We Need Fiscal Responsibility Now

While I applaud Jim Swanson’s call to the business community “to lead” in securing additional funding for Arizona’s K–12 educational system, I believe his solution of a 1.5 cent per dollar sales tax is a less than ideal way to raise those funds.

In Arizona, one in four children lives in poverty and there is vast evidence that poverty is the number one out-of-school determinant in predicting student success. Increasing the sales tax, the most regressive of all taxes, will hurt these students and their families most, just adding to the problem. Also, sales tax is not the most stable of funding sources, because families that can’t afford the increase stop purchasing taxed goods.  Still, I’m in total agreement with Mr. Swanson that stable funding is something our schools desperately need.

Yes, with our teachers the lowest paid in the Nation, and per pupil funding at 48th, additional revenue is needed for K–12 education. But, ensuring everyone, including corporations, pay their fair share can go a long way toward meeting the need. Currently, our state tax laws do not promote that ideal. In fact, two-thirds to three-fourths of Arizona Corporations that file state income tax pay almost no state income tax (the $50 minimum) each year. The result is that corporate income tax collections in Arizona, once $986 million in 2007, were $663 million in 2015, and are projected, with additional scheduled cuts, to be only $298 million by 2019. As for the promise that lower corporate taxes create jobs, that’s a race to the bottom, pitting state against state when we need to be thinking as globally as those corporations are. Kansas anyone?

Truth is, corporate tax cuts may sound good, but tend to be only a short-term fix to creating a business-friendly climate. We don’t need more low-paying jobs that keep hard-working people in poverty. We need quality companies that are good neighbors and provide well-paying jobs. These companies know that chasing after the lowest corporate taxes doesn’t support their long-term growth. What they want and need, to truly thrive over the long haul, is a modern, well-maintained infrastructure and a well-educated workforce.

Arizona lawmakers need to quit talking about fiscal responsibility and actually do something about it. Cutting Arizona’s Department of Revenue budget by $7 million in 2016, resulting in a decrease in corporate auditors from 30 to 4 is not an example of fiscal responsibility. A former DOR official puts the potential lost revenue at $100 million per year. Instead, our lawmakers should be stepping up enforcement efforts of the laws we have on the books and reviewing them to ensure they provide a return on investment. Some people are calling for a bipartisan committee to review hundreds of corporate tax loopholes currently on the books. Estimates are that a scrub of those could generate up to $2 billion in revenue per year.

Arizonans can have our cake and eat it too, but we must work together to find the best solutions that work for all of us. That requires an understanding that compromise is key and that we can achieve amazing results if we don’t care who gets the credit. Ultimately, it requires real leadership.

Advertisement

About Hollace

A retired Air Force Colonel running for the Arizona House in LD 11 to prove government should and CAN deliver solutions. I believe in economic security, a quality education for all, and fiscal responsibility.
This entry was posted in education, leadership, politics and tagged , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s