The Arizona Legislature, unable to pass a proposed temporary, 1-cent increase to the state sales tax, is sending it to the voters on May 18. Hopefully voters will show themselves to be more courageous than their legislators.
Because we need the money.
The sales tax is not a perfect solution, but it’s certainly better than some “fixes” recently covered in The Arizona Republic.
For example, it’s not nearly as shortsighted as selling off state buildings for $700 million and renting them back for $1.1 billion.
It’s not as small-minded as closing Lost Dutchman State Park, which cost the state $9,545 to operate last year and generated $4 million for local businesses.
It’s not as unhelpful as pushing $450 million in payments to school districts onto next year’s budget instead of this year’s, for a savings of $0.
As these examples painfully illustrate, our state government is in trouble. And now we’re running out of time. We can, should and must cut spending dramatically. But it’s unreasonable to expect that spending cuts alone will get us through. There are things we have to pay for, and to do so we’ve got to find some money.
Stalling payments is not a fix — it’s an accounting trick. Selling those state buildings was an expensive loan. The sales tax increase, on the other hand, will actually bring the state more money. And the state needs more money, because as bad as this year has been, next year will be worse.
So far, we’re looking at a $3 billion shortfall in fiscal year 2010-2011. This tax increase should cover almost $1 billion of that, by legislative estimates.
There are legitimate objections to raising sales tax in a recession. But there aren’t many great recession taxes.
When sales are down, less sales tax is collected. So a 1 percent increase next year may net less money than it would have in better economic times — but it is still expected to pull in almost a billion dollars. That’s almost one-third of next year’s projected deficit.
It’s regressive, and will be especially burdensome on the un- or underemployed, including the thousands of government employees losing their jobs this year. But the revenue has already been dedicated to education, health care, and public safety, all of which may be critical to those same people in years to come.
The legislature approved the special ballot in a vote that was bipartisan, but hardly unanimous. Objectors including Rep. John Kavanagh of Fountain Hills worry that tax increases without complementary stimulus measures may scare businesses away from Arizona. Although Kavanagh voted against the increase, he still thinks voters should pass it if the legislature approves tax breaks to be phased in several years from now.
But we don’t need more legislation to show that the increase is temporary; that message is built into the bill. In the election, voters will decide whether to pass a temporary, three-year increase.
And Arizona needs them to say yes.
Reach John at john.a.gaylord@asu.edu
