Posts Tagged ‘Arizona Legislature’

11th August
2009
written by Sean Noble

 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.

10th August
2009
written by Sean Noble

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.

1st July
2009
written by Sean Noble

I’ve been highly distracted the last couple days.  Just thought you should know.

 

So at dinner I ask my 7 yr-old daughter what she thinks it means to be tolerant.  My wife leans over and whispers something in her ear.  Daughter responds, “Taller than an ant.”  Now that’s funny.

 

I’m a Diamondbacks season ticket holder and I have yet to step foot in Chase Field this season.  There is something very wrong with this picture.  And there is a certain amount of irony to why I’ve been too busy and too out of town to do so.

 

Wal-Mart announced that it is joining with the Service Employees International Union in support of an employer mandate to provide health insurance coverage.  For one thing, doing anything with SEIU (I actually refer to it as SUIE – as in sooooweee! Like when you are calling the pigs since SEIU leadership is like a bunch of hogs at the trough of forced union dues) is a recipe for disaster.  Does Wal-Mart actually believe that SEIU won’t try to unionize them in exchange for supporting bad policy on health care?  Think again.  Sam Walton is turning in his grave.  Tevi Troy has a good take on it here.

 

There are a lot of flowers in our house as a result of my 15 yr-old daughter’s spinal surgery.  When they are a few days old, they really start to smell the opposite of what they are supposed to – but they’re still pretty, so I don’t want to throw them out yet.

 

Given the distractions, my daughter’s surgery and my schedule for the last week, I have paid zero attention to the Arizona budget fight between the Legislature and the Governor, so I don’t know what to think.

2nd June
2009
written by Sean Noble

Nothing is more certain in life than dying and paying taxes, and most people spend a lot of time and energy avoiding both.

A common theme with those folks left-of-center on the political spectrum is that people are happy to pay taxes for the things that government should provide.  The problem is that they think government should provide a lot more than what our Founding Fathers ever envisioned, and thus, more government than people like me want.

On the state level in Arizona, it is clear that Governor Brewer believes that people would rather pay more taxes than do with less government, thus her budget plan which is light on reducing government spending and heavy on taxes. 

I oppose increased taxes, so I got to thinking about how I might deal with this issue if I was in charge.  It occurred to me that there are so many interest groups who say that people are fine paying more taxes, that we should actually give them that opportunity.  The Arizona Department of Revenue should expand the option of voluntarily paying MORE taxes by adding a form – let’s call it Form SITIC – for “stuff I think is critical.” Then, all these people who WANT to pay more taxes can check the box for what their additional contribution will fund.

I’m guessing with as many people saying they want to pay more, the Joint Legislative Budget Committee would be able to project an revenue increase of somewhere in the neighborhood $1.7 billion per year.

Hey! Problem solved.  You’re welcome.

1st June
2009
written by Sean Noble

The Governor has released her budget plan.  In her transmittal letter – addressed to citizens – Brewer calls for a $1 billion tax increase through a 1% increase on state sales taxes.

I know she, and her advisors, believe that there is no other way to deal with the budget, but the legislature has passed a balanced budget out of committee – without a tax increase.

Here is the problem I have with the Governor’s budget: if we can’t undo the massive growth of state government foisted on us by former Gov. Janet Napolitano and a few allied moderate Republicans joining with Democrats in the legislature, then why do we as Republicans even have a majority?  If it reducing the role of government in the daily lives of Arizonans isn’t an article of faith of being a Republican, than what is? 

What frustrates me with this whole debate is that I think we are presented with a false choice.  The Governor says we have to raise taxes – that’s because she isn’t willing to cut spending more.  The legislature has a plan that avoids cutting taxes, but has too many gimmicks for my taste.  It cuts about $600 million – when we really should be cutting closer to $1 billion.

Yes, I know it sounds harsh – that’s cutting a lot.  But if we don’t cut now, when times are tough, we will never do it.  It shouldn’t take a crisis for Republicans to actually act like Republicans, and it’s downright pathetic when Republicans just act like weak Democrats.

If I were in charge (and sometimes I’m glad I’m not) my philosophy would dictate no increase in taxes and no gimmicks – just hard cuts.

6th March
2009
written by Sean Noble

Arizona GOP Party Chairman Randy Pullen announced his support for Arizona Governor Brewer’s budget reform, including a call to consider, if necessary, a $1 billion tax increase:

Governor Brewer has called for a public vote on temporary tax increases, if necessary, to bridge the gap, but only after all other avenues of budget reductions have been exhausted.”

Most of the reaction to the Governor’s speech is that she specifically called for a tax increase.  I read the speech, and I didn’t see an explicit call for a tax increase.

But as a very last resort, after considering every other option, and after doing a truthful and honest assessment of our economic situation, we must be willing to consider the passage of a temporary tax increase – approved by you and signed by me – or approved by the voters at a special election, of roughly $1 billion dollars per year.

I’m going to give her the benefit of a doubt that she will find a way to deal with the mess she inherited from Janet Napolitano without abandoning the most basic of Republican principles.  Unless I’m missing something, I don’t see a proposal to raise taxes.  I see a challenge from her to the legislature to find ways to avoid raising taxes.  I hope, for the sake of our economy and for our future, she doesn’t raise taxes.

I’m also giving her the benefit of a doubt because I can’t believe a state Republican Party Chairman would support a $1 billion tax increase – which would be the largest tax increase in state history.  I don’t believe a Chairman would do that, especially when that Chairman considers himself a “platform Republican.”  In order to pass the largest tax increase in state history, the Governor would have to have some Democrats vote for a budget, (since there are lots of Republican legislators who would honor their “no tax increase” pledge) and I don’t think she wants to become a mini-version of Gov. Arnold Schwarzenegger.   At the end of the day, I could be wrong.  Time will tell.

So there is no ambiguity, here is the most recent Republican Platform on taxes:

Republican Tax Policy: Protecting Hardworking Americans

The most important distinction between Republicans and the leadership of today’s Democratic Party concerning taxes is not just that we believe you should keep more of what you earn. That’s true, but there is a more fundamental distinction. It concerns the purpose of taxation. We believe government should tax only to raise money for its essential functions.

Today’s Democratic Party views the tax code as a tool for social engineering. They use it to control our behavior, steer our choices, and change the way we live our lives. The Republican Party will put a stop to both social engineering and corporate handouts by simplifying tax policy, eliminating special deals, and putting those saved dollars back into the taxpayers’ pockets.

The Republican Agenda: Using Tax Relief to Grow the Economy

Sound tax policy alone may not ensure economic success, but terrible tax policy does guarantee economic failure. Along with making the 2001 and 2003 tax cuts permanent so American families will not face a large tax hike, Republicans will advance tax policies to support American families, promote savings and innovation, and put us on a path to fundamental tax reform.

Lower Taxes on Families and Individuals

  • American families with children are the hardest hit during any economic downturn. Republicans will lower their tax burden by doubling the exemption for dependents.
  • New technology should not occasion more taxation. We will permanently ban internet access taxes and stop all new cell phone taxes.
  • For the sake of family farms and small businesses, we will continue our fight against the federal death tax.
  • The Alternative Minimum Tax, a stealth levy on the middle-class that unduly targets large families, must be repealed.
  • Republicans support tax credits for health care and medical expenses.

 

The Democrats Plan to Raise Your Taxes

The last thing Americans need right now is tax hikes. On the federal level, Republicans lowered taxes in 2001 and 2003 in order to encourage economic growth, put more money in the pockets of every taxpayer, and make the system fairer. It worked. If Congress had then controlled its spending, we could have done even more.

Ever since those tax cuts were enacted, the Democratic Party has been clear about its goals: It wants to raise taxes by eliminating those Republican tax reductions. The impact on American families would be disastrous:

  • Marginal tax rates would rise. This is in addition to their proposal to target millions of taxpayers with even higher rates.
  • The “marriage penalty” would return for two-earner couples.
  • The child tax credit would fall to half its current value.
  • Small businesses would lose their tax relief.
  • The federal death tax would be enormously increased.
  • Investment income – the seed money for new jobs – would be eaten away by higher rates for dividend and capital gain income.

All that and more would amount to an annual tax hike upwards of $250 billion – almost $700 per taxpayer every year, for a total of $1.1 trillion in additional taxes over the next decade. That is what today’s Democratic Party calls “tax fairness.” We call it an unconscionable assault on the paychecks and pocketbooks of every hard-working American household. Their promises to aim their tax hikes at families with high incomes is a smokescreen; history shows that when Democrats want more money, they raise taxes on everyone.

4th March
2009
written by Sean Noble

Brewer speaks to the legislature today at 4:00 p.m.  This is as close to a State of the State address as she can get, having ascended to office after Napolitano’s official State of the State.  Obama did the same thing last week when he addressed Congress in a faux-State of the Union address.

What is interesting is that Democrats in Congress were throwing out all kinds of ideas, proposals, etc. in the lead up to Obama’s faux-SOTU speech.  No one accused the Democrat leaders of “cutting Obama off at the knees” in doing so. 

Now, state legislative leadership has released various proposals on how to deal with the Napolitano-induced budget crisis, and some are crying foul.  The objection is that Brewer should be able to lay out her plan prior to legislative leadership laying out their own.

That thinking is actually backwards when you understand the constitutional authority of the branches of government.  It is the legislature’s job (required by constitution) to pass bills that fund government and set policy.  It’s the Governor’s prerogative to sign or veto any such legislation – which is a part of the process called “legislating.”

Watch for Brewer to lay out the severity of the problem she inherited from Napolitano (and it’s hard to overstate the severity of the problem) and to propose ways to fix it.  It will include rollbacks in the Napolitano spending binge of the last few years and it will likely include some form of “temporary” tax increases – likely a small increase in state sales tax.  She is likely to propose that the legislature refer such tax increase to the ballot.

That is going to fall on deaf ears by many legislators, some of whom have signed a pledge to not vote in any way to increase taxes.  If a tax increase is a part of Brewer’s plan, she’ll have to get some Democrat support, which will be very hard because of the spending reductions that will have to be included.

4th March
2009
written by Sean Noble

Chuck Muth is one of the brightest minds in grassroots politics this side of the Mississippi.  He runs an outfit called Citizen Outreach, and has put together two successful Conservative Leadership Conferences (think CPAC for the Rockies).

He recently recounted how a Republican legislator in Tennessee cut a deal with Democrats to get himself elected Speaker, and what resulted.  It is an instructive lesson for legislators everywhere – particularly here in Arizona given our history of former Senate President Randall Gnant cutting a similar deal to be Senate President, and the (likely untrue) rumor that Rep. Sam Crump was shopping such a deal with Democrats earlier this year. Muth’s column below:

 

RINOing Republicans In Name Only
By Chuck Muth

In the Catholic and Mormon churches they call it excommunication.  The Amish refer to it as shunning.  The Klingons call it discommendation.  In each case, it’s a process by which an individual who has committed an egregious offense so serious they are literally kicked out of the organization.

In Tennessee, Republicans have invented a new term for this action: disassociation.  I like “RINOing” better, but what the heck.  Here’s what it’s all about.

“In November, the GOP won control of both houses of the state legislature for the first time since Reconstruction,” reports Brendan Miniter in Political Diary on February 11th.  “That victory was one of the few bright spots for Republicans across the country in 2008 and seemed to set the stage for a GOP resurgence and possible capture of the governor’s mansion in 2010.

“Then, on Jan. 13, the wheels started to come off.

“Republicans had rallied behind Rep. Jason Mumpower for House Speaker, and he appeared to be a lock as late as the morning of the vote, when every House Republican prayed together. When it came time to vote, however, it became clear that GOP Rep. Kent Williams had cut a secret deal with Democrats to elevate himself with unanimous support from across the aisle to the Speaker’s chair.

“Mr. Williams was booed in the process, with at least one person shouting out ‘Judas,’ but he was unfazed, telling a reporter that he had ‘been booed before.’  He went ahead and organized the House chamber, splitting committee chairmanships between Democrats and Republicans.”

So what did the Tennessee Republican Party do?

They kicked Williams out of the party.  Literally.

On January 30, 2009, the Executive Committee unanimously adopted a resolution which included, among others, the following “whereases”.

Whereas the supporters, voters and donors of the Tennessee Republican Party have a right to expect that, having collectively campaigned for and won a majority in the state House for the first time since 1868, both houses of the legislature would be lead by loyal Republican leadership; and

Whereas the evidence shows that Representative Kent Williams had been planning his betrayal for eight weeks and conspiring with Democrats to crown him Speaker in exchange for betraying his fellow Republican caucus members; and

Whereas Representative Kent Williams rewarded his Democratic allies with committee chairmanships, putting at risk the Republican agenda the majority of Tennessee voters voted for; and

Whereas Kent Williams’ actions and words provide indefensible evidence to the 30 written challenges questioning the Bona Fide status as a Republican; and is entitled to its constitutional right of Freedom of Association; and

Whereas the Tennessee Republican Party seeks to disassociate with Representative Kent Williams;

And this is the best part:

BE IT RESOLVED:

1. That state Representative Kent Williams of Carter County, Tennessee, be forever barred from seeking elective office in Tennessee on a Republican ballot; and

2. That the Tennessee Republican Party immediately request all media outlets in Tennessee to cease referring to Representative Kent Williams as a Republican.

3. That Kent Williams receive no support, endorsements, or financial backing by those affiliates of the Tennessee Republican Party.

Hoo-hah!

Can they DO that?  I don’t see why not.  As the resolution notes, the Republican Party enjoys the constitutionally protected right of Freedom of Association – and the Tennessee Republican Party is the official governing body of the organization.  So if they want to kick somebody out of the party and not let them run for office as a Republican, why not?

Have the state parties in Pennsylvania and Maine – home to RINO (Republican In Name Only) sell-out Sens. Arlen Specter, Olympia Snowe and Susan Collins – heard about this?

“The politically expedient thing to do would be to overlook whatever he’s done,” Tennessee GOP Chairwoman Robin Smith said in explaining the decision to oust Mr. Williams. “We’re either going to stand for something or we’re no different from Kent Williams.”

Amen, sister!

Gee, I sure hope no one suggests that local Republicans consider “RINOing” Republican state legislators who sell out their party and conspire with Democrats to give the Democrats “bi-partisan” support for tax hikes in the middle of a recession.

Oops.

31st January
2009
written by Sean Noble

Governor Brewer signed a balanced budget into law on Saturday after she and lawmakers hammered out a deal.  As expected, Republicans supported and Democrats opposed the budget. 

There was the typical prediction of the sky falling by Democrats, including this gem from Meg Burton Cahill:

“The state of Arizona will come to rue this day,” said Sen. Meg Burton Cahill, D-Tempe. “The bill that will come at the end of the decade or so from the decision we’re making today is going to be very expensive for the citizens of Arizona.”

What is it about a $1.6 BILLION hole that Cahill doesn’t understand?  And what about the $3 billion hole that legislators will now start to grapple with for next year’s budget?  In typical fashion, most Democrats complained about the cuts, but offered little of their own ideas about how to deal with the problem.

There are two ways to manage being the minority party: 1) whine and complain about every single thing the majority does; or 2) offer actual alternatives to the majority plan and try to find ways to get votes on those plans.

So far, Democrats in the Arizona Legislature are following the first path, and Republicans in Congress are following the latter (as evidenced by bipartisan support for the Republican alternative to the latest stimulus package).  We’ll see which strategy works in 2010.  My guess is that Republicans in Congress will see a lot of gains, and Democrats in the Arizona Legislature will not – in fact, they will likely lose more seats.