ATRA in the News: State Budget
The Arizona Tax Research Association, a fiscally conservative organization once on record supporting the sales tax referral to the ballot, has since changed its position. Director Kevin McCarthy said the state has not done the hard work it needs to do to clamp down on spending, and he won't support any new revenues until that happens.
After adjusting for accounting tricks, state general-fund spending topped out at $10.5 billion in 2008, according to the Arizona Tax Research Association. After the last round of budget cuts, state general-fund spending is authorized at about $10 billion for this fiscal year, or a reduction of around 5 percent.
"We need at least four members of the Democratic caucus," Burns, R-Peoria, said late last week, after discussing the state budget at the annual tax watchdog luncheon of the Arizona Tax Research Association. He said he and other legislative leaders planned to spend the weekend looking for those votes.
President Kevin McCarthy wrote that its support was contingent on the tax increase being used to cut the deficit, not pay for increased spending. McCarthy told our reporter that ATRA's board of directors was caught off guard by Brewer's vetoes last month.
PHOENIX—A prominent business advocacy group has withdrawn its endorsement of Arizona Gov. Jan Brewer's proposal for a temporary sales tax increase to help balance the state budget.
There is no allowance in the state Constitution for what has transpired during the past two months, said Kevin McCarthy, president of the Arizona Tax Research Association, a public finance and tax policy think tank. McCarthy said the Constitution “does not contemplate us being in mid- August and not having a budget.”
"There are really no good options to get out of this mess that anyone's happy about," said Kevin McCarthy, a longtime Arizona resident and the president of the Arizona Tax Research Association (ATRA), a Phoenix-based finance policy group.
"In no small way, our property-tax system is a job-killer," said Kevin McCarthy, president of the Arizona Tax Research Association. "It's the equivalent of putting a stop sign at the state border saying, 'You don't want to come here.' "
Kevin McCarthy, president of the Arizona Tax Research Association, says he was surprised to find the idea in the $8.2 billion state budget passed last week by the GOP-led Legislature, but supports it nonetheless. McCarthy says the plan doesn't constitute an immediate tax increase because it only affects bonds passed by voters in future elections.
Kevin McCarthy with the Arizona Tax Research Association doesn't believe Republican lawmakers will agree to a tax increase. He predicts the issue will be put to a vote in November. "At the end of the day I think you'll see a referral that will allow citizens to have the final say on whether or not we'll have a tax increase," said McCarthy.
McCarthy points to the fiscal 2008 and 2009 budgets as particularly heinous examples of unwillingness by state officials to rein in spending in anticipation of a downturn. The signs were on the wall that the one-time revenues resulting from the housing boom were about to evaporate.
The Arizona Tax Research Association, a business-backed lobbyist group, recently reported that districts began the current fiscal year with $329.8 million of money they legally couldn't spend. That's apart from money required for debt service and other legal purposes and obligations, the association said.
“All those,” said Kevin McCarthy, president of the Arizona Tax Research Association, referring to the ballot propositions, “were intended to do the same thing, and that is to strip lawmakers of the authority that they otherwise had to try to (deal with a budget crisis), which is why we opposed all of those.”
An outstanding piece of work to guide us comes from the Arizona Tax Research Association. Led by President Kevin McCarty, ATRA's recommendations are a must-read for anyone interested in solving not only our current deficit, but also our state's structural shortfall.
The economic crisis facing Arizona is extraordinary. Arizona's unemployment is up to 7 percent, and 155,000 Arizonans lost their jobs in the past year. This economic collapse has led to a record state budget deficit.
In essence, the state was buying ongoing programs and services with one hand and trimming its ability to pay for them with the other. "It's safe to say there are fingers to be pointed all over the map in terms of why we're in this situation," said Kevin McCarthy, president of the Arizona Tax Research Association.
According to the Arizona Tax Research Association, authorized General Fund spending for this year was $10.7 billion. You will hear and read lower figures. But that's the real sum, according to ATRA, when adjustments are made for accounting gimmicks and debt.