The GOP Taliban’s Cult of Tax Cuts Is The Source Of Arizona’s Budget Crisis

AZ BlueMeanie

Dateline 2.16.09 by AzBlueMeanie

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(War correspondent AzBlueMeanie is embedded with the Freedom Fighters of the Arizona Democratic Resistance in the occupied state of Arizona. This dispatch is filed from an undisclosed location within the liberated territories of Baja Arizona)

Arizona's Founding Fathers were progressive populists who followed in the footsteps of the progressive giants of their day, like Republican President Theodore Roosevelt and Republican Senator Robert La Follette. Arizona's Founding Fathers crafted a state constitution which was remarkable in its day for its expression of progressive idealism (it has since been diminished by numerous amendments in the intervening years).

A public education system was of particular importance to the Founding Fathers of Arizona. A unique feature of the Arizona Constitution was Article 10 which established the state land trust, the purpose of which was to finance the public education system in Arizona. The Arizona Constitution also contains an article dedicated entirely to public education, Article 11. This article merits closer examination:

(As a matter of constitutional interpretation the use of the imperative "shall" describes a mandatory act, not a discretionary act. "Shall" commands the state to act, and it may be compelled to do so by a court of law.)

Section 1 provides that "The legislature shall enact such laws as shall provide for the establishment and maintenance of a general and uniform public school system," including kindergarten, grade schools, high schools, industrial schools, the school for the deaf and blind, and universities.

Section 6 provides that "The university and all other state educational institutions shall be open to students of both sexes, and the instruction furnished shall be as nearly free as possible. The legislature shall provide for a system of common schools by which a free school shall be established and maintained in every school district for at least six months in each year, which school shall be open to all pupils between the ages of six and twenty-one years."

Section 9 provides that "The amount of this apportionment shall become a part of the county school fund, and the legislature shall enact such laws as will provide for increasing the county fund sufficiently to maintain all the public schools of the county for a minimum term of six months in every school year. The laws of the state shall enable cities and towns to maintain free high schools, industrial schools, and commercial schools.

Section 10 provides that "The revenue for the maintenance of the respective state educational institutions shall be derived from the investment of the proceeds of the sale, and from the rental" of lands in the state land trust "for the use and benefit of the respective state educational institutions. In addition to such income the legislature shall make such appropriations, to be met by taxation, as shall insure the proper maintenance of all state educational institutions, and shall make such special appropriations as shall provide for their development and improvement.

The Arizona Constitution further provides for a general fund to be financed by taxation to defray the ordinary expenses of the state and for any debt incurred.

Article 9, Section 3 provides, in part, that "The legislature shall provide by law for an annual tax sufficient, with other sources of revenue, to defray the necessary ordinary expenses of the state for each fiscal year. And for the purpose of paying the state debt, if there be any, the legislature shall provide for levying an annual tax sufficient to pay the annual interest and the principal of such debt within twenty-five years from the final passage of the law creating the debt."

For many years both Republican and Democratic legislators alike accepted these constitutional mandates as a given and satisfied their constitutional duty by providing for at the least the minimum expenses of the state each fiscal year. The annual battles that occurred in the legislature were generally over "what should we do?" and "how do we pay for it?" in addressing the demand for government services from Arizona's rapidly growing population. Both political parties were in general agreement as to the "good government" principles of government efficiency and cost effectiveness.

But then along came the "Reagan Revolution" which ushered in the era of the anti-tax and anti-government zealots of movement conservatism. This was not your father's GOP. This new breed of radical Republican does not believe in the "good government" principles of government efficiency and cost effectiveness. They do not believe in government at all. Arizona's constitutional mandates be damned!

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Conservative think tanks like the Heritage Foundation, the Cato Institute and the American Enterprise Institute promoted Arthur Laffer's "supply side" economics theory, i.e., "lowering taxation increases tax revenues," and Arizona Republicans adopted his economic theory as an article of conservative faith. They believe with an almost cult-like fervor that which cannot be proven by empirical evidence. (In 2005, the Congressional Budget Office released a paper that cast doubt on the idea that tax cuts ultimately improve the government's fiscal situation. Even in the paper's most generous estimated growth scenario, only 28% of the projected lower tax revenue would be recouped over a 10-year period.) In fact, tax cuts result in lost tax revenues to the state (only appearing to be offset by rapid population growth which expands the tax base). 

"Not so long ago Arizona earned plaudits for the 'balance' of its [tax] system. Then, Arizona tracked with tax experts’ suggestions that low rates maintained across a diversity of tax bases (including income, property and sales taxes) provide the most stable revenue yields in changing times… State lawmakers’ penchant for handing out tax exemptions to special interests has further disrupted the balance and efficiency of the system." The Revenue Sieve (chapter from "Five Shoes Waiting to Drop on Arizona's Future – APC 2001," by Tom R. Rex, Morrison Institute for Public Policy at ASU, 2001).

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