Thursday, Arizonans can start voting by early ballot on Prop. 100, the temporary one-cent sales tax increase dedicated to education, public safety and social services.
They would be wise to reject it. Passing the sales tax doesn’t solve a problem; it just makes an awful one less bad.
This regressive tax disproportionately burdens the poor and punishes consumers for the Legislature’s failure to properly govern this state.
We need to get state government off its over-reliance on sales taxes, which is what got us into this mess in the first place. Increasing the sales tax is like giving a heroin addict more heroin because a lack of it made him feel bad. The goal should be to cure the addiction, not enable it.
The tax is expected to bring in between $850 million and $1 billion a year for three years. The governor and Republican legislative leaders have threatened that if the tax is rejected, they will be forced to cut the budget by a similar amount, adding to the more than $2 billion in cuts already made. Those cuts have resulted in hundreds of thousands of poor people losing state health insurance, thousands of laid off teachers, closure of state parks and highway rest areas and numerous other austerity measures.
Because of those threats, arguments to vote for this bill can be compelling, inducing voters shell-shocked by the Legislature’s gross negligence to take matters into their own hands. Democracy in action, perhaps. But voting with a gun to your head – pass the tax or suffer the consequences of more brutal spending cuts, most of which will occur to public education – is hardly democracy.
Yet nearly every reason to vote for the tax is mitigated, outweighed or made moot by the bad it does, by forces out of the electorate’s and Legislature’s control and the Legislature’s continued misgovernance.
We’d be better off voting against it and forcing the governor and Legislature to find a better way.
Among the arguments to vote for the tax are:
• It’s a sales tax. Arizona has millions of visitors each year. The taxes they pay on their purchases will help fund state programs, most of which visitors won’t use.
• It’s truly temporary. It sunsets in 2013 and because it amends the state constitution, it can only be renewed by another public vote.
• Two-thirds of it is dedicated to public education, preventing thousands more teacher layoffs and classrooms crammed with kids.
• It will prevent the state from making good its threat to transfer millions of dollars in health care and public safety costs to the counties, most notably juvenile detention.
• It potentially buys the state time so that the state economy can recover and the state’s other tax revenues can return to the same or nearly the same revenue levels as before the recession, easing the pressure on the budget.
• It preserves billions of dollars in federal matching funds for education and health programs.
• It’s protected spending, the Legislature can’t sweep it to balance the budget or pay for other programs.
• It might finally convince the state’s anti-tax zealots that the public is willing to tax itself to preserve government programs. Of course, the converse is true, that rejecting it will convince the de facto anarchists that the public is unwilling to tax itself and therefore their awful behavior has been correct.
But the list of arguments against the tax is longer and perhaps equally as compelling. Among them are:
• It’s regressive. The poor will pay a much larger percentage of their incomes (most of which is spent on life essentials) than the affluent.
• It’s a sales tax. We need more money to fund state services but this tax is the wrong way to do it. Sales taxes, as we’ve so horribly seen, are at the mercy of the ebb and flow of the economy. Without other taxes to rely on to fund state government, any recession sends the state into a budget tailspin. This tax only makes that worse.
• There are better ways to solve the problem including an across the board increase in income taxes, increasing the state equalization property tax and eliminating the numerous goods and services exempted from the sales tax. Rejecting the one-cent sales tax increase would put these options back on the table. The threatened cuts to education and public safety are just threats, they don’t have to happen if the tax increase is rejected.
• It penalizes consumers for the Legislature’s failure, making most retail goods and services more expensive. In some cities the total state and local sales tax will be more than 10 percent. While there is not a lot of reliable scholarship connecting taxation to economic activity, an argument can be made that the tax will curtail some consumer spending, thereby diminishing the tax’s expected collection and its intended benefit.
• It sunsets. If the Arizona economy doesn’t recover fully in three years, which most economists predict, we’ll be right back in the soup on May 31, 2013. The Legislature will either have to refer another ballot measure, raise taxes or cut another $1 billion out of the budget. Crossed fingers is poor fiscal policy.
• It could be moot. The Legislature is strongly considering huge tax cuts thereby possibly tossing out the back door most of the money this tax would bring in the front door. Since the sales tax increase is earmarked, if overall economic activity and incomes don’t increase, more program cuts may be necessary to offset the loss of income from the tax cuts.
• It could be moot, part 2. Voters have to keep voting Yes this year to make this work. Two ballot measures in November will allow the state to sweep about $450 million from First Things First, an early childhood preventative health program, and from the Land Conservation Fund. If voters reject the sweeps, some of the cuts the new sales tax is supposed to prevent could be made anyway. Plus, the Legislature is likely to put a measure on the ballot (as of Friday, it still needed to pass the Senate) asking voters to repeal the Voter Protection Act, which protects about $5 billion in voter-mandated state spending. Without relief from the Act, the budget will remain an unwieldy, unrectifiable monster. But there’s a question about whether there will be the same effort to get voters to pass these measures as there has been for Prop. 100. In fact, there may be considerable Vote No campaigns on all three, most likely by some of the same groups stumping for Prop. 100, ironically.
• It doesn’t solve the problem. Arizona needs $3 billion more in tax revenue, not $1 billion. This is like being in a 30-foot hole and someone throws in 10 feet of dirt. Reject the tax and force the Legislature to solve the budget’s structural deficit properly.
Finally, and perhaps the best reason to reject it, passing it could take the steam out of the government reform efforts headed by Sandra Day O’Connor and Lattie Coor.
If the tax passes it will give Gov. Jan Brewer and the Legislature a sense of accomplishment and obfuscate arguments that state government desperately needs reform.
Arizona is a house on fire. Passing this tax only puts out the fire in the garage.
Let it burn.
Arizona’s current crop of Republican leaders have long advocated for limited government. Let’s give it to them. Let’s have classrooms crammed with 40 and 50 kids; school districts eliminating football and other sports to try to keep as many teachers employed as possible; counties jacking property taxes sky high to pay for state prisoners and indigent health care; lines at the DMV stretching out the door and down the street; the serioulsy mentally ill wandering the streets untreated and unmedicated; the elderly in nursing homes dying of bedsores because there weren’t enough inspectors to ensure minimum levels of care; cases of child abuse and neglect going uninvestigated because there aren’t enough CPS caseworkers; and businesses fleeing the state to find better schools and better living standards for their workers.
It will either be a limited government conservative nirvana or it will finally be the motivator to get the 60 and 70 percent of voters who don’t vote in state and local elections up off their butts and taking an interest in their own governance.
Then maybe we’ll be able to elect a new batch of state leaders who understand the critical role government plays in creating a great state. We’ve seen what the extreme sides of the political spectrum can’t do. Let’s find out what the reasonable people in the middle can.
While it might seem counter intuitive and against their own best interest, the best thing voters can do May 18 is make things worse so that we can finally muster the anger and the will needed to make things better.
Vote no on Prop. 100.