The Arizona Republic’s Political Insider blog cites Americans for Tax Reform’s Taxpayer Protection Pledge as a stumbling block to closing a budget deal. While it’s true that ATR considers a tax hike referral to the voters the same as a vote to raise taxes, and therefore a violation of the pledge, if the referral is part of a deal that results in a net tax cut it does not violate the pledge.
Of course that’s not ATR’s only stipulation. They strongly recommend writing the ballot language so that the tax cuts are not contingent on the passage of the sales tax hike. Additionally, they’d like safeguards against any extension of the “temporary” tax, or repeal of the permanent tax cuts. These points are key. To read Grover Norquist’s letter to lawmakers, click here.
The proposed budget deal includes $400 million in personal and corporate income tax cuts, as well as the permanent repeal of the state equalization rate (a $250 million a year property tax scheduled to come back this year) and a state spending cap for three years. We support this deal. The reforms and tax cuts outweigh the potential sales tax increase, which will be left for the voters to decide.
We still believe that raising taxes in this economy is not the answer. However, the state needs a budget that both the legislature and governor support. Let’s take the deal, and let the voters tell us what they think of the tax hike.