Dogma Defeats Pragmatism
Conservative Dogma On Tax Cuts Compels Arizona Legislature, Governor To Cut The Heart Out Of The State In Order To Balance Budget
Taxes are an unfortunate necessity for the modern way of life. Image by Alan Cleaver.
By John Guzzon
Modern Times Magazine .com
April 5, 2011 — The deals have been made and the legislature has made its final votes. Arizona’s new budget only waits for Gov. Jan Brewer’s signature, which is expected this week.
Driven by dogma, the republican dominated government could not stand three more years of borrowing to pay for state programs, so they cut $1.1 billion. While some might hail that as a grand example of limited government and fiscally responsible conservative values, some republicans disagree.
"They simply passed onto us what inevitably is going to translate into property-tax increases," Maricopa County Supervisor Don Stapley, a Mesa republican told the Arizona Republic. "That's not conservative Republicanism. That's not limited government.”
Far from slashing a bloated budget that was rife with useless spending, after three years of progressing cuts the government was already pretty lean. Most of these cuts pass the buck onto to hospitals, colleges and universities and local government. These are basically essential services that must be funded. If the state government doesn't do it, another entity will be forced to make up the shortfall. Eventually, most of these cuts will still be paid by the taxpayer anyway.
Half of the cuts, or about $500 million, come from freezing enrollment of childless adults in the Arizona Health Care Cost Containment System. This funding cut will most likely be partially funded by higher rates for everyone else’s insurance company since hospitals will probably raise their rates. Those who need the welfare program will just be out of luck if they need healthcare.
As for most of the other cuts, the literal “passing of the bucks” will be more direct. County contributions for housing some mentally ill patients at the state hospital will double to about $2.75 million. The counties' share of gas-tax and car-registration fees have been redirected to the state general fund in order to pay for the Department of Public Safety and the Motor Vehicle Division. The budget also mandates Maricopa, Pima, Pinal, Mohave and Yavapai counties to contribute $38 million to the general fund.
Cities will also be directly impacted. They are being asked to collectively contribute $7 million to help fund the state Department of Water Resources.
Cities and counties will pass these costs along to residents either through new taxes or fees.
Got kids? You will be impacted, too. Starting July 1, a subsidy for child-care expires and will save $13.8 million for the state while turning away $40 million in matching federal funds. Those children of school age from kindergarten to university will see a state cut of $450 million. The university system itself will see a $198 million cut. Tuition at the major state universities is expected to reach $10,000 a year.
So, because of the budget cuts at the state level, Arizona residents will either be forced to pay higher taxes to counties and cities, while also outlaying more cash for college tuition. If it quacks like a tax increase and waddles like a tax increase, it is a tax increase.
No one likes to take money out of their own pockets, but our modern civilization is based upon taxes. We need things like a Motor Vehicle Division, universities and education systems that can create economies, standards and people who can fill high-tech, modern jobs. We also need clean and plentiful water.
The experiment to lower taxes beyond the point that we can sustain a modern state has failed. The combined impact of 42 tax cuts to personal and corporate income and sales over the past 18 years are to blame.
The bottom line is that the Arizona legislature has been an experiment in the "trickle down" theory. But now that there is less to trickle down, we are at the edge of disaster by way of dogma.
According to The Tax Foundation, the state/local tax burden ranking in Arizona has dropped 24 places from 17th highest in 1977 to 41st in 2008, and residents pay the tenth-lowest tax burden. Estimated now at 8.5 percent of income, Arizona's state/local tax burden percentage is below the national average of 9.7 percent. Arizona taxpayers pay $3,244 per capita in state and local taxes. Arizona's corporate tax structure consists of a flat rate of 6.968 percent on all corporate income which ranks 26th highest among states levying corporate income taxes. In 2008 state-level corporate tax collections (excluding local taxes) were $122 per capita, which ranked 33rd highest nationally.
Everyone knows that the services that are being cut are necessary and prudent for a modern economy, but dogma is a powerful beast, one that might just devour conservative ideology about tax cuts.
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