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What the Devil won't tell you

Ducey, Az Legislature show silly moxie in tempting school-funding fates with tax cuts

I gotta hand it to the Arizona Legislature.

Those Republicans are bat-guano crazy, probably fascist and at times their revulsion against prescriptive measures to slow a pandemic could be be described as "homicidal."

But man, they've got balls.

The Republicans are sitting on a one-seat majority in both houses of the Legislature, with the state tilting blue-er by the election cycle. Then they pass a tax plan that seeks to completely undo Prop. 208 – a long-fought-for tax hike passed to lift Arizona from the national basement when it comes to school funding.

Voters approved by 52-48 percent in November the 77 percent tax hike on the richest taxpayers in the state to give schools an injection of cash long denied by the Republican Legislature. Republicans have held control of one or both houses since 1966.

No, 52-48 isn’t a landslide, but it’s what Brexit passed by and British Labor has all but destroyed itself trying to deny that reality.

The Republicans in the Legislature have told voters to bugger off. It's one thing to deny a gushing wound exists. It's another to pick the scab. That's what Gov. Doug Ducey will do when he signs this state budget into law. 

Before Democrats get too indignant, imagine if your party had just 10 percent of that swagger. They wouldn’t win elections and turn around and say “Golly, first thing we better do is make sure Republicans gosh-darn like us.” Climate change would be that thing the country dealt with 30 years ago. All 330 million of us would be carrying around health insurance cards. America would have a sensible immigration policy. Republicans would be Biff at the end of Back to the Future. Kyrsten Sinema would still be a Green Party agitator.

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The Washington Post has a piece arguing that the Republican strategy to win back Arizona through tax cuts could work.

Meh. It could in the short term. The state's one million public school students go to class every day in a system that is starved for cash and trailing the rest of the country. It's a reality that won't go away because Republicans shout "fake news." 

The move might not hurt them immediately if the economy is strong and Democrats in Washington fail to deliver.

But if the Democrats had done something like this, Republicans would make them eat it for breakfast, lunch, dinner and a midnight snack. Democrats can be counted on to limply swat at the Republicans pouting out the invective “You big meanie!” as the incumbents shrug and punch a migrant kid.

However, the Republicans are tempting at least two fates: the suburban vote and the somewhat awesome organizing capacity of Democratic constituency groups. The business sector is also not particularly keen on threats to K-12 funding.

What's in a tax cut?

The tax cut will create two tax brackets. The rate will be 2.55 percent on incomes less than $27,272 per year and on incomes above that the rate will be 2.98 percent. The tax plan also establishes automatic cuts in coming years if revenues break $13 billion — with a goal of eventually establishing a single 2.5 percent flat tax on all incomes.

The GOP budget promises spending increases for primary and secondary education. But the state will be able to do so only if revenues remain inflated by a good economy and a never-ending stream of federal COVID relief money. What's that? That COVID money was a one-time deal? Uh-oh. 

The state's own budget analysts say revenues will drop by $1 billion, which was exactly the amount of our state surplus heading into a pandemic that required federal relief.

Yeah, this isn't going to work. Arizona Republicans are betting money can be made off a bubble that has already popped. We've already seen tax cuts ballyhooed as revenue generators actually sink the budget in the late Brewer/early Ducey era.

Still, they press on like Tupac is still around.

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State House Majority Leader Ben Toma called it a quality of life thing.

"My goal has always been … to make it easier to do business and to live in Arizona, and that's exactly what we are doing here today," he said.

Well, I guess if all Toma does is pace his Peoria man cave listening to Michael Savage and getting madder and madder about taxes, then he has answered his own prayer. Now he just tosses and turns from any number of other blood curdling sources of paranoia pushed by right wing media "Caravans! Critical Race Theory! Bamboo!"

But Arizonans passed Prop. 208 because our state's schools suck. They are withering on the fiscal vine.

The condition of Arizona's condition

According to the U.S. Census Bureau, Arizona spent $8,600 per pupil on day-to-day  K-12 funding. That' represented a big jump after Ducey and the Legislature relented under pressure from the Red4Ed movement and a bunch of voters sick of this state ranking No. 49 in school funding. And that's after Ducey convinced voters to tap the state land trust to increase school budgets so we stopped ranking 49th. The state now ranks … hehehehe … we're still ranked 49th.

The state is 50th in non-instructional spending, 49th in instructional salaries, 50th in school per-pupil school funding as a percentage of state income. And Ducey just made sure that's not going to get better.

Now they're crazy but they are sometimes not stupid. Prop. 208 was a huge tax increase. It even gave me pause and this column cut its teeth banging the keyboard for more K-12 funding. It's a 77 percent increase in the top tax rate. Yikes.

Prop. 208 took Arizona’s income tax from the bottom five of states that have one to the top 10. The organizers sort of took 30 years of tax policy and threw it into reverse rolling down the highway at 80 miles per hour.

Prop. 208 could have blown the state’s economic transmission.

However, short-circuiting the tax hike before it took effect, Gov. Doug Ducey and the Legislature pre-empted the evidence that might have proven their point. Instead they just poked a fork in the eye of voters.

Yes, California has higher taxes. Its economy has problems. But Georgia and Minnesota have higher tax rates and just 4 percent unemployment. Arizona and Texas are stuck at 6.7 percent.

Ducey has said Prop. 208 put Arizona at a disadvantage against states like Florida and Texas (neither of which have an income tax). Those states, like Arizona, depend on migrants moving from high tax states to juice their economy. So business gets the best of both worlds. They get an educated work force and low taxes.

One problem, there, pardner. Native Arizonans, native Texans and Floridians are suddenly competing against better-educated out-of-staters.

We even have to import our governors from Ohio (Ducey), California (Jan Brewer) and Pennsylvania (Janet Napolitano).

Low-tax states absolutely attract a certain kind of business. High-service states attract another. Guess which pays better?

The goal of the K-12 funding is to make sure the state can rely on its residents to power the economy in the future.

I kid, because I love

Of course what Ducey and his partners in crime really want to say is: "Stop bitching and suffer. We don't want to pay for other people's kids."

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The Goldwater Institute will at least try to make the point. They point out that Arizona has actually increased school spending (adjusted for inflation) from $8,119 in 1980 to $11,594 in 2020.

They’re talking total spending – including capital costs. So let’s say we build a $30 million high school and budget 10 bucks per pupil to teach 1,000 students for a year. the price is actually $30,010 per student. That’s not the same as spending money to teach kids.

They're point though is clear. Stop complaining. The Legislature has done great with school funding.

"While it is true that Arizona has increased its per pupil expenditures less aggressively than other states,” yeah, 48 of them “…it continues to outperform many of these same higher-spending peers in both math and reading.” Yeah, three of them.

I’m not saying there’s a one-to-one link between funding levels and achievement but there’s also no one-to-one link in tax rates and state economic strength. Notice how Goldwater doesn’t conclude, “Man, Arizona has cut taxes again and again and again since 1990. There’s no reason to continue."

The odds are pretty good Arizona's failure to prove competitive won't be solved by cutting already-low taxes. I'm going to go with our lousy reputation as a place to raise a family because the schools are so underfunded.

Also, the folks at the Goldwater Institute would be standing on much firmer ground if the state didn't rank 49th. Proving its best to be last in that category is a lift.

(I kid Goldwater because I love Goldwater. They are at least arguing principle and policy and not Italian Jewish space lasers canceling Dr. Seuss by stealing the election from Donald Trump and giving it to transgender athletes. Respect.)

Moot court

Of course, all of this may be whistling past a couple grave yards because there are potential constitutional problems on both sides.

Ducey could face a court challenge here. Voters in 1998 approved a constitutional measure that forbids the Legislature from undoing voter-approved measures. The Legislature, however, wasn’t stripped of the right to cut and redefine tax brackets.

The bigger court challenge could face Invest In Ed. The state Constitution limits how much can be spent on schools to an amount Prop. 208 far exceeds. The justices seemed dubious during recent arguments regarding the case about letting the state just collect dollars that can’t be spent.

So the Invest In Ed crowd would be forced back to the drawing board and they are not out of turns. They are talking about legal challenges and referring the law to voters. 

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They probably need to go bigger. Play for checkmate.

They will probably have to put a constitutional amendment on the ballot in 2022 or 2024. It’s a heavier lift signature-wise. School boosters will be aided now in saying “Voters approved this law and Ducey ignored it. So we need to make it a constitutional amendment.”

An amendment instituting a tax for schools would end all arguments and box in a Republican Legislature.

Hear me, tide!

Bottom line: Teachers have to reach into their own bank accounts for classroom materials. That’s wrong. Arizona ranks 49th. That’s not competitive. Parents aren’t happy. New transplants are increasingly unhappy.

Arizona's evolution has come over time. In 2010, voters agreed to a half-cent sales tax increase to get schools through the Great Recession. In 2012, voters opted not to make that tax permanent by nearly 20 percentage points. So a four-point win fits the state’s shift away from the far right.

Voters seem sick of the status quo Ducey and his peeps in the Legislature are happy to continue, as interest groups like the Goldwater Institute cheer them on. They seem to be cheering in the wrong direction.

Democrats, meanwhile, suck at messaging but they can organize a field effort like an OCD stepmom. Ducey (and voters) just gave them the fuel and might even ensure a better turnout than would otherwise show up in 2022.

It might not matter in the short term because Democratic turnout will largely be tied to what happens nationally. Failure on Joe Biden’s part to enact big parts of his agenda could leave his party’s base at home.

The bigger problem the pro-Goldwater "taxation is theft" crowd has is that schools are going to continue to suffer and Arizona’s pupils will continue to be 49ers.

Riddle me this, Karen Fann: Do you think maybe right-wing insistence that Arizona’s stay cash-strapped is part of the reason the GOP is suddenly feeling the Democrats right on their heels?

It’s one thing to signal to the mob that Biden won Arizona because of voter fraud, it’s another to believe the GOP message is selling just as well as it did in 1994.

King Cnut the Great commanded the tides to recede. It didn't work. All he did was prove himself at the mercy of the inevitable. Times change. Arizona Republicans insist they can change, too, and bring the 1990s back just by raising their arms and shouting at the sky.

I should be angrier but I kind of admire the chutzpah.

Blake Morlock is an award-winning columnist who worked in daily journalism for nearly 20 years and is the former communications director for the Pima County Democratic Party. Now he’s telling you things that the Devil won’t.

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Gov. Doug Ducey and the Arizona Legislatue's tax plan pretends the political tides aren't turning. It may work out as well for them as did a Viking king.


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