The Farley Report – February 2, 2010

Posted by AzBlueMeanie:

This week's Farley Report:

Remember the classic Bill Murray movie Groundhog Day? Where he keeps re-living the same day over and over again, and eventually starts trying to change his behavior to end the cycle? His attempts never work until he finally decides to do the right thing and take care of the most vulnerable citizens in town and do other kind things to help make his community a better place.

It is SO appropriate that today is Groundhog Day, since we are now in our SIXTH Special Session and are once again considering the Governor's sales tax referral. If only we could skip to the ending of the movie and have the guts to do the right thing for our state by approving a real budget plan that really provides the revenues we need to provide the services our citizens need.

Unfortunately, we seem to be stuck in the middle of the movie where we are changing our behavior in destructive ways, without solving the problem.

About two hours ago the Senate passed a series of special session bills including (for the first time) the sales tax referral with the bare majority of votes — seven Democrats and nine Republicans. This action was indeed different from the past five special sessions.

What was not different was the fact that, even if the sales tax makes it through the House and passes muster with voters on May 18, it will still not fix our deficit.

Everyone in Arizona knows Governor Brewer has been pushing for a three-year, one-cent sales tax proposal and calling it her silver bullet to get us out of our crisis. The problem is, even her own budget proposal admits that the extra billion dollars a year won't even fill one-third of the hole we are in.

Here's just a few examples of what will happen EVEN IF THE VOTERS APPROVE this sales tax:

–> Middle-class and working families will pay more sales tax while big corporations and the rich will pay less, thanks to the soon-to-be-enacted (and permanent) Republican Corporate Bailout Bill (which also will raise homeowners' property taxes).

–> Arizona will be even more dependent on sales taxes than we already are, and we are currently one of the most dependent in the country, a condition that led directly to our sorry fiscal house.

–> K-12 education will be cut by another $750 million next year, leading to class-size increases of 6-10 kids per classroom as possibly thousands of teachers will be fired.

–> 400,000 people will be kicked off their healthcare in the middle of our recession, including 47,000 kids currently on KidsCare.

–> The Department of Juvenile Corrections will be eliminated, with the entire cost shifted to counties.

–> Per-pupil funding at our universities will be cut by 25%.

–> Programs for gifted education, adult education, literacy programs, and All-Day Kindergarten will be eliminated.

–> Cities all over the state will be forced to fire cops and firefighters while raising taxes.

Furthermore, despite the Governor's call for shared sacrifice, she actually exempts mining and rock product companies from having to pay the extra tax — would you like a corporate tax giveaway with your tax increase? I guess some lobbies are more powerful in the executive tower than others.

Yes, the bottom line is that if the Arizona public votes for this tax (at a cost of $8.4 million for the special election), the Governor still wants to cut more than $1.2 billion in education, healthcare, and public safety, all in the next year.

When people find out that we're taking a meat-axe to the state even AFTER raising taxes, I think folks will be angry. How about just fixing the whole problem with revenues that help our state?

Here's just a few things I believe we can do to tackle this crisis without destroying our future:

–> There are more than TEN BILLION DOLLARS in corporate tax loopholes in the sales tax code alone. We can pick and choose to eliminate the top few billion dollars' worth that seem the least justifiable.

–> We can get $400 million a year by enacting a small fee on the production of non-renewable electricity in this state. Half of that would be paid for by the New Mexicans and Californians who buy half our power. Solar and wind energy would not pay the fee, creating incentives for more clean energy jobs.

–> Oregon just passed (by large margins) new taxes to make corporations and the rich pay their fair share. Oregon's voters have traditionally been reluctant to approve new taxes at the polls. Perhaps Arizonans deserve a chance to vote on this type of revenue?

There is a mysterious "secret budget" that is floating around the Capitol right now that seems to have some support from Republicans and Democrats alike. It is a five-year plan that includes some of the Democratic ideas to lower the sales tax rate and broaden the base to services, increase the rainy day fund in the future, protect the poor from the regressivity of sales taxes, and balance the budget long-term. Not all its ideas are good ones in my opinion (such as a tax on food), but it is on balance worth more consideration than it has been given so far.

Governor Brewer has already dropped the three best ideas that used to be in her plan: broadening the base to include repairs, getting rid of the accounting credit that gives $20 million a year to big retailers for filling out their tax forms, and hiring new auditors to collect money from tax cheats. And she no longer wants to do a budget with new revenues by achieving a two-thirds vote in the House and Senate, instead of sending it to voters. She seems to have given up on new ideas just when we need them the most.

It is unclear whether the Governor's special session tax will pass the House this week, but even if it does, it is unclear that voters will agree. Even if we do, harsh cuts to education, human services, health care, and public safety are still coming unless we get something real done right away.

Anybody know Bill Murray? Put him in touch with me. I'd like to invite him to present a meditation on real change on the floor of the House. We need a game-changer here.