Living in the State of Delusion

Posted by AzBlueMeanie:

Last week the Arizona House rushed through a package of future tax cuts for corporations and the wealthy, and transferred the corporate property tax burden to residential homeowners and to Arizona's county governments. Just how reckless and irresponsible was this corporate bailout?

New figures on Friday from the Joint Legislative Budget Committee show that tax collections in December were just $715.4 million. That is more than $99 million below the same month a year earlier, a 12.2 percent decline. Economy limping, state tax figures show:

• Overall sales tax collections were 10 percent less than the prior year.

• Individual income tax collections were down by 6.9 percent from December 2008.

• And corporate income tax payments were off by close to 44 percent.

All of that means total revenues for the first half of the fiscal year are now close to $713.5 million below the same period a year earlier.

Of even greater concern is that the collections are about $555 million less than the amount anticipated when lawmakers adopted the budget last summer.

JLBC now projects a $1.5 billion shortfall in the fiscal year that ends in June.

The staff also projects the state will bring in $6.9 billion next year and is on track to spend $9.5 billion, for a $2.6 billion shortfall. AZ Financial Freefall Continues

Read the report yourself: mfh-jan-10.pdf

The corporate bailout package was a "sweetener" designed to attract Republican votes for the temporary sales tax increase called for by the Governor in her latest call for a Special Session. Last year Grover Norquist told his minions that he would release them from their blood oath "no tax" pledge to vote for the temporary sales tax increase if it were tied to a new round of tax cuts for corporations and the wealthy that more than offset the new revenue to be realized from any temporary sales tax. See how this insanity works?

Not only are the taxes for corporations and the wealthy to be reduced, but the property tax burden of corporations is to be shifted to residential homeowners and a regressive sales tax to be imposed that disproportionately impacts lower income earners.

A confluence of events have come together to make passage of referring the temporary sales tax increase to voters in a costly May 18 special election possible in this sixth Special Session today. Sales tax hike may now be put to voters:

"I think the time has come to where it's become 'push to shove,' " Senate Minority Leader Jorge Garcia, D-Tucson, said Monday. He said that, while some Democrats are unhappy with hiking sales taxes, which they believe unfairly hit the poor and middle income families, the alternative is far worse: Having to cut $900 million a year in state services.

"I think we're at the 'shove' now," he said.

In other words, some Democrats are now willing to support the temporary sales tax increase only because it is the only option left to prevent the blood-lust of Grover Norquist Republicans from cutting even deeper into vital government services.

Other key elements of the plan, which have bipartisan support, include:

• Borrowing $450 million against future proceeds from a revamped Arizona Lottery.

• Deferring $350 million in payments due to Arizona public schools this budget year until later this summer, in addition to more than $600 million now in delayed payments.

• A similar delay of paying $100 million due to public universities, which already are going to have to wait for another $100 million owed to them.

• Selling off another $300 million in state buildings on top of $735 million marketed last month, and then leasing them back.

"Even if lawmakers send the tax increase to the ballot and voters approve, it would do virtually nothing to plug the $1.4 billion gap between revenues and expenses for this fiscal year, which runs through June 30. That's because the extra levy would not kick in before June 1. And retailers would not forward what they collect to the state until the following month."

So not only did this incompetent Legislature fail in its primary constitutional duty to pass a balanced state budget last June, it will have dithered and failed to take any meaningful remedial measures to close the budget deficit in the FY 2010 budget before the end of the fiscal year. While this is unconstitutional there is no legal enforcement mechanism in the Constitution to force the Legislature to do its job. The only remedy to Arizonans is to turn these incompetent clowns out of office.

"Economists estimate the recession-caused deficit, which has cut state tax collections, will continue at least into 2014. The temporary tax increase could bring in at least $900 million extra a year to help make up the difference." But that amount would be more than offset by the corporate bailout package approved by the House, designed to be phased in beginning in 2012. We are continuing down the rabbit hole.

We are living in the State of Delusion.

It is time for Arizonans to rise up and to take back their state from the minions of Grover Norquist and the plutocratic corporatists. As Thomas Jefferson long ago warned us:

"I hope we shall… crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country."– Thomas Jefferson letter to George Logan, 1816.