The Jan Scam Tax Plan

Posted by AzBlueMeanie:

Jan Brewer

David Safier has done an excellent job of reporting on the developing plan of our accidental governor, Jan Brewer, to hold a special election later this spring to "let the voters decide" on various tax and spending issues. I will add some additional comments.

Let's begin with the obvious. If Arizona does not have enough money in the budget for essential government services, then it does not have money in the budget for an unnecessary and costly special election that will not even begin to address the fundamental problem of our state budget: an outmoded tax structure that is badly out of balance and overly dependent upon the regressive use tax (sales tax). Jan's plan reportedly is to "temporarily" increase the state sales tax, which will only make the state even more dependent upon this regressive sales tax. Really? That's your plan Jan?

The plan almost certainly will not include repealing any of the numerous special interest tax exemptions from the state sales tax, and almost certainly will not include repealing or reducing any special interest income tax credits (for private school tuition and after school programs, for example) that are sacred cows to the GOP. Repealing tax exemptions and income tax credits would bring in about the same amount of tax revenue as an increase in the sales tax, but the special interests will never permit their sacred cows to be subjected to the whim of the voters. (Voter approved measures cannot be reversed by an act of the Legislature).

Repealing the 2006 income tax rate reductions will not be permitted to appear on the ballot either. Nor will restoring Arizona's state property tax, or even retaining the presently suspended state equalization property tax (for school construction). Arizona's excessive business property tax on equiment cannot be addressed without first offsetting this tax revenue through other taxes. Arizona's motor vehicle registration fee is completely out of whack with what other states do but cannot be addressed without first offsetting this tax revenue through other taxes as well. The state gas tax can be increased, but it is currently a dedicated tax for road construction and maintenance only.

Then there are the lame excuses given for calling a costly special election in the first place. According to the Arizona Daily Star AZ legislators are cautious on sales-tax election talk:

Taking the issue to the ballot is likely the only way to make it happen.

It requires the votes of two-thirds of lawmakers to increase taxes, and more than a third of lawmakers have signed "no new taxes" pledges.

Sending the issue to the ballot, however, needs only a simple majority. And punting the issue to voters could prove more politically acceptable.

Let's take each of these lame excuses one at a time. I have previously addressed the two-thirds super majority rule in Goo-Goos Gone Bad: " Prop. 108 (1992). This measure amended the Constitution to require a two-thirds super majority vote of the legislature to pass any increase in taxation levels or a reduction in credits and exemptions." If you want to call a special election Jan, then simply put the repeal of this undemocratic and highly destructive constitutional provision on the ballot. Repealing this provision would restore to the Legislature the fiscal tools it needs to enact badly needed and long overdue comprehensive tax reforms by a simple majority vote.

I have also previously addressed the irresponsible "no new taxes pledge" in Enemies of the State. Arizona Republicans who have sworn their allegiance to Grover Norquist and his Americans for Tax Reform are more afraid of facing a primary challenger from the rabid right-wing fringe of their party for violating this irresponsible tax pledge and being targeted for defeat by Grover Norquist and his Americans for Tax Reform (and the Club for Growth) than they are concerned about honoring their oath of office and performing their constitutionally prescribed duties. Their own partisan political self-interest takes precedence over the best interests of the state of Arizona.

"Punting" the issue to voters for political cover is the hallmark of political cowardice. We have a representative democracy, not a direct democracy. We pay our legislators (sort of) to make hard choices and to make decisions for us – that is what we elect them to do. There have been far too many initiatives and referendums on the ballot in recent elections because our cowardly legislators do not want to make the hard choices and be held accountable by their constituents. "Don't blame me, blame the voters, they're the ones who voted for it" is their lame defense. Arizonans may as well institute a form of direct democracy by setting up a "vote by phone" system to allow the citizens of Arizona to vote directly on issues like they do for their favorite American Idol contestant. Why do we even have a Legislature if it is not going to do its job?

The real reason for this special election, however, is more nefarious. It is not about raising the sales tax (Jan knows this will be rejected by the voters). No, this is really about convincing the voters to remove the legal protections from voter approved special funds so that the Legislature can raid the special funds. As reported by the Arizona Republic Governor may put a tax hike to the voters:

The state's fiscal woes are compounded by the 1998 Voter Protection Act. It requires a three-quarters vote of the state House and Senate before lawmakers can make changes to laws approved at the ballot, and any change may only "further the intent" of Arizona voters.

That means voter-approved initiatives such as First Things First are largely off-limits to legislative cuts. In 2006, First Things First succeeded in getting Arizona voters to approve an increase in tobacco taxes to fund a series of programs for early-childhood education. As of the end of fiscal 2008, the programs had more than $230 million in their coffers – funding now being eyed by Brewer's allies and legislators looking for alternatives to deeper cuts in other state services.

* * *

If the ballot proposal being pondered by the Governor's Office was approved by voters, legislators would have access to the First Things First funding, as well as other voter-approved ventures ranging from land conservation to the state's Clean Elections system.

Finally, Arizona has a "single subject" rule for ballot measures. This means that voters would be presented with a "cafeteria plan" of confusing ballot options. Conceivably the passage of any one ballot measure could be made contingent upon the passage of another ballot measure so that the defeat of any one measure would spell defeat for the entire plan. Alternatively, voters may selectively protect certain special funds from being raided by the Legislature and not others and reject the sales tax increase, which would leave the state still short of tax revenues. So what was the point of the special election? The cost of the special election would only have put the state even further into the hole.

All in all, the Jan scam tax plan is a terrible idea. Arizona will not solve its budgetary problems until our Legislature decides to get serious about enacting badly needed and long overdue comprehensive tax reforms. But our Republican legislators are ideologically opposed to "do the right thing." And there, dear Brutus, is where the fault lies.

3 thoughts on “The Jan Scam Tax Plan”

  1. Read the Arizona Constitution my friend (below). In Arizona all political power is vested in its citizens, not our elected representatives.

    Initiatives that provide for specific government programs and specific funding sources are a right reserved to the people in the Arizona Constitution and cannot be amended or repealed by our elected representatives (which is what the proposed special election proposes to do). Your analysis is inaccurate.

    What makes Prop. 108 so offensive to Arizona’s constitutional purpose and scheme is that it empowered a small number of elected representatives to hold a majority of the Legislature and the citizens of Arizona hostage to a “tyranny of the minority” of ideological extremists (as recently occurred in California). This violates the fundamental right that all “political power is inherent in the people.”

    Moreover, Prop. 108 violates the fundamental principle of a republican democracy: “The first principle of republicanism is that the lex majoris partis [majority rule] is the fundamental law of every society of individuals of equal rights…,” and “I subscribe to the principle, that the will of the majority honestly expressed should give law.” — Thomas Jefferson

    The reason we have so many initiatives in Arizona is precisely because the people do not believe that the Legislature is doing its job and they exercise their reserved constitutional powers to enact the laws voters desire. The citizens wanted education and health care spending, and they provided dedicated revenue funds for it.

    Arizona Constitution

    Article 2, Section 2 provides that “All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights.”

    Article 4, Part 1, Section 1 provides, in part, that (1): “[t]he people reserve the power to propose laws and amendments to the constitution and to enact or reject such laws and amendments at the polls, independently of the legislature; and they also reserve, for use at their own option, the power to approve or reject at the polls any act, or item, section, or part of any act, of the legislature.”

    (2) The first of these reserved powers is the initiative.

    (3) The second of these reserved powers is the referendum.

    6.A. The veto power of the governor shall not extend to an initiative measure approved by a majority of the votes cast thereon or to a referendum measure decided by a majority of the votes cast thereon.

    6.B. The legislature shall not have the power to repeal an initiative measure approved by a majority of the votes cast thereon or to repeal a referendum measure decided by a majority of the votes cast thereon.

    6.C. The legislature shall not have the power to amend an initiative measure approved by a majority of the votes cast thereon, or to amend a referendum measure decided by a majority of the votes cast thereon, unless the amending legislation furthers the purposes of such measure and at least three-fourths of the members of each house of the legislature, by a roll call of ayes and nays, vote to amend such measure.

    6.D. The legislature shall not have the power to appropriate or divert funds created or allocated to a specific purpose by an initiative measure approved by a majority of the votes cast thereon, or by a referendum measure decided by a majority of the votes cast thereon, unless the appropriation or diversion of funds furthers the purposes of such measure and at least three-fourths of the members of each house of the legislature, by a roll call of ayes and nays, vote to appropriate or divert such funds.

  2. Let me see if I understand:
    Prop 108 passed by the voters is “undemocratic and highly destructive constitutional provision” and needs to be done away with; but the the 1998 Voter Protection Act and First Things First – also passed by the voters – needs to be protected?
    The so called Voter Protection Act is the undemocratic and highly destructive constitutional provision. Legislators are elected for a reason. If they don’t collectively pass a measure you like or kill a measure you don’t like – that does not mean they are not doing there job….it means they are. If you dont like it – either run for office under the other fiasco of an initiative (“Clean” Elections) or work to get that person out of office.

  3. “If you want to call a special election Jan, then simply put the repeal of this undemocratic and highly destructive constitutional provision on the ballot. Repealing this provision would restore to the Legislature the fiscal tools it needs to enact badly needed and long overdue comprehensive tax reforms by a simple majority vote.”

    THANK YOU, Blue Meanie! I made the same point in a response to one of David’s posts a few days ago. I am waiting for an elected official to demonstrate the political courage and vision required to say what you just did. Someone needs to step up to the plate in Phoenix!

    Geez, we don’t even require Congress to have a supermajority to declare war!

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