Farley Report 1/19/10

Posted by AzBlueMeanie:

This week's Farley Report:

The Capitol is emptying out a bit this week: Three Republican Senators have already announced their intention to resign and run for Congress — Paton against Giffords, and Waring & Gorman for the vacant seat left by Shadegg's retirement.

Perhaps they were not looking forward to spending the rest of the session dealing with budget issues. Here's hoping that four more Republican Senators follow suit, giving Democrats a temporary Democratic majority in the State Senate until their replacements are named!

Last year the Governor decided to wait until June to issue her proposed budget. This year, it's right on time. Unfortunately, it's wrong on almost everything else.

Before we get to the bad news, let's start with the three things she did right. She did give a nod to a few Democratic ideas for revenues. She wants to slightly expand the sales tax to cover certain repair services, hire a few more auditors to bring in money from tax cheats, and stop the sales tax accounting credit which gives $20 million a year back to mostly big retailers as payment for filling out their tax forms.

These are good ideas, although there are a whole lot of additional ideas (billions of dollars worth, in fact) for closing tax loopholes that should also be on the table. Why only choose repair services, which would bring in $13 million a year? Why not also tax extended warranty sales — the ones the Best Buy salespeople pressure you to buy when you get a big-screen TV? That would bring in $30 million. Or country club memberships? Or any of thousands of other products and services currently exempted from taxation?

She also is pushing her temporary one-cent sales tax increase to shore up revenues, but it is unlikely that this would be sent to her desk without being accompanied by the big tax giveaway package being heard in the House this Thursday. That's the one I previewed last week that will slash corporate income tax which shifting property taxes off big businesses and onto residential homeowners, including retirees on fixed incomes. This package combined with a sales tax increase would simply mean a shift off the rich and onto the middle class.

The rest of the Governor's budget is an all-out attack on the middle class, seniors, kids, education, cities and counties, jobs, hospitals, health care, and our future. Yes, she proposes a billion dollars in new revenues, (and $2 billion in new debt) but she still proposes more than a billion in new cuts, including $750 million to education. We pay more and get less. Here are a few examples of how we all get whacked:

–> All-day Kindergarten will be eliminated (although local schools will be able to charge parents for it). Yes, in the middle of the worst recession in AZ history when middle-class families are struggling to keep our homes, those with Kindergarten kids will be forced to pay tuition for their child's public school education or pay childcare for the half-day they won't be at school. This is a direct tax on young families which also leaves kids less prepared for the rest of their school career.

–> Gifted programs will be ended, as will programs for AIMS preparation, Adult Ed, teacher training, and more. Governor Brewer often talks of not "eating the seed corn", but I don't see how cutting gifted programs does anything but sell out our future.

–> University funding will be cut to 2006 levels, which cuts per-pupil support by 25% over Fiscal 08. How will we create a strong economy and jobs in the coming decades without well-funded universities?

–> The Departments of Environmental Quality, Tourism, and Water Resources will be required to self-fund. While this may be a good idea in some ways, the Legislature has just finished raiding most of  these same departments' funds in the past two years, and there is no reason to think they will not do the same in the future. Our State Parks Department was completely self-funded until last month, when the Legislature swiped all their funds and now they are closing 21 out of our 30 state parks, all of which generated positive revenue for Arizona.

–> The Arizona Department of Juvenile Corrections will be eliminated immediately, and counties will be forced to bear all the costs of incarcerating juvenile offenders, as well as costs for several other programs that the state has always paid for. Counties which have their own budget crises right now. Does the Governor not think that Arizona citizens also live in Arizona counties?

–> Any programs funded by the Lottery will be ended, which in many cases will end rural transit in Arizona.

–> As I explained last week, she will kick 310,500 people below the poverty line off of their health care. She will also kick all 46,800 kids off of KidsCare and 17,400 seriously mentally ill people off their services. She claims this will save $700 million in General Fund costs, but admits we will lose $738 million in federal matching funds, under current law. She does not take into account the new round of stimulus money, now working its way through Congress, for which we would no longer be eligible if she gets her way. That would lose us another $2 billion. All those Arizona citizens losing health care, hospitals going under, and our deficit hole gets $2 billion deeper as a bonus.

This is leadership?

In short, the Governor's budget–especially combined with House Republican efforts to increase tax giveaways to big corporations–would be an unmitigated disaster that will worsen our unprecedented crisis.

And she wants to find 2/3rd majorities in each house to enact it all right away, but has refused Democrats' requests to sit down and negotiate. Instead, her campaign has sent out press releases from proxies to accuse Democrats of not wanting to negotiate.

Arizonans are tired of political games, but it appears that is all we are getting from Republicans this political season.

Arizona deserves better.