The Arizona Legislature every year deals with many decisions and challenges. This year, a key one is deciding what to do with a surplus of money. While that is an enviable position compared to many years, finding a compromise no doubt will be difficult. The best answer certainly will be a middle road.
The House Ways and Means Committee last week voted, with majority Republicans in favor and Democrats opposed, to reduce taxes by nearly $162 million in the year beginning July 1. Much of that would be in individual income taxes.
Arizona budgets suffered greatly during the Great Recession and only now are recovering. Yet a strong economy has made them really solid. Of course, the economy will not continue at this pace indefinitely. Maintaining a rainy day fund is part of good government.
The state also is receiving a big infusion with its new ability to collect sales taxes on online purchases. That merely is money that governments would have been receiving all along if not for growth in internet sales and a lack of ability to tax them.
Meanwhile, there is a strong conservative view that taxpayers should be able to keep as much of their own money as possible and decide how to spend it instead of turning it over to government, which doesn’t have a reputation for being really efficient.
Another aspect of the state treasury’s status is a recent change in federal tax law that raised the standard deduction and removed the tax incentive of some people to make charitable donations. The bill as passed includes $2.1 million in lower taxes due to donations, with the amount rising in future years. The amount of that increase will need to be negotiated further.
The task of legislators is to come up with a plan that funds education and other needs adequately without taking too much out of the pockets of Arizonans. Perhaps the situation was summed up best by Rep. Joanne Osborne, R-Goodyear, when she said, “There are always needs. We certainly could spend every dollar that is here.” However, she pointed out the job of legislators is to achieve “balance.” Well said.