Brew(st)er's Billions

Governor Brewer released her budget Monday. She predicts a $4.0 billion budget deficit in the '09 - '10 fiscal year. Here is what she proposes:

• 1% sales tax increase for 3 years
• 3 years phase out of the county school equalization tax (loss of $250 million revenue)
• 33% reduction to the corporate income tax in 2012 (loss of $250 million revenue)
• Continues to lower the business property assessment ratio (determines business property taxes) and proposes to reduce it by another 25% in 2012

It is odd that she seems to be increasing the deficit by slashing revenue streams in a year we have already made significant budget reductions.

The governor also wishes to call a "do-over" on all initiatives and referendums passed by the Arizona voters between 1998 and 2004. She wants a referendum passed in 2010 which would place each and every successful state question from 1998 until 2004 placed on the 2012 ballot.

This would include "Prop 301" from back in 2000 which created the Classroom Site Fund (those are the summer checks certificated employees receive). It would also include "Prop 202" from 2002, also known as the Indian Gaming Preservation and Self Reliance Act. Losing either of these would impact schools greatly, but they are not the governor's goal. Her goal can be quickly understood by this press release issued by the Goldwater Institute almost a year ago to the day:

Goldwater Institute Policy Report
June 03, 2008

State legislators are further constrained by successful referenda of the past two decades.

The 1998 Arizona Voter Protection Act requires a three-fourths supermajority of legislators to alter spending on programs created by referendum, regardless of the level of need. The effect has been to prevent lawmakers from weighing need in one area against another where the voters have intervened by referendum.

Perhaps the most restrictive proposition, and certainly the biggest one in terms of driving the growth of spending (both state and federal), has been Proposition 204. Enacted by popular referendum in 2000, Proposition 204 greatly expanded Medicaid eligibility and dedicated the proceeds from the state’s 1998 settlement with the major tobacco producers for AHCCCS.

The governor is targeting a decade of progressive legislation and voter protections in the hopes of currying the favor of conservatives to pass her budget. Her budget places the tax burden squarely on the shoulders of the middle and working classes, while greatly reducing taxes paid by corporations.

And if you thought it could not get worse... it does. She also wants to cripple the state with TABOR-like restraints on growth in the state. TABOR somehow stands for TAxpayer Bill Of Rights, but it is simply a quick way of recklessly ratcheting down spending. In a rapid-growth state like Arizona, this would greatly strain even basic services such as police, fire, and schools.

Google TABOR and Colorado to see how it nearly put that state back in the Stone Age.

Given the amount of time Governor Brewer has had to work on a budget it is a little surprising to see some of these items come out this late in the budgetary process. I had hoped for creativity and consensus-building.

I guess she has other plans.