Saturday, May 2, 2015
Republican legislative leadership and the governor have justified shameful cuts to education and social safety net programs by claiming they were balancing the budget.
Under the auspicious of “making tough choices” to “balance the budget” they cut $117 million from K-12 funding, $115 million from higher education and millions from social safety net programs. But not only did they make the wrong choices, it turns out, they did not balance the budget.
The governor recently signed a law that will increase income tax deductions from certain, specialized business investments from $25,000 to $500,000 a year. This could cost the state another $31 million that wasn’t accounted for in the so-called balanced budget.
The Joint Legislative Budget Committee (JLBC), the Legislature’s budget office, shows that this law will leave Arizona’s budget structurally imbalanced for years to come. Here is a full analysis from JLBC.
Although education and social services will have to suffer more cuts, the Republican budget did fund new private prison beds, while protecting and expanding more than $3 billion in corporate and special interest tax cuts. Here is a list of some of the new tax cuts Republicans supported this year.
The state budget signed into law on March 7, 2015 assumed one legislative bill would pass thatwould reduce revenues
(HB 2001 - Income Tax Brackets; Inflation.) Since then, the legislature passed and Governor Ducey has signed into law more tax cuts that will reduce revenues beyond what was assumed in the budget plan. These tax cuts include:
• SB 1188 - IRS Conformity - increases the income tax deduction for certain business expenses from $25,000 to $500,000 at a cost of $31 million a year.
• HB 2670 - International Operations Centers - reduces revenues by $1.3 million a year and gives a tax break to Apple for their new operation center.
• HB 2128 - Leased Religious Property - reduces property taxes for religious organizations that use leased property for worship. The $2.1 million in reduced property taxes means the state's K-12 education budget will make up the difference.
• HB 2568 - Insurance Premium Tax Reduction - gradually reduces the premium tax rate for some types of insurance from 2% to 0.3% over ten years. Starting with a $1.3 million impact in FY 17, this legislation is projected to cost $35.2 million when fully phased in.
Posted by Barbara at 6:32 AM