The Arizona Budget Coalition responds to the GOP corporate bailout plan

Posted by AzBlueMeanie:

Update to GOP insane clown posse headed down the wrong track.

On Thursday, along a party line vote, House Republicans rushed through the bogus-named "Jobs Recovery Act," in reality a package of six bills providing tax cuts to large corporations and shifting the property tax burden to residential home owners. The GOP is digging the deficit hole deeper. AZ House, without 1 Dem, OKs tax cuts:

HB 2250 would cut corporate income-tax rates by nearly 30 percent, from close to 7 percent to just 5 percent. Individual income taxes, which are computed on a sliding scale, would drop by 10 percent across the board.

The measure also would phase out the state property tax. And it would shift some of the burden of local property taxes from businesses to homeowners.

Thursday's vote sends the package to the Senate. But it is likely to be held up there until Republicans who control both chambers come up with a plan to deal with the $1.4 billion deficit.

House Speaker Kirk Adams, R-Mesa, who crafted HB 2250 said it is politically necessary to approve future tax cuts now: He said many Republicans, especially in the Senate, will support an immediate tax increase only if future tax relief is assured.

In other words, Grover Norquist will release his minions from their "no tax" pledge only if the sales tax increase is off-set by even larger tax cuts to corporations and the wealthy. This is a violation of their oath of office and constitutes malfeasance in office. This bill does nothing to close the current FY 2010 budget gap and will only worsen revenue in each succeeding year. Tax cuts never pay for themselves or boost future revenue. Tax Cuts Don't Boost Revenues – TIME This is the great lie of supply-side Republican economics.

Bill summary from the Arizona Capitol Times Main Points of the GOP Jobs Bill (H2250):

• Cuts the business property tax assessment ratio from 20 percent to 15 percent over five years, beginning in 2012
• Phases out the state equalization property tax rate over four years, beginning in 2011; it would be completely gone by July 2014
• Cuts the corporate income tax rate from 6.97 percent to 4.5 percent over four years, beginning in 2011
• Cuts the individual income tax rate by 10 percent over four years, beginning in 2011
• Doubles the amount of time a business can pay reduced property taxes in an Enterprise Zone from five to ten years
• Creates a new Arizona Job Training Program for employers who will create new high-wage jobs. Funding for the program will come from a portion of the withholding tax revenues from new high-wage jobs
• Creates the Arizona Opportunity Fund, which allows the state to award grants to build infrastructure or otherwise attract high-wage jobs to the state. It will be funded by money appropriated by the Legislature federal stimulus money
• Creates the Arizona Quality Jobs Program, which would provide quarterly cash rebates to companies that bring new high-wage jobs to Arizona. It would be funded by a portion of the withholding tax revenues from new high-wage jobs

The Arizona Budget Coalition has responded to this "corporate bailout" on the backs of working men and women in Arizona. Arizona Budget Coalition Reax To House Tax Cuts: Package Will "Cost Arizona Jobs":

Reaction from the Arizona Budget Coalition:

The Arizona Budget Coalition (ABC), representing more than 50 organizations around the state standing for jobs, education, and health and human services, decries the passage of HB 2250 out of the Arizona House of Representatives and asks the State Senate to kill the bill.

Scott Washburn, State Director of SEIU Arizona, explains that while the Coalition shares the goals stated in the bill to bring jobs to Arizona, it believes the sweeping tax cuts are not well targeted to economic development and will in fact cost Arizona jobs and economic growth. “Cutting general fund revenues at a time when basic services are already being slashed will make Arizona a less desirable place for business relocation and expansion,” Washburn said.

“Both voters and businesses expect our state to provide the assets we need for a strong economy — assets like roads, parks, health care, and a world-class education system,” said Dana Wolfe Naimark, President and CEO of Children’s Action Alliance. “Twenty years of tax cuts have left us short on these assets and contributed to the deficit we suffer from now. More of the same tax cuts will only make Arizona less competitive.”

According to ASU economists, when inflation and population growth are considered, revenue in the current fiscal year is $2.6 billion less than it would have been had this long series of tax cuts not taken place.

In addition to a long list of rebates, payments, and tax breaks to businesses who move or expand here in the future, HB 2250 includes large and permanent cuts to general fund revenues: cuts in the personal income tax for every household in Arizona, cuts in the corporate income tax for every corporation in Arizona, cuts to property taxes for education for every household and every business in Arizona, extra cuts in property taxes for businesses that will either be paid for by households or the state general fund, and extra cuts in the corporate income tax for certain businesses that sell products out of state.

The tax cuts in HB 2250 would begin in FY 2012 and grow from there. Arizona has a long history of tax cuts with delayed effective dates and phased in provisions. “These tactics make the cuts seem more affordable, “said ABC Steering Committee member George Cunningham, “because legislators don’t have to factor them in to the budget they’re working on right now. But in FY 2012, when these tax cuts begin to take effect, Arizona is still projected to have depressed state revenues, depressed job growth, and multibillion dollar deficits.”

“It’s clear that the sponsors of this bill put low tax rates above everything else,” said John Wright, President of the Arizona Education Association. “Elliott Pollack, the author of the report on which HB2250 is based, warns us that we can’t be ‘number one’ in both low taxes and the things that tax dollars buy, like education and infrastructure.”

“With the sweeping tax cuts in this bill, Arizona announces to businesses all over the country and the world that we are OK with seeing the rate of uninsured kids in our state rise, the children who are products of our education system unable to compete successfully for good paying jobs, our state parks locked up, and our highway rest stops barricaded, “said Timothy Schmaltz, Coordinator of Protecting Arizona’s Family Coalition. “What business would want to relocate to a state like that?”

Naimark pointed out that specific parts of the tax code can be reformed if they are hampering business without sweeping tax cuts that dig our deficit hole deeper. “If legislators want to reduce taxes in one or two areas, then their responsibility should be to make up the revenue somewhere else.”

Washburn concluded: “We ask every member of the House who voted for these tax cuts to stand up and tell their constituents where they will cut the budget next year to deal with the lower revenue.”