Here and Now - Arizona's Fiscal Nightmare

I am a State worker for the last 8 years. I am insulted by the thought that by reducing state employees' pay by 5% will somehow fix the budget crisis in part. Historically, state workers are underpaid using salary guidelines, and now we are further underpaid by another 5%. I do not think this is fair at all. There are many caring and hard working people doing the jobs of more than one after the recent layoffs of more than 4000, and now we work for less, doing more, with no regard for our welfare. I love working for the state and giving back to my community, but I wonder how many of us will be doing this next year, I know I can't afford to work for 5% less and will be looking for employment elsewhere. To add further, the mandatory retirement deductions will be increasing in July, so that effectively reduces pay by another lump that we cannot afford.
If someone can explain to me how this is (a) fair, (b) will assist in reducing the budget that we did not increase in the first place, I would appreciate it.

I am a state employee...it has been widely reported that the recent sale/leaseback of state buildings transaction is to generate something like $750 million in cash to "cover warrants/committments (i.e. pay state bills, payroll) for FEBRUARY."
Question: What happens in March?

Approach that has been taken makes no economic sense. Cutting education and other basic service or privatizing them and selling public buildings and property will be extremely counter productive and more expensive in the long run. For example unemployed state workers including teachers are losing homes, not able to generate the taxes they formerly did (multiplier effect -economics)

Solution increase tax revenues. 10% excise tax or sales tax on distilled beverages and carbonated drinks -- ear marked for education and social programs.

Revise and simplify state income and corporate tax structure removing off provisions that do not raise revenue( i.e. tax credits which are uncontroled spending) I those expenditures are important the legislature should be willing to appropriate them in the budge process.

Tax all income from all sources. No special breaks for industries such as Chicago Cubs, walmarts, MCI's etc.

Taxes should be progressive with floors not ceilings.

Sales taxes should eliminate all excemptions

With regard to budget sweeps:
How were the original funds established? By legislators or voters?
What authority does the legislature have to "sweep" those funds?
Of particular interest are the State Parks funds and the OHV funds paid by licensing Off Highway Vehicles.

One of your guests commented that Arizonan's are not interested in an income tax increase and thus that topic is off the table. However, there is legislative and administration discussion about rescinding voter mandated expenditurtes funded by specific taxes and using the revenue to balance the state budget. Please have your guest comment on this seeming contradiction of consideration of taxpayer preferences.

I agree with the caller from Mesa that state income taxes would be a better and fairer means of increasing revenue for the state. In addition, my property taxes are incredibly low compared to what I pay for my property in WA state. I would be HAPPY to pay increased property taxes to support our schools.

Pat,

I'm not sure what 'specific' taxes' you're referring to. Prop 204, which expanded eligibility for the state's Medicaid program (AHCCCS) relied on tobacco settlement money and general fund money--no taxes. First Things First uses tobacco taxes, but I believe lawmakers want to use that money for related expenditures. Is there something I'm missing?

Unfortunately the areas which are being cut are those which make Arizona stronger or weaker and our country as well. My generation (I'm 69 inhereted the best schools, infrastructure,etc and a government that functioned. They paid much higher taxes than we do and had much more economic security and less of a gap between rich and poor. Then the lessons learned from the Great Depression were not learned, by the subsequent generation or ignored as power brokers pushed the idea that government is the problem and did their best to make it a problem. Greed and selfishness.
Paying taxes and obeying the laws is all most of us are ever asked to do for our state and country. Milton Friedman economics does not work in the long run -- I disagree about tax increases -- trickle down has not worked -- look all around us at what has caused this mess. Tax cuts in the past have contributed to Arizonas problem now --

Lets keep public what is public not privatize it and get the government out of what is private and stop subsidizing private businesses etc.
Including those Tax credits to which I referred in earlier e-mail

"By most measures, state spending has increased rapidly in recent years, especially since Napolitano took office in 2003. Goldwater Institute budget analyst Byron Schlomach points out state general fund spending increased by 66 percent over the past five years while population and inflation combined grew by only 33 percent."

If this is correct, we've simply increased spending too much and need to roll back some of the increases of the past 5 years.

Conservatives have often said that at home when money is tight, the budget is cut; they don't realize that in many homes when no more cuts can be made, someone gets a second job.

We need more taxes to pay for necessary services, no ifs, ands or buts. Our legislature has shown a monumental lack of leadership by refusing to allow more taxes. Some are passing the buck by handing over necessary programs to the counties - which will have to tax the citizens to pay for them, and others are trying to ask the voters to decide, rather than doing what they were elected to do: take care of the state. Besides which, putting a tax on the ballot will just cost the state more money.

As we are seeing budgets cut, and the possibility of a 5% cut in state employee paychecks, will those cuts also be reflected in the governor's and legislators' pay checks and budgets?

We cannot afford more cuts to education, services, the arts, etc. What business wants to relocate to a state that has such a low school rating, refuses to provide family services and encourage the arts?

We need an educated citizenship for democracy to work and for our workforce.

A few suggestions:
-user charges for parks
-have those on unemployment rolls work in the parks, schools, etc.
-as suggested by a listener: taxes on candy, junk food, luxury services such as manicures, pedicures, spa treatments...
-cut legislative budgets; no daily funds for special sessions; 5% pay cut for legislators and governor and all assistants.
-if security is cut for the citizenry, it should be cut for the legislature and governor.

I'm sure if you ask the taxpayers, they could come up with a lot more cuts, and a lot more ideas for generating revenue.

Sharyn, I agree with your itemized suggestions; especially the legislative and executive cuts. But spending cannot sustainably grow faster than population, inflation, and GDP. Hasn't state spending increased about 11% annually the past 5 years while GDP ran a bit over 6%?

Arizona has increased it's proportion of general fund coming from sales taxes, so it's no surprise there's a shortfall now that the economy has stumbled. And sales taxes are marginally regressive, so it's hard to argue they're fair to lower income families. How about moving to a VAT that also taxes services? Not perfect, but probably better than the current system.

Thanks for all the great questions and suggestions!

Paul