brewer

Arizona Republic reporter Dan Nowicki writes that Senators John McCain and Jon Kyl oppose the sales tax increase that the legislature referred to the May 18 election ballot.

I’m not surprised. Both McCain and Kyl have been pretty darn solid on not raising taxes.

What is more surprising, as I have blogged before, is that a Republican Governor is supporting a tax increase, particularly in this economic environment.

Predictably, the Yes on 100 crowd “couldn’t be more disappointed.”

Eh, what do you expect? Did you really think that two Senators with fairly consistent “A” ratings from National Taxpayer’s Union would support a tax increase?

Buz Mills has officially launched his campaign for governor with a $2 million splash. If Clean Elections matching funds are shelved by the courts, this $2 million, and the additional money he is expected to put into the race, gives him a huge money advantage over Governor Brewer and Treasurer Dean Martin.

He will need a lot of money to introduce himself to voters. Brewer and Martin have near universal name ID among Republican primary voters, so they can spend their money on messaging and voter ID.

Mills entry into the race will probably hurt Martin’s chances by adding another person to the mix of the “anti-Brewer” vote and Mills also greatly diminishes John Munger’s chances.

State Treasurer Dean Martin officially launched his campaign for Governor, a mere two days after Governor Jan Brewer delivered her state of the State address.

Martin’s entry into the race deeply complicates Governor Brewer’s ability to get elected of her own accord to the seat that she inherited when former Governor Janet Napolitano left to head up DHS.

Martin is the first “equal” to enter the race against Brewer. He has been elected statewide, has phenomenal name ID (doesn’t hurt that he shares a name with a popular movie star… ain’t that a kick in the head) and has a compelling personal story.

The Governor’s allies will dismiss Martin as young, too inexperienced and not serious, but he’s been underestimated before, to his opponents’ peril.

The wild card in the race will be Buzz Mills and his money. Particularly if the Arizona Supreme Court strikes down the matching funds provision of Clean Elections.

However, don’t underestimate Governor Brewer. She knows how to throw an elbow when needed. Just check out this line from her state of the State address:

Wrong, is arguing “the system worked” — when evidence to the contrary is everywhere and obvious.

One thing is certain, it’s going to be a very interesting Republican primary election. There will be contested elections in most statewide races, the U.S. Senate race, at least three Congressional districts and a good number of state legislative seats.

The Arizona Republic editorial board has opined in today’s editorial that Senate President Bob Burns did the right thing by dissolving the committee that was chaired by Senator Ron Gould because of his outspoken opposition to referring a sales tax increase to the ballot to deal with the mounting budget deficits facing Arizona.

That in and of itself was fairly unremarkable. The shocker was this line:

The sticking point for the special session is what else would be on the agenda. If lawmakers can agree on further spending cuts, they should do it now, so the reductions can be spread over more of the fiscal year.

Whoa! Stop the press! The Repblic’s editorial board thinks we should cut spending as soon as possible to spread the savings? We do live in strange times.

“The only poll that counts is the one taken on Election Day.”  It’s a line used thousands of times a year, and I’m pretty sure it was first used by the late Stephen Shadegg – campaign extraordinaire and father of Arizona Congressman John Shadegg.

So the latest poll to pop up, showing Goddard wiping the floor against any Republican in next year’s Governor’s race, should be taken with a grain of salt… or better yet, with a salt lick.

Here is the totality of what you need to know about the efficacy of the poll:

“The pollster is known as a Democratic firm, and the survey was automated and done via telephone.” (emphasis added)

So this was an autodial, robo-call?  It is a known fact that Republicans have less tolerance for automated phone calls than Democrats (ok, maybe not a “known fact” but anecdotally, it takes more calls to Republican households than Democrat households to get the same number of respondents on a robo-call survey – trust me, I’ve seen it.)

Given that this was an autodialed robo-call, (which would cost all of about $500 to conduct) I find it a little surprising that Arizona Republic reporter Matt Benson would write on it – and wait until the 11^th graph of the story to indicate that it was a robo-call survey. 

I’ll make Matt a deal – I’ll commission a robo-call survey of 600 Arizonan’s and I’ll give him the exclusive to write the story – which I expect to be as long as this one.

You’ve got my number Matt.

 It is said that when Walter Cronkite returned from a trip to Vietnam and reported that the war was unwinnable, President Lyndon Johnson said, “If I’ve lost Cronkite, I’ve lost America.”

Conservative holdouts in the Arizona Legislature, who oppose the budget deal because of the sales tax referral, may be in the same position.  The editorial page of the Wall Street Journal has for years been the conscience of fiscal conservatism and the leader in reducing taxes.  They have editorialized that the deal is a good one, particularly to retain and attract business to the state by reducing business and personal income tax and property tax reform.  They reason that those are easy trades for referring the sales tax to the ballot.

The operative paragraph reads:

Republicans control both houses of the Arizona legislature, and as we went to press the main obstacle to passing the reform was the Arizona Senate’s antitax conservatives. They oppose the higher sales tax. These Republicans should look to one of the triumphs of the Reagan Presidency, the 1986 tax reform, which broadened the tax base but substantially lowered tax rates and thus sustained the 1980s expansion.

When you’ve lost the WSJ editorial page, you’ve lost your leverage. 

Arizona’s Budget Breakthrough

An alternative to California’s tax and spend model.

Perhaps states are starting to learn the right fiscal lessons from the red-ink blowouts in high-tax California and New York. Today, the legislature in Arizona will vote on a tax reform designed to entice more employers and high-income taxpayers to the state. Sponsored by Republican Governor Jan Brewer, the plan would cut state property taxes, the corporate tax and personal income taxes, in exchange for a temporary rise in the sales tax.

Most economic studies agree that states have more jobs and higher income growth when they tax consumption rather than savings, investment and business profits. This explains why most of the nine states with no income tax at all—such as Texas, Florida and Tennessee—have been economic high-flyers in recent decades.

Ms. Brewer’s proposal reflects this economic logic. Effective January 1, 2011, her plan would reduce the state’s corporate income tax rate to 4.86% from 6.97%, which would be one of the largest business tax cuts in the nation in recent years. The proposal also cuts all personal income tax rates by 6.6%, thus lowering the top marginal rate to 4.24% from 4.54%. A hated statewide tax on commercial and residential property would also be abolished.

Arizona has been hit especially hard by the housing slump, and its budget woes were compounded thanks to former Governor Janet Napolitano’s spending spree before she joined the Obama cabinet. On her watch the budget grew by more than 50% in five years—to $10.2 billion from $6.5 billion in 2004. The state now has a $1 billion budget gap, and to close it the legislature will also vote on a one percentage point increase in the sales tax to 6.6% in 2010 and 2011; in the third year the sales tax would fall to 6.1%, and in the fourth year would revert to its current 5.6% rate.

We’d rather see the legislature cut more spending than raise the sales tax, but on the other hand the sales tax would only take effect if it is approved on the November ballot. The political class is giving voters a say in the matter. The sales tax increase also has the advantage of a built-in expiration date, while the tax cuts are permanent.

Democratic opponents are calling this a tax giveaway to big business. But lawmakers needn’t apologize for trying to retain Arizona’s status as a business-friendly state—particularly when jobs are so scarce. Small employers also benefit from the lower property tax rates and the personal income tax reductions. Lower tax payments will enable them to reinvest more in their enterprises.

The opponents should consult a new study of state business taxes by former U.S. Treasury economist Robert Carroll for the Tax Foundation. He examined 50 states and found that states with lower corporate tax rates have higher wage gains and more productivity over time. This tax cut sounds like a high-return investment.

Republicans control both houses of the Arizona legislature, and as we went to press the main obstacle to passing the reform was the Arizona Senate’s antitax conservatives. They oppose the higher sales tax. These Republicans should look to one of the triumphs of the Reagan Presidency, the 1986 tax reform, which broadened the tax base but substantially lowered tax rates and thus sustained the 1980s expansion.

Arizona has the chance to be the anti-California, closing the budget deficit by growing the economy, not by raising taxes. We hope legislators don’t blow it, because the U.S. desperately needs an alternative to the tax, spend and tax again philosophy of Sacramento and Albany.

The Arizona Legislature and Governor Brewer are trying to solve the budget crisis.  It would have been “easy” if the legislature had just done what the Governor wanted – raise sales taxes.  But a funny thing happened on the way to a budget deal.  38 legislators had signed the “Taxpayer Protection Pledge” sponsored by Americans for Tax Reform, a pledge that has been around for more than two decades and signed by literally thousands of state and federal candidates and office holders in that time span.

You see, ATR’s chief Grover Norquist deemed a referral of a sales tax as breaking the pledge.  So legislators were very reticent to refer the tax without figuring out a way to do it within the confines of the pledge.  They eventually found a way to do it and get ATR’s blessing – by coupling it with tax relief on family and business income.

This is why “special interests” have a role in public policy.  ATR’s pledge means something, because if you break it, there could be consequences.  And if you don’t take it, you may never be elected.  And in this case, the “special interest” was taxpayers.  So as a taxpayer, I want to thank ATR for getting us a better budget deal.

Congressman Scott Garrett is a true believer. He is one of the few in Congress who not only is a principled conservative, he actually acts like it all the time.

You’ll recall that Sen. Jon Kyl made the comment that the stimulus money wasn’t working.  In reaction, Secretary of Transportation Ray LaHood sent a letter to Governor Jan Brewer asking if she agreed with Sen. Kyl and told her he would be happy to withhold stimulus dollars from Arizona.  It was an outrageous letter and Scott Garrett takes LaHood to task for it.  This is a must see video passed on to me from a good friend of mine on the Hill.

U.S. Department of Transportation Secretary, Ray LaHood (former Republican Congressman from Ill.) pulled one of the more outrageous acts of arrogance I have seen from a bureaucrat in a long time.  After Sen. Jon Kyl criticized the lack of stimulus coming from the “Stimulus” funding, LaHood wrote a letter to Gov. Brewer asking if she agreed with Kyl and if she prefers “to forfeit the money we are making available to the state, as Senator Kyl suggests, please let me know.”

George Will had lunch with LaHood a couple months ago, and then wrote about it:

LaHood, however, has been transformed. Indeed, about three bites into lunch, the T word lands with a thump: He says he has joined a “transformational” administration: “I think we can change people’s behavior.” Government “promoted driving” by building the Interstate Highway System—”you talk about changing behavior.” He says, “People are getting out of their cars, they are biking to work.” High-speed intercity rail, such as the proposed bullet train connecting Los Angeles and San Francisco, is “the wave of the future.” And then, predictably, comes the P word: Look, he says, at Portland, Ore.

Riding the aforementioned wave to Portland, which liberals hope is a harbinger of America’s future, has long been their aerobic activity of choice. But LaHood is a Republican, for Pete’s sake, the party (before it lost its bearings) of “No, we can’t” and “Actually, we shouldn’t” and “Not so fast” and “Let’s think this through.” Now he is in full “Yes we can!” mode. Et tu, Ray?

McCain has now weighed in on LaHood’s childish letter to the Governor:

“That is one of the more arrogant and elitist statements that I’ve ever heard,” McCain, R-Ariz., told The Arizona Republic during an interview in his Capitol Hill office. “It’s not their money; it’s the money of the Arizona taxpayers. And they are making the money available to our state? Since when do they have that authority? Of course, we question the stimulus. It has been a failure.”

LaHood needs to go back to Peoria, Ill. and get back in touch with real America.  The Potomac fever is gone to his head.