Arizona’s Budget a Model for the Nation

In Current Events, Economics, Election Politics on February 20, 2011 at 17:47

While tens of thousands march in Madison, Wi. as their governor attacks collective bargaining so he can unilaterally cut wages in the future without talking to workers, the Arizona state legislature passes a $538 million tax cut for corporations. The Republicans in the state argue that it will create more jobs, but there is no evidence that tax cuts create jobs. A drop in unemployment following a tax cut does not prove causality any more than a drop in unemployment after a tax raise.

As Jon Shure from the Center on Budget and Policy Priorities in Washington, D.C. points out in the Arizona Republic,

There is no guarantee the money a business saves from a tax cut, such as the nearly 30-percent cut to the corporate income tax Arizona lawmakers just approved, will stay in the state, he said.

Meanwhile, budget cuts could dull a state’s appeal to employers looking for skilled workers or a strong school system, he said.

“The role of taxes is making sure you have the resources to invest in the things that make a healthy economy,” Shure said. Those range from a reliable transportation network to safe, livable communities.

“There’s so much more that makes a business decide to move than taxes,” Shure said. “Such as, ‘How do I move goods to market, how near am I to my customers, what about a skilled work force?’ “

In the meantime, Governor Brewer and the Republican controlled legislature also cut programs that help thousands of Arizona. First, there are the cuts to Medicaid that have been approved by the Obama administration.

The effects, unsurprisingly, could be devastating. In Arizona, if Governor Jan Brewer’s budget is enacted, 280,000 poor people will lose their Medicaid benefits.


“HHS Secretary Kathleen Sebelius has approved a request by Arizona Governor Jan Brewer to cut the number of Medicaid beneficiaries in the state by 250,000, saving $541.5 million, according to a Bloomberg report.

Interesting that the tax cuts equal about $538 million, nearly the same amount as the cuts to Medicaid.

This cut is on top of the cuts to AHCCCS payments for transplants, a savings of a meager $1.4 million, which lead to two deaths of people on the top of the transplant list. As of November 2010, there were 98 people on the transplant waiting list in Arizona. http://www.cbsnews.com/video/watch/?id=7357081n If you want to lure people, jobs and corporations to Arizona, perhaps a functioning health system is a good place to start.

Forget about insuring children. KidsCare, a program to give insurance to children 200% below the poverty level is gone. Healthy Arizona, a program to insure poor adults, has also been eliminated. Do you see a pattern here? If you are poor and live in Arizona, help is NOT on the way. But please feel free to serve the rest of us our fast food, clean our toilets, stand outside holding signs with arrows pointing toward strip mall tax services or work our call centers for us.

Cutting health care for the poor will lead to higher use of more costly critical care services and in the long run not save the state money. However, most Republicans in Arizona can’t show any signs of weakness: caring for those less fortunate. Eventually the health care costs get passed on to the rest of us through higher insurance premiums, premiums the state dare not regulated.

As long as the increase is not paid for in taxes up front, the politicians in Phoenix can create distance between themselves and the rising health care costs. People in Arizona will continue to vote in a majority Republican legislature. That is until them scary Mexicans take over the state, but that’s for another article.

Moreover, state workers in Arizona have been given a 5% pay cut, mostly through furloughs. As long as corporations get their tax cuts, things will work out, right?

Corporations depend on consumer and government spending. The tax cuts that are created to help companies will lead to more public sector lay-offs and less consumer spending. These cuts and layoffs will further damage the already fragile consumer confidence of those lucky enough to have work while hurting those less well off in Arizona. This will hurt the companies Brewer thinks she is helping. Of course, we know what companies will really benefit with further layoffs and cuts in pay: the private prison industry. Brewer is indebted to them, specifically the Corrections Corporation of America, for supporting her reelection, so that’s no big deal.  (Link)

Cuts to education, around $300 million dollars this year alone for k-12 and college http://www.wsws.org/articles/2010/mar2010/ariz-m22.shtml , will leave Arizona’s children unprepared for the workforce. With rising tuition, students will be priced out of universities unless they take on tens of thousand of dollars in debt. With few prospects of good jobs, fewer people will take on the cost of a four-year degree. Community colleges, the best U.S. contribution to education in the last fifty years, will have larger enrollments. However, with budget cuts, colleges will have trouble meeting the demands of this growing population.

So while the Arizona legislation cuts programs helping the poor and middle classes in Arizona, they give away money to corporations with the hopes that jobs will appear like manna from the sky.

Please call the Governor and tell her how wrong she is.
Telephone (602) 542-4331
Toll Free 1-(800) 253-0883 (within Arizona only)

Tex Shelters

  1. Tex, what the fuck? Good grief. This has gone beyond the merely unconscionable or terrifying.

    If we succeed in our efforts to murder or totally confuse the poor bees, we won’t have all that many more years for it to matter anyway – only several years during which all most of us will be doing is looking for a head of lettuce to eat.

  2. Leeza,

    Well said. That would be a great blog: “Looking for a head of lettuce”.


    Tex Shelters

  3. My brother is a teacher in AZ and has talked about how dismal the school system/education is. The housing market is one of the top worst in the U.S. and the cuts they just gave to corporations didn’t help steal away a company here in Columbus, Ohio that they were going after. Of course, Ohios newest Dictator Elect Kasich is strong on the heals of AZ and is biting at the bit to make the same compromises for everyone from middle class down.
    Funny thing is, in job creation, it usually just involves moving a company from one state to another. It doesn’t create NEW jobs, it just devastates other communities. Ain’t that just peaches and cream. Why isn’t the thinking that if you raise ALL corporate taxes across the board, when there is job creation it exists on a level playing field and benefits everyone? Ah, such a socialist idea I know. I should be of the mindset of helping make others poor so the I may be ‘less’ poor. 😛

    • Thanks Lady B. The reason states can’t raise taxes equally is the anti-trust laws prevent them from “colluding”. It’s sick, isn’t it? Laws set up to prevent trusts are used against states and unions.

      Thanks. And yes, new jobs are rarely created these days.

      Tex Shelters

  4. Hiya. Haven’t been around much because I, like so many citizens, have been trying to do three people’s jobs for the price of one (or maybe half of one? ;). Can hardly wait to see what our Texan immigrant Governor is about to do to us… things are already pretty ugly…

    All I can say is that I hope Wisconsin is only the beginning.

    A budding new action organization you might want to have a look at:
    U.S. Uncut
    Say No to the Cuts. End Corporate Tax Avoidance.

  5. Tex, I come from a “Pro-Labor” Democratic Party Family, so I’m not totally against labor. But Taxes, Wages, Regulations and Unions do affect whether a company closes up shop, moves or builds in an area. Taxes and Cost of Living also affect where people live. NW Indiana has had a tremendous influx of educated and skilled people from the Chicago, IL area. Why because we have far lower taxes and you can buy twice the house in a good neighborhood for half the money. As far as getting your goods to market since the interstate highway system came into being and the use of piggyback trailers and containers on the rails getting goods to market have little bearing on any transportation needs across the US. You have car plants and factories moving or building in “Right to Work “states instead of the industrial Midwest. Now on to Government Jobs, I don’t feel Unions have any place there since the workers generally have a stranglehold on the only game in town whether it’s the Police, Firemen, School Teachers, Garbage Truck Drivers or Snow Plow Drivers. When those workers strike they have the publics nuts in a vice, if you don’t think so let garbage pile up a few days in the city and then tell me different.

    • So what about corporations getting roads, water, land and other public good for free and not paying taxes?

      Shouldn’t they pay their share like the rest of us?

      There are laws to prevent strikes in “vital services”. So I am not worried about it. And what about the monopoly power over jobs the employer has? The only way the unions have any power is to threaten to shut down. And what about cutting health care and education so corporations that already benefit from us pay less?

      Tex Shelters

      • Well the schools in this area are financed a great deal thru the Mills. As far as roads are concerned I can assure you that anyone who ships anything by truck pays highway tax thru the trucking companies who are taxed for the fuel they use, the tires they use and anything else that is used on a truck. I don’t think they have figured how to collect the lot lizard tax yet but I’m sure someone is on top of it, there’s a gold mind in that trade if the government can figure how to collect.

        • So that would be a use tax. State’s I’ve live in pay for schools through property taxes, and that gets passed on to renters.

          There are so many taxes that I can’t keep track of them.

          Tex Shelters

  6. BTW Tex as a Truck Driver who used to haul into steel mills, to and from refineries and to and from auto plants, I have been asked to cross picket lines to move freight and have refused too even when threatened the lose of my job. So like I said I’m not 100% anti-labor.

    • Jake,

      I realize that you are moderate to conservative and am not worried about you being a union busting bastard.

      What is long haul or short runs?

      Aren’t most of us labor, and so wouldn’t we all be partial to labor of some kind?

      Tex Shelters

      • Long or short runs? I would consider anything over 700 miles a long run. Chicago to LA is over 2000 miles that’s a long run, Chicago to NY City would be a short one. I started as a OTR out for up to 3 weeks at a time than after 1 year went regional (East of the Mississippi) out for a week at a time. Local which I’m now is home daily but can amount to less than 100 miles or as much as 500 or so miles of driving each day .

  7. Such a beautiful state to make into such a bad place to live. I don’t get it.

    • Thanks Wes. There is much to commend Arizona for. Now, if we could replace the 2 million Republicans with Mexicans and Liberal Irishmen, we’d be getting somewhere.

      Tex Shelters

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