Editorial: State needs to share the wealth
To hear it from some lawmakers, the state has too much money; they want to give a bit back to taxpayers. Talk to others and you get a picture of statewide needs not being met. Question is: Who or which need should get the money?
Let’s look at why the state has an excess of revenue.
First and foremost, the state “conformed” its income tax structure to changes in the 2017 federal Tax Cuts and Jobs Act. It eliminated many available deductions, replacing them with a higher standard deduction. But even with Arizona increasing its own standard deduction, many people still ended up paying more because of those lost deductions.
Another reason Arizona has more money this year is rooted in the decision by lawmakers to begin taxing online sales, after a U.S. Supreme Court decision that said states are free to levy their taxes on all sales made into the state, regardless of the source. Previously, anything ordered from out-of-state retailers who had no physical presence in Arizona, like a retail store or distribution center, was exempt.
Bottom line, as previously reported, the state could see anywhere from $750 million to $1 billion in extra tax collections for fiscal year 2020-21.
Knowing that, on Wednesday, Feb. 12, the House Ways and Means Committee approved HB 2778 — on a party-line vote — an across-the-board cut in individual income tax rates. That move could reduce state revenues by $100 million a year, though the benefit to individual taxpayers varies. It still must go before the House to advance.
Not much, right? Except, remember that K-12 education remains underfunded compared to other states, as well as what public education formerly received from the state. Then there are a few others, for example, Highway User Revenue Funds (HURF), money for roadway maintenance and, of course, the taxpayers themselves.
Joe Howard and Dan Streeter, superintendents for Prescott Unified and Humboldt Unified school districts, respectively, appreciate the funding they are getting from the state for teachers’ pay and other needs; however, the ledger is still millions of dollars in the red when one looks at state cuts and inflation since the Great Recession.
Rep. Noel Campbell, R-Prescott, wants the state to fix or modernize its part of gasoline taxes, which would pay for maintenance for the state’s roadways and bridges. Many are in disrepair, with some rural counties needing $1 billion each to bring them up to standards.
We see this as a Catch-22. The state has extra money coming in — officials could keep it for state needs, such as education or road maintenance; they could give part back to taxpayers; or they could bank it, like Gov. Doug Ducey has suggested, in the Rainy Day Fund.
All of the above needs to happen.
As Rep. Joanne Osborne, R-Goodyear, told Capitol Media Services: “There are always needs. We certainly could spend every dollar that is here.”
So let’s divvy up the bounty — help education more, fix the roads and bridges, looking at needs. And, show good faith and pay some back to the taxpayers.