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30th March
2009
written by Arizona Kid

House Democrats unveil budget fix

Howard Fischer, Capitol Media Services

March 30, 2009 – 5:13PM

Key elements include:

• Rolling back a 10 percent income tax cut enacted in 2006, but only for those at the top of the income scale; (a.ka. Robin Hood)

• Suspending the ability to get dollar-for-dollar tax credits for donations to help students go to private and parochial schools;

• Suspending a similar tax credit for donations for public school extracurricular activities.

There also would be a new tax on fossil fuels. But Democrats said a majority of the $233 million raised would be passed along by utilities to their out-of-state customers. (Are you kidding me?)

House Minority Whip Chad Campbell, D-Phoenix, pointed out that Gov. Jan Brewer is proposing a temporary $1 billion tax hike for the next three to four years. (Good luck on getting re-elected)

Campbell said a 1 percent tax hike, which would get the income desired, would cost the average family about $360 a year. By contrast, he said the House Democratic plan would add no more than $100 a year to an average family’s tax burden.

There would be differences.

For example, the plan would rescind a 10 percent cut in individual income taxes enacted by lawmakers three years ago, but only for individuals making more than $150,000 a year, or $300,000 for couples. Campbell sidestepped questions of whether that amounted to class warfare. (see Robin Hood above.)

It also would suspend tax credits for donations to organizations that help students attend private and parochial schools.

In 2007, the most recent data available, individuals diverted more than $54.2 million to those programs; corporations claimed $2 million for 2006 according to the latest figures.

Backers of the credits say the lost tax revenues are less than what taxpayers would pay to send the youngsters to public schools. (BINGO!) But Campbell said that’s true only if the students would have been going to public schools in the first place.

“A lot of these tax credits are not being taken by lower income families, they’re not being taken by lower income kids,” Campbell said. “They’re being used by people that I have personal belief probably could afford Brophy if they wanted to go to Brophy,” referring to Brophy College Preparatory, which is run by Jesuits. (Add up to 20% of the private school kids to public schools and watch what it does to your state educations spending.)

But Campbell acknowledged he has no statistics to back up his claim.

Paul Mulligan, director of the organization that provides scholarships to Catholic schools in the Phoenix diocese, said about 60 percent of the 13,000 students get some form of financial aid. He said about a third of those are from families earning less than $30,000 a year; 63 percent have household incomes of less than $50,000.

Gracie Quiroz, his Tucson counterpart, said 78 percent of the recipients are children in families earning less than $50,000 a year for a family of four.

And the Brophy Community Foundation, which provides scholarships for students to attend that school, says on its Web site all aid is based on need.

Campbell, contacted later for a response, said any family getting taxpayer-subsidized help for tuition that doesn’t need it is too much.

“If I were to go out and say 30 percent of taxpayers in Arizona aren’t paying their taxes, people would be in an uproar,” he said.

The Democrats also propose to suspend a similar program that gives donors a dollar-for-dollar credit for funds donated to public schools for extracurricular activities. Campbell said the need for cash to keep schools running makes that credit a luxury the state cannot afford.

“Do you want your kids to go to New York City, or do you want your kids to find New York City on a map?” he asked.

Rep. Kyrsten Sinema, D-Phoenix, the No. 2 House Democrat, conceded the plan as crafted is never going to become law. (Thank God!) Instead, she said, it represents a starting point for negotiations with the Republicans, who control the House and Senate, whose plan includes no new taxes and $740 million or more in spending cuts on top of the $580 million already sliced to balance this year’s budget.

That, however, isn’t the only obstacle it faces: Senate Democrats have their own plan to balance the budget.

There are some elements in common, including restoring the state property tax and suspending some tax credits. But Senate Democrats propose to bridge the deficit with $500 million in long-term borrowing.

106 Comments

  1. Iron Viking
    01/04/2009

    The carbon tax is the one that really frosts me. Everyone pays it, including the poor and middle class. And it will only go up. If it passes, we’ll soon hear of seniors who died or suffered injury due to fear of running the A/C too much.

    It’s bad enough to be paying an extra $2+ a month for power for every 1% produced by alternative energy in accordance with a new state law mandating 15% gren power by a certain date.

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