Brewer's Ballot Bargain is a Bad Deal for Taxpayers‏

Dear Arizona Taxpayer,

Gov. Jan Brewer has suggested sending to a special election two proposals designed to help close the gap in the state’s budget deficit.

One proposal is to ask voters to increase state taxes by a billion dollars a year for three years. The other proposal is to ask voters to let the Legislature make cuts to areas of the budget that have been protected from cuts by past voter mandates.

The obvious danger is that if the two proposals go to the ballot separately, the spending lobbies and tax-takers (who are much more well-funded and well-organized than taxpayers) will pass the tax increase and shoot down the authorization for spending cuts.

Even if the Legislature is able to evade the single-subject rule and legally bind the two proposals together (though conditional enactment clauses in both referenda), here is the result:

The spending lobbies get a guaranteed tax increase, but taxpayers only get the possibility of spending reductions in formerly protected budget areas.

In other words, the spenders and tax-takers get their piece of the pie. But we taxpayers might get our piece of the pie, if the political will can actually be found in the Legislature to make the cuts.

Furthermore, there is nothing in the package to keep the state from resuming its pattern of rollercoaster budgeting as soon as the recession is over. Even if the tax increases really are temporary, and really do expire in three years, the state will still be on a budget rollercoaster.

When the tax money comes pouring in again, the politicians will spend every penny that comes in, and leverage that money to spend yet more. They will raise spending to unsustainable levels in order to please the tax-takers and the spending lobbies, just as they did during the last six years. They will create yet another gigantic budget deficit crisis during the next economic downturn, when the revenue falls off. Once again, the politicians will come at us with tax increase proposals. And next time, the “fix” may be a permanent tax increase, rather than a temporary one.

If Arizona taxpayers and fiscal conservatives are even going to begin to consider a ballot bargain package that includes a temporary tax increase, it will have to include the Taxpayer Bill of Rights—the only reform that can stop the spending rollercoaster. The Taxpayer Bill of Rights (TABOR) would create a sustainable upper limit to state spending growth, by limiting the growth in state government to the rate of growth of population plus inflation, with immediate refunds to taxpayers of excess monies.

See this chart for a visual of how TABOR would have worked, had it been in effect since 1993:

http://www.americansforprosperity.org/files/AzGenFund2003-2012--01-31-09.pdf

If TABOR is not in the package, Arizona is better off balancing the budget with the tools currently at the disposal of the Legislature and Governor. They should start with the $2.2 billion in spending reductions suggested by the appropriations chairmen in their January 15 budget, and find creative ways to save the other $1.5 billion by selling state assets, privatizing state functions, and eliminating entitlement fraud.

Source:

Tom Jenney
Arizona Director
Americans for Prosperity