COVID-19 & Healthcare

Earlier this year, each  of the editorial board pundits of The Arizona Republic pontificated that Arizona needs to close “tax loopholes” — shorthand for tax exemptions and tax credits — and to raise tax revenues to close Arizona’s budget deficit, which is the result of a structural revenue deficit due to years of tax cuts.

Today, Tim Steller of the Arizona Daily Star joins in their analysis. Steller: Arizona could raise revenue, cut less. Steller blames it all on “politics.”

What is entirely missing from the political punditocracy’s analysis of Arizona’s budget deficit and structural revenue deficit is any mention of what lies at the heart of the problem: Proposition 108 (1992), the “Two-Thirds for Taxes” Amendment, Arizona Constitution Article 9, Section 22. It’s almost as if there is an editorial prohibition against any reporter or pundit mentioning Prop. 108 in their reporting.

I consider Prop. 108 the GOP’s “weapon of mass destruction.” Here is why: it only takes a simple majority vote of the legislature to approve cuts to tax rates, or to enact tax exemptions and tax credits (tax expenditures). But these tax revenue reducers become permanent in practical reality because Prop. 108 requires a two-thirds super-majority vote in both chambers of the legislature to increase tax rates, or to reduce or eliminate any tax exemption or tax credit.

Since Prop. 108 was enacted by voters in 1992, the Arizona legislature has not increased tax rates, and has not closed “tax loopholes” as all the pundits decry that we desperately need to do. A tyranny of a minority of anti-tax zealots in the Arizona legislature are empowered to prevent any such tax reforms: 11 members in the Senate, or 21 members in the House.

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