Posted Dec 6, 2011, 2:11 pm
House Appropriations Committee chairman John Kavanagh made an appearance on one of our local radio stations last week touting the news that our state's budget situation won't be nearly as dire next year as everyone thought it would be.
This is what passes for good budget news from our state's leaders these days.
Kavanagh further made the assertion that this was done without raising revenues.
I don't want to call anyone names, so let's just say that the facts Kavanagh is asserting are conveniently incomplete.
There is, in fact, $308 million in new revenue for the state. That's the amount that foreclosed homeowners can no longer claim as a mortgage interest deduction. I can't blame Kavanagh for not bragging about this one. Even in a legislature as crass as this one, crowing that the state is in better fiscal shape because people have been thrown out of their homes would be a bit much.
Legislative Republicans like to claim that they don't raise taxes on people, but they, in fact, raised taxes on property owners throughout the state. A provision in an education bill passed last year raises $70 million in, yes, revenue by ending a rebate for homeowners in many school districts. The change particularly effects rural school districts and districts, like TUSD, that incur extra costs because of desegregation orders.
And for homeowners, the increased property tax bill goes beyond ending the rebate. Former House Speaker Kirk Adams's corporate bailout package that passed shortly before he left to start his run for congress included provisions to decrease commercial, industrial and agricultural property taxes. While the bill doesn't explicitly increase residential property taxes, that will be the effect since residential taxes will be raised by localities and school districts to make up the difference.
Legislators knew this and included increasing an existing rebate (not the one they eliminated, of course) to somewhat blunt the effect on homeowners. Still, it is part of a longer term attempt to transfer the property tax burden from corporations to homeowners.
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Of course, the rebate will be harder to collect after another idea that got pushed through last year. The rebate is given nearly automatically these days. The state makes the assumption that homeowners are basically honest and aren't lying about where their primary residence is.
But, no more. Next year, the assumption is that every house is a rental or vacation property and homeowners must sign an affidavit certifying that either they or a family member lives there. If you don't, that home where you are living is now a second home and you are out the rebate, which could be up to $600.
One could easily imagine a confused homeowner throwing away the post card affidavit rather than signing it. Their budget numbers are counting on thousands of people doing just that. It's the only way they can keep any veneer of fiscal responsibility while continuing to lower property taxes for corporations and other large property owners.
Confusion is a feature of this process rather than a bug. The legislature hopes that a rebate here and there will obscure the real aim, and it doesn't have anything to do with balancing the state's budget or lowering taxes on the average homeowner.
1 comment on this story
You have to pity Democrat activists, such as Ted. Their “progressive” (aka liberal)policies have made the recession worse, thus dashing President Obama’s re-election chances. Yet Arizona, with its conservative state legislature and governor, is slowly recovering.
Rather than be thankful, Ted seems compelled to go into attack mode to the degree that he is even attacking the legislature for taking steps to prevent people from illegally claiming a tax credit on second homes and investment property. Ted, you are supposed to be attacking the evil 1%, instead of helping them!