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Our View: State leaders counting too much on rosy tax revenue projections

January 3, 2019

Arizona’s elected leaders say the state is rolling in the dough and there are plans aplenty to spend it. Not so fast.

Those who say Arizona’s government has lots of money base their statements on:

• A tax revenue surplus that is very real, generated from a strong economy over the past year.

• A new fee for car registrations that is double what legislators were told it would be.

• Gov. Doug Ducey’s plan for a huge stealth income tax increase by disallowing current deductions to match the new federal income tax structure.

So why not spend it? Well, for starters, the surplus money is already largely obligated for future teacher raises. Should the economy falter, so will tax revenues and the people of Arizona will be left with the bills from the Legislature’s kick-the-can approach to spending.

Secondly, the new car fee may or may not stand. A number of lawmakers were surprised when the new fee came in at $32 per vehicle instead of $16 and many people are loudly grumbling. The fee is to go to support the Department of Public Safety so that money earmarked for roads can be spent on them instead of DPS. Thirdly, if lawmakers support Ducey’s tax plan, they should all be tossed from office. Ducey says his plan isn’t a tax increase, but it will force many if not most Arizonans to pay more taxes. Call it what you like, we guess. Why is it bad? Because, unlike the new federal tax structure, it doesn’t provide for tax reductions as it eliminates deductions so it will simply cost more to pay individual income taxes in Arizona.

Surprisingly, top legislators are ignoring these important details as they plan for the upcoming session. Senate President Karen Fann and House Speaker Rusty Bowers both say providing raises for state troopers is a top priority.

State troopers work for DPS, so shouldn’t any raises be covered by the new car fee? We certainly think so. We certainly want fair pay for law enforcement but raising pay for state troopers sets off wage races with local and county law enforcement agencies who stand to lose people to DPS if state pay goes much higher. That would force local pay upward and leave local taxpayers with the bill.

Arizona’s Legislature and its governor need to focus on a conservative approach to spending in the next session. Republican leaders need to retain their political core value of limited government and adopt a “pay-as-you-go” approach that saves taxpayers and the state from once again spending money based upon nothing more than rosily optimistic revenue projections.

— Today’s News-Herald

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