So a number of propositions in Arizona aimed at gutting children’s healthcare and early education failed to pass. Arizonans may have elected Republicans nearly across the board, but they voted against robbing Peter to pay Paul – at least when Peter happens to be a a bunch of low-income children and Paul is the Arizona state legislature.
That means we’re going to have a budget shortfall of about $900,000,000.00 and change. That’s a big number, and quite a bit bigger than what the legislature was hoping for. But it’s also important to note that Arizona has relatively low taxes compared to a lot of states – not the lowest, to be sure, but far from the top. With a population of 6,595,778 people (in 2009) you could theoretically levy just $136 of new taxes on all Arizonans (I know, I know, that population includes kids so it would equal a bit more, and obviously it’s going to be income contingent, etc. but this is a thought exercise so just bear with me). $136 dollars in new taxes on every Arizonan would cover the shortfall without gutting public conservation lands or childhood education and healthcare, and honestly I can’t see how an extra $136 a head would seriously disrupt the economy or drive away investment or businesses or have much if any impact on job growth.
Or you could cut that in half and make up the difference with a new sales tax. Better yet, propose a combination of spending cuts (33%), increased income and property taxes (33%) and a hike in sales tax (33%). Then you’d see something like $45 dollars a head in new income/property taxes (progressive), $45 dollars a head in new consumption taxes (regressive), and $45 a head in decreased services which, theoretically, might be able to come out of inefficient spending, failed programs, and so forth.
Two things are important here: first, $900 million is a big number, but $136 per person is quite a bit smaller – so it really matters how you frame these issues. And two, compromise is possible unless one side refuses to raise taxes at any cost or, conversely, refuses any sort of spending cuts or reforms. Both are almost certainly necessary if we’re going to right our fiscal ship. Keeping taxes low and ensuring that Arizona is competitive for business investment and pushing job formation are all extremely important, but having a balanced budget is an important indicator of a state’s well being, and refusing to make the hard decisions to achieve that balance will ultimately hurt Arizona. Taxes and spending cuts need to be on the table.
Finally, the $345 million dollars the legislature was attempting to redirect from early childhood programs is funded by a tobacco tax. This is another avenue we could certainly explore to generate much needed revenue. An increase in sin taxes like the tobacco tax could help close the budget gap even further.
