many elite donors do we have here? Look at the Pima County Campaign Finance Reports for the 2016 supervisors election; it will tell you which local elite donors prefer higher sales taxes and which prefer higher property taxes. Besides promoting big-money politics and bidding wars for politicians, these high campaign finance limits promote out-of-state contributions. Check out Congresswomen Martha McSally’s campaign finance reports; she is heavily sponsored by out-of-state interests. Currently, the US political system is all about the money.  I think it should be all about the people and what is good for us as a community, as a society and as a country.

I propose repealing HB2593 which raised the maximum campaign donation limits, and returning the campaign finance limits to the original amounts. I also think we should look at repealing SB1516, passed by the Republicans in 2016. This bill hurts campaign finance transparency and makes it more difficult to figure out the source for donations.

Clean Elections should be expanded nationwide. The only way we can take back our democracy and our country is to end Citizens United and declare that money is not speech and corporations are not people. A nationwide clean elections system would level the playing field and dramatically diminish the influence of money on our government.

Our system of overly-expensive, privately-funded political campaigns has forced candidates to shift their focus from meeting voters to meeting donors and raising money. Congressional candidates report spending in the neighborhood of three hours per day calling donors for money. Even when they are in DC, our Congressional Representatives and Senators spend hours of each day doing “call time.” Arizona’s Clean Elections System, which is available to all Legislative and Statewide candidates, requires candidates to collect a minimum number of $5 donations to qualify for state funds (roughly $16,000 for the primary and $24,000 for the general election for Legislative candidates). Going door-to-door, tabling at libraries, attending events, or hosting house parties to collect the $5 contributions puts clean candidates in front of their voters. For clean candidates, outreach efforts focus on people who can actually vote for them. In the Arizona Legislature, campaign financing is all over the map. Some current representatives were elected with war chests of less than $1000 while others raised over $200,000 to get elected, but those are the outlyers. With $4300 in seed money, a few hundred in “family money,” and the state funds, Clean Elections candidates have approximately $45,000 to run a campaign. (The City of Tucson’s Clean Elections System is similar to the state system but a bit more generous.)

A 2016 report by Demos shows the influence of money in politics and also analyzes the differences between the wealthy donor class and the rest of us. Here are a few examples from this report:

Who is represented in the donor class? 

• Only 3 percent of the U.S. population possesses more than $1,000,000 in wealth. Among congressional donors giving more than $5,000, 45 percent are millionaires.
• While three-quarters of the adult population is white, and about 63 percent of the total population is white, 91 percent of federal election donors in 2012 and 92 percent of donors in 2014 were white. Among donors giving more than $5,000, 94 percent were white in 2014 and 93 percent were white in 2012.
• Men make up slightly less than half of the population, but comprise 63 percent of federal election donors. The pool of donors who give more than $1,000 has less gender diversity, with men making up 65 percent of donors giving more than $5,000.
• White men represent 35 percent of the adult population, but comprise 45 percent of donors and account for 57 percent of money contributed.

Who contributed to the 2016 presidential election?

• White men accounted for 48 percent of presidential donors in the period of the 2016 election cycle studied (January 1, 2015 – July 31, 2016). Sixty-four percent of Trump’s donors were white men compared to 33 percent of Clinton’s donors.
• Both 2016 presidential candidates relied on the very wealthy. Millionaires make up 3 percent of the adult population, but 42 percent of the money Clinton raised and 27 percent of the money Trump raised came from millionaires. A third of money raised by both candidates came from Americans with a net worth between $300,000 and $1,000,000.

It is obvious that we need campaign finance reform at the national level, but what can be done in Arizona now? In 2017 and again in 2018, I have proposed expanding the Clean Elections System to county races (like Board of Supervisor) and unpaid boards. There is no reason why someone running for a seat on an unpaid board– like local school boards– should be soliciting $5000 donations.

Economic development has to go beyond tax giveaways. We can boost Arizona’s economy without raising taxes and without giving taxes away.

Arizona– and the US– can no longer afford trickle-down economics. Our state’s current economic development system is based upon giving tax money away or excusing taxes. The hope is that giving big corporations extra cash will encourage them to invest, innovate and create jobs. “Corporate tax cuts will create jobs” sounds good, but in reality, this multi-billion-dollar strategy has fallen short of the promises in Arizona and other tax-cutting red states like Kansas and New Jersey.

Along the campaign trail, I proposed establishing a state-based public bank to promote economic development by partnering with community banks to give out low-interest or no-interest loans to small, local businesses for expansion; to entrepreneurs for venture capital; to college students for affordable loans; and to local governments for infrastructure projects. Lending money locally through a public/private partnership between the state and community banks would create jobs across the state and create a sustainable economic development loop. The City of Tucson partnered with Alliance Bank to create a public banking model with its community banking project. The Water Infrastructure Financing Authority (WIFI) offers low-interest or no-interest loans to municipalities and counties to build or improve their drinking water and systems. WIFI has been funding these loans nationwide for 25 years, and it works.

What can we do differently in Arizona to create economic vitality and jobs? I plan to propose a feasibility study for a public bank (again) in 2018; gathering data on where Arizona is financially will show us where improvements can be made and identify how a public bank could help. Arizona should watch public banking developments in New Jersey, where they elected a governor who ran on a public banking platform.

I also believe we should look at a limited public banking model as a first step. Vermont created a “10% for us” campaign that promoted using 10% of an established economic development fund to bankroll a public banking project. What if Arizona took 10% of the rainy day fund and used it to fund low-cost small business loans or infrastructure projects? Remember, these are loans… not handouts. A “10% for us” loan program would have to be structured to make a modest return on investment, which would grow the pot of money for loans, while not depleting the rainy day fund.

In addition, I am proposing that the Arizona Legislature return to the practice of funding seed grants for research. Seed grants to young scientists allow them to gather preliminary data which can be used to apply for larger grants from the National Institutes of Health or other granting organizations. Between 1984-94, the state funded hundreds of research seed grants through the Arizona Disease Control Research Commission (ADCRC). According to the Arizona Cancer Center’s FY94-95 Annual Report, ADCRC had a “four-dollar return for every dollar invested in research”. In 1994, the Arizona Legislature shifted ADCRC funds and dictated that only tobacco-related research be funded. I think the seed grant program should be restored. There is a direct economic development impact between small seed grants and successful competition for larger national grants. Tucson needs good-paying jobs for our college graduates. Securing seed grants and subsequent larger grants would be a huge boon to our local job market and to the state.

There are paths to economic development that don’t focus on giving money away.

The passage of the Tax Cuts and Jobs Act by Congress underscores the need for states like Arizona to think outside of the box in 2018. For a stronger and more financially stable future, Arizona must move beyond elections stoked by big-money donations and beyond economic development strategies based on giving money away. It’s time for a new paradigm.

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