Patrick M. Gleason

Arizona Budget Update: Majority of Polled Arizonans Oppose Tax Increases


Posted by Patrick M. Gleason on Monday, March 30th, 2009, 5:51 PM PERMALINK

 A recent commenter on this blog contended that most Arizonans wouldn't mind having their taxes raised in order to help address and prolong the state's overspending problem, currently standing at $3 billion for the 2009-2010 fiscal year.

I followed up with the commenter to request polling support for such a bold claim yet, not surprisingly, he has not been able to produce anything.  Thanks to our friends at AFP-AZ we now have a poll proving his claim patently false. As it would happen, most are opposed to Gov. Brewer's proposed tax increase and this sentiment cuts across party lines.
 
According to AFP-AZ's poll, conducted in the state's major population centers of Phoenix and Glendale, "Gov. Jan Brewer’s proposed billion-dollar-a-year tax increase fared badly....with 62 percent of respondents in Phoenix opposed, and 64 percent in Glendale."  Click here for AFP's full report on the poll.
 
Need more reasons why tax hikes should be avoided like the plague? A recent report produced by the Goldwater Institute and Boston's Beacon Hill Institute shows that Gov. Brewer's proposed tax hikes, if implemented, would result in the loss of 14,400 private sector jobs.
 
The loss of over 14,000 private sector jobs would be devastating in Arizona, a state that from January 2008 to January 2009 saw private sector jobs shrink by more than 7 percent, a loss of 161,200 jobs.  Demonstrating a government completely out of touch with real world economic conditions, during this same period in which the private sector was shedding jobs by the tens of thousands per month, government employment in the Grand Canyon State actually rose by 2.6%. 
 
The substantial loss of jobs that the proposed tax increases would create would only result in further depression in tax collections, totally defeating the goal of tax hike proponents' quest for more revenue. This is nothing new though.  In fact, Arizonans need only look to their neighbors to the west for evidence of the deleterious impact that tax hikes, especially in a recession, have on the economy and welfare of the state.  Not long after passing the largest state tax increase in history to address the Golden State's own overspending problem, the legislature's budget analyst recently reported that revenues derived from the tax hikes will still fall short of projections by about $8 billion.
 
Some lawmakers just can't comprehend that tax increases impact the behavior of people and businesses, whether that be making purchases online from out of state vendors, cutting back spending, or just simply moving.

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Just in Time for March Madness, California Nanny Staters Want to Ban Plasma Televisions


Posted by Patrick M. Gleason on Thursday, March 26th, 2009, 2:54 PM PERMALINK

Even before last month's budget agreement, The Golden State already had the 3rd worst business tax climate in the nation. Now, as California businesses struggle to keep their doors open and make payroll on the heals of the largest state tax hike in history, power-hungry bureaucrats are making it clear that they're not done just yet and are seeking to impose what would be the nation’s most draconian set of regulations on televisions.

The proposed regulations would be phased in over a two year period, with a first tier taking effect on Jan. 1, 2011, and an even stricter second tier on Jan. 1, 2013. It is estimated 30% of TV’s currently in stores would be banned under the proposal. So rigid are these requirements, that only one plasma TV currently on the market would pass muster.

Subsequently, many consumers will simply choose to order online from out of state vendors. Shawn DuBravac, an economist with the Consumer Electronics Association, estimated that if 30% of televisions fail to meet standards and can't be sold, California could lose $130 million in tax revenue and 15,800 jobs. 

In commenting on this proposal, which is being considered by the California Energy Commission, the Consumer Electronics Association calls the proposal "an unnecessary and harmful approach" that would hurt both customers and businesses in the state. ATR agrees whole heartedly.

Mike McMaster, president of Wilshire Entertainment Inc stated that this "would be basically the end of our business." His two locations in Thousand Oaks and Valencia employ 54 people and specialize in sales and installation of custom home theater systems centered on extremely large TVs. Best Buy calls it "a punitive and unnecessary regulatory approach" and has rightfully called on the state to abandon it in favor of "market-based and consumer-oriented" policies. 

Proponents of these onerous regulations maintain that the televisions in question use 43% more power than traditional tube-style TV’s of yesteryear, yet they fail to mention that they look 43,000% better than older models. Consumers should have the freedom to enjoy the fruits of their labor and the state of California shouldn’t be looking to snuff out leisure activities enjoyed by law abiding residents. After all, this ban wouldn’t just apply to TV's in the home – forget watching high-definition big-screens at your favorite sports-bar as well. They too would get the ax.

ATR encourages California taxpayers to contact the California Energy Commission and urge them to oppose these costly and unnecessary regs.  Now is also a great time to ask the commission why they deem spending time on this issue to be a wise use of scarce state resources.

 

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Arizona Tax Hike: 'Akin to Blaming the Victim"


Posted by Patrick M. Gleason on Monday, March 23rd, 2009, 6:29 PM PERMALINK

Arizona's Goldwater Institute, today, released commentary from Grover Norquist on why any tax hike proposal should be a non-starter for Grand Canyon State taxpayers. 

The text of Norquist's statement is as follows:

 

 

 

Tax hike akin to 'blaming the victim'

Grover Norquist

 

Goldwater Institute
March 23, 2009

It is well documented that government spending in Arizona has grown more rapidly than the population and inflation for quite some time.

Now the politicians blame you for failing to send in enough money to pay for their promises. They say there is a shortfall. They spend too much and this is a shortfall, a failure, on the part of working men and women in Arizona. It would be funny if it were not rude and insulting and plagiarized from the recent antics of politicians in Michigan and California and other failed states.

This is the new strategy of those who prefer to vote for a living rather than work for a living. Spend so much that the State or City or County faces bankruptcy and then blame the victims (i.e. the taxpayers). Tell them they are greedy if they want to keep money they earned. Tell them you are virtuous for making promises you cannot keep, and promising the wealth, income and time of others to pay your debts.

If the government is spending too much of the earnings of Arizonans, there are two solutions. First, spend less of the taxpayers' money. Two, enact pro-growth economic policies so that Arizonans earn more money, create more jobs and the burden of present spending is lessened by being shared by more workers with higher incomes.

Raising taxes does not reduce spending. Every dollar promised in higher taxes becomes an excuse for not reducing spending. Raising taxes won't create more jobs and taxpayers in Arizona. Raising taxes creates more jobs and taxpayers in Nevada and Texas. Higher taxes mitigate economic growth. Call your relatives in Michigan and Zimbabwe and ask how ever higher taxes are helping on the jobs and earnings front.

Further evidence that government, not lack of revenue, is the problem is the fact that from January 2008 to January 2009 Arizona saw private sector jobs shrink by more than 7 percent, or 161,200 jobs. Meanwhile, Arizona's state government employment fell a mere 500, a drop of only a little over one-half of one percent. Total government employment actually rose with state and local education-related employment rising by 5,100, a 2.6 percent increase.

Reducing state and local government overspending is long overdue. Reducing tax and regulatory burdens that kill jobs and reduce incomes in Arizona is long overdue. Raising taxes doesn't fix anything. It makes things worse.

Grover Norquist is president of Americans for Tax Reform.

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TX Senate Transportation Committee Considers SB 855


Posted by Patrick M. Gleason on Wednesday, March 18th, 2009, 4:15 PM PERMALINK

ATR's opposition to Texas Senate Bill 855 has been well documented on this website. (Click here for more info on SB 855).

During a standing room only hearing of the Senate Transportation Committee, committee chair and bill sponsor Senator Carona (R-Dallas) introduced a committee substitute to SB 855. With the substitute, Dallas area taxpayers will no longer be the only ones on the chopping block.  The committee substitute adds a couple dozen pages to SB 855 and will lead to tax increases in Austin, San Antonio, and Houston as well.

In addressing the matter of why he wants to raise taxes in the middle of a recession, Sen. Carona responded that "If we pass this today, we couldn't get it out there for another 24 months."   Carona added that "you wouldn't want to wait until everything (with the economy) was better." 

As is to be expected when the committee chair is also the bill sponsor, the docket was dominated by those lobbying in favor of SB 855.  Numerous regional authorities and chambers of commerce were trotted out to cheerlead for tax increases.  Also of note during the hearing was Senator Rodney Ellis (D-Houston) instructing the spending interests and rent seekers in the room to refer to tax increase as "revenue enhancements."

SB 855 was already a bad deal for taxpayers but today's substitute made it all the more odious.  ATR will continue working with Lone Star State lawmakers to find a solution to the state's transportation challenges in a way that does not raise taxes. Stay tuned to atr.org for the latest information on this important matter.

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Why Gov. Perry Needed to Reject $555 Million Federal Stimulus Dollars


Posted by Patrick M. Gleason on Tuesday, March 17th, 2009, 4:00 PM PERMALINK

ATR is highly supportive of Gov. Rick Perry's decision to reject $555 million in payments to TX from the federal stimulus bill - the portion earmarked for state unemployment benefits. Since then Gov. Perry has been taking heat for this decision from all sides of the political spectrum.

Today, James Quintero, Fiscal Policy Analyst for the Texas Public Policy Foundation, provided perhaps the best explanation for why accepting this $555 million would have been a bad deal for Lone Star State taxpayers and employers. Pasted below is the text of Quintero's commentary or click here to view it as it appears on the TPPF website.

 

 

 

Correct Call to Reject Federal UI Strings

By James Quintero

The sharp increase in the number of Texans losing their jobs has many wondering whether Gov. Rick Perry made a correct choice to reject the $555 million in unemployment insurance (UI) assistance offered by the federal government.

On the surface, bringing home an extra half-billion dollars for Texans who've lost their jobs through no fault of their own seems like a no-brainer. But peel away the veneer of "free money" and you see flawed public policy.

To draw down these one-time funds, Texas would be forced to make permanent changes in its unemployment eligibility system.

For the first $185 million, Texas would have to allow the use of an "alternative base period" for unemployment eligibility. Under current law, Texas reviews an applicant’s last four calendar quarters of wages to determine if the applicant worked enough to be eligible. The Obama Administration wants states to provide a bypass, allowing applicants to qualify if their wages would have been sufficient in the last one quarter.

The Texas Workforce Commission's cost estimate of this change: $212.4 million over five years.

That's not all. The rest of the money would hinge on the adoption of at least two of the following four benefit expansions:

* Allowing benefits to people seeking part-time work, not just full-time employment.

* Providing an allowance of at least $15 per week for each dependent living in a recipient’s household.

* Extending unemployment benefits past the current 26-week limit for persons enrolled in a state-approved job training program.

* Granting immediate eligibility for people who have quit their job for "compelling family reasons" or to move with a spouse.

The five-year cost of these individual changes ranges from $23.1 million to more than $1.4 billion.

Despite efforts from several legislators to craft legislation that automatically end those provisions as soon as they perceive the federal money to have been spent, the stimulus legislation makes clear that dog won’t hunt. The U.S. Secretary of Labor is directed to "disregard any State law provisions which are not then currently in effect as permanent law or which are subject to discontinuation."

Although many of the details are still being debated in Washington, this paragraph has many governors of both parties concerned about losing state autonomy and being shackled with higher costs imposed at Washington’s decree. The fallacy promoted by advocates of these eligibility changes is that the federal funds will "pay" for several years of the expanded benefits. In fact, those dollars will be used immediately to partially shore up the UI trust fund, and employers will foot the cost of the expanded benefits from Day One.

There are better options to address the projected trust fund deficit that control the level of taxes paid by Texas employers and preserve Texas' ability to manage our unemployment system as we see fit.

The federal government has a separate program that provides zero-interest loans to states that need help covering short-term UI trust fund deficits.

Additionally, the Texas Legislature in 2003 authorized the Texas Workforce Commission to issue bonds to cover such deficits. TWC has accessed this provision before – borrowing funds at a super-low interest rate thanks to the state’s strong credit rating, paying them off early, and saving Texas employers $270 million.

Both of these would address the short-term issue of shoring up our UI trust fund and continuing to pay benefits to jobless workers in a way that maintains a more predictable tax burden on Texas employers.

It is beyond dispute that people are losing their jobs, families are struggling financially and emotionally, and many well-intentioned legislators want to help.

But legislators must keep in mind that every additional dollar that Texas employers have to pay for people who aren't working is one less dollar available for job creation and economic recovery. And ultimately, the best way to help people who have lost their jobs is to foster an economy that creates jobs.

James Quintero is a fiscal policy analyst at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.

The author would welcome your thoughts on this article.
Please send your comments to: jquintero@texaspolicy.com

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Arizona Republican Party Chairman Randy Pullen: enjoys fishing and raising taxes


Posted by Patrick M. Gleason on Monday, March 16th, 2009, 7:00 AM PERMALINK

Arizona Republican Party Chairman Randy Pullen has posted what he calls "A Modest Response to Americans for Tax Reform," on the official blog of the state party, which addresses a letter that ATR sent to all Arizona lawmakers last week urging them to oppose Governor Jan Brewer's proposal for a multi-billion dollar tax hike. In his response, Pullen explains why he thinks it's a good idea, in the middle of a a recession, to impose the largest tax increase in state history on Arizona taxpayers.

What the chairman fails to address in his retort is just who, exactly, he thinks isn't paying enough.  Not only does this tax increase do nothing to address the fundamental and structural problems with the state budget, but it is the worst thing to do when Arizona families are experiencing such a severe economic downturn.
 
What about the underemployed single mom who is just trying to keep the job she has, keep gasoline in her car and keep food on her kids' table. 
 
Randy doesn't think she's paying enough? Randy just wants to raise her taxes and go fishing.

What about seniors and those approaching retirement who have seen their savings decimated over the past year.  Some may never recover sufficiently to enjoy the savings that they built and planned to use. 
 
Randy just wants to raise their taxes and play on his boat.
 
And what about the small businesses that are struggling to keep their doors open in this slowing economy, just trying to keep employees on payroll and afford health care?
 
Randy just wants to raise their taxes and go fishing.
 
If Randy was more interested in supporting Arizona taxpayers, Arizona working families and Arizona's future, he would at least seek counsel of someone who could explain to him that at times of recession, the answer is to conceive of policies that encourage growth and economic development, not suffocate it.
 
Arizona lawmakers don't need to look very far for a demonstration in why raising taxes in the current economic climate is a bad idea. California just enacted the largest tax increase in their state's history last month. Yet, not even four weeks later, the California legislature's budget analyst has stated that those tax hikes will miss their revenue projections by $8 billion. This is a perfect example of what Napolitano, and now Brewer and Pullen, failed to understand - the behavior and actions of people and employers responds to adjustments in tax rates.
 
If Brewer and Pullen are successful in enacting their proposal - companies like Intel that have fled the hostile tax climate of California for Arizona - in the future will just skip over the Grand Canyon State on their way to ribbon cutting ceremonies in Texas.

Let's be clear, raising taxes is not governing. Tax hikes are the preferred policy of those that abdicate responsibility in governing.

In his response to ATR, Pullen justifies the burden of Brewer's multi-billion dollar tax hike by claiming that the net effect will be that Arizonans will give back "20% of their tax rebate from Obama."  While Obama, Pelosi, and Reid must be just tickled pink to know that state officials are using their legislative monstrosity, the stimulus bill, as justification to further raise taxes at the state level, what Pullen fails to recognize is that this money that Obama is dropping from the sky is not free money. Point of fact, Obama and the feds can't give anything other than what they have already stolen from Arizona taxpayers.

The only gift Randy and the AZ Republican Party are giving to anyone is a perfect lesson on how not to brand your party.

Americans for Tax Reform is, and will continue, working with lawmakers on crafting a budget that does not raise taxes on hard working Arizona families who already spend 194 days out the year, well over half the year, just to pay for the cost of their government.  Apparently Governor Jan Brewer and Chairman Randy Pullen think that's not enough.

Click here for a pdf copy of the original letter that ATR sent to all Arizona legislators.

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Gov. Perry Rises to the Occasion and Protects TX Taxpayers


Posted by Patrick M. Gleason on Friday, March 13th, 2009, 6:00 PM PERMALINK

Americans for Tax Reform, today, announced strong support for Gov. Rick Perry’s decision to reject $555 million in federal dollars that Texas would have received as part of the $787 billion stimulus bill signed into law by President Barack Obama last month.

 
The $555 million that Perry declined to accept was earmarked for purposes of expanding unemployment benefits in Texas. Accepting the $555 million would force the state to alter the current methodology by which employment insurance eligibility is granted. Eligibility would even extend to part-time workers under the strings attached to the federal stimulus funds.
 
“Gov. Perry has, in rejecting these federal dollars, demonstrated tremendous leadership in defending Lone Star State taxpayers,” said Grover Norquist, president of Americans for Tax Reform. “As one example of the ill-advised conditions attached to these funds – someone who voluntarily quits a job in another state, in order to follow a spouse to TX, would be eligible for unemployment benefits in TX. Even worse, Texas families, employers, and all taxpayers would be charged with footing the bill. Americans for Tax Reform praises Gov. Perry’s move to prevent this from happening.”
 
Louisiana Gov. Bobby Jindal, as well, has rejected federal stimulus dollars for precisely the same reasons as Gov. Perry. It is estimated that that federal funds would cover expanded unemployment spending for seven years. Once this one-time injection of federal funds runs out, the state would be on the hook for paying for these ramped up benefits.
 
“President Obama is trying to export the failed policies of Michigan, California, and New Jersey, which have left those state fiscally and economically devastated, to states that have governed responsibly and lived within their means like Texas.” continued Norquist. “Lone Star State Taxpayers owe a debt of gratitude to Gov. Perry for standing up to this and saying ‘no, thank you’ to this assault on their hard earned dollars.

 

 

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Tax Threats Loom Large on Golden State Horizon - Again


Posted by Patrick M. Gleason on Friday, March 13th, 2009, 4:08 PM PERMALINK

They're baaaack - calls for tax hikes in California that is.  Last month all California Democrats and 6 Republicans passed a budget that imposed the largest state tax increase in U.S history on Golden State taxpayers.

But now it seems, according the legislature's budget analyst, Mac Taylor, that the state is still going to out spend its means by $8 billion - shocker.

Taylor was quoted in today's Sacramento Bee saying the following:

"Even in the few weeks since the budget was signed, there have been a series of negative developments. Our updated revenue forecast projects that revenues will fall short of the assumptions in the budget package by $8 billion. Consequently, the Legislature and governor will need to adopt billions of dollars in additional solutions in the coming months to bring the 2009-10 budget back into balance."

California legislators don't seem to comprehend one of the few things that economists of all political stripes agree on - raising taxes during a recession is disastrous policy.  Furthermore, the deleterious effect caused by doing so is exacerbated by the fact that the state had the highest tax rates even before the increases signed into law last month (click here for ATR's commentary in the Sacramento Bee on that agreement).

As ill-advised as it may be - in terms of both policy and politics - smart money is on California Democrats coming back to demand more tax increases. The stage may finally be set for a serious taxpayer revolt in the Golden State.

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Arizona Spending Interests<br> Sit on a Throne of Lies


Posted by Patrick M. Gleason on Friday, March 6th, 2009, 11:54 AM PERMALINK

Only two days after Gov. Jan Brewer proposed billions of dollars in tax hikes in the midst of a recession, cheerleaders for tax increases in the Grand Canyon State have begun spreading misinformation.

Gov. Jan Brewer and 30 Arizona lawmakers have signed the Taxpayer Protection Pledge, which is a written promise to oppose any and all efforts to raise taxes. Make no mistake, this is a committment that elected officials make to their constituents, not Grover Norquist or Americans for Tax Reform. 

Anyone who claims otherwise is either misinformed or lying.  Need proof?  Just look at the language of the Pledge which can be seen by clicking here.

Click "Read More" to see the statement that Americans for Tax Reform sent to all Arizona media yesterday and click here for a pdf version.

 

Gov. Jan Brewer Proposes Billions in Tax Increases
Taxpayer Group Announces Opposition to Brewer’s Proposal
 
Washington, D.C. – Today, Americans for Tax Reform condemned Arizona Gov. Jan Brewer’s plans to impose billions of dollars in new taxes on Arizona families and employers. In 2006, Governor Brewer signed the Taxpayer Protection Pledge - a written promise to her constituents to “oppose any and all efforts to increase taxes.”
 
Gov. Brewer proposed raising taxes on Arizonans by $1 billion per year for up to 3 years. 30 Arizona legislators have made a written pledge to not raise taxes. Any tax hike proposal in Arizona must garner a two-thirds supermajority vote in both chambers in order to become law.
 
“The last thing you want to do in a recession is raise taxes.  Brewer’s proposal will do little more than hurt Arizona families, destroy jobs and encourage businesses to relocate across state lines,” said Grover Norquist, Presidents of Americans for Tax Reform. “Temporary tax hikes are about as prevalent in nature as unicorns. If you use a land line phone then you are still paying the ‘temporary’ tax hike put in place in 1898 to fund Spanish-American War.
 
According to the Center for Fiscal Accountability, Arizona taxpayers already spend 194 days – more than half the year – working just to pay the cost of government. Furthermore, many Arizona taxpayers are already wondering how they will cope if President Barack Obama’s budget – which contains more than $1 trillion in tax hikes over the next 10 years – is put into law.
 
“Arizona does not have a budget deficit. It has an overspending problem. Since 2004, Arizona’s spending grew by an astounding 57 percent.  Now Arizona is paying the price for years of mismanagement and fiscal vandalism under former Gov. Napolitano.” added Norquist. “As recently as 2006, Gov. Brewer made a written pledge to her constituents to oppose any and all efforts to increase taxes. It is unfortunate that Gov. Brewer has decided not to maintain this commitment as governor where she has the opportunity to enact necessary and meaningful reforms.  Some elected officials view taxpayers, rather than spending interests, as their constituents. Americans for Tax Reform commends those elected officials like Sens. Pamela Gorman (R-Anthem), Barbara Leff (R-Paradise Valley), and Ron Gould (R-Lake Havasu), who work for taxpayers rather than against them.”

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