A Modest Response to Americans for Tax Reform

Friends,

Earlier today, Americans for Tax Reform sent an e-mail to Arizona legislators highly critical of Governor Brewer's budget plan. While I think Grover Norquist and his team are incredibly smart people whom I consider friends, their e-mail warranted a response:

I understand your perspective on Arizona not having a shortfall but an overspending problem.  I agree.  It has been that way since Governor Napolitano essentially took control of the budget process after the 2006 election.  With a weak republican legislature, she had her way.  Now with the worst recession since 1982, we are in dire straits.  As I said at the meeting yesterday, If we had Tabor in place during the entire decade, we would still have overspent by $200 million in 2008, $1.5 billion in 2009, $2 billion in 2010 and $2 billion in 2011 and so on.  It would slowly start to decline and later this decade (2015+) it would be back to balanced.  My point is this is no longer just government overspending, this is a real structural deficit and tax revenues are in free fall.

 Do the governor and legislature need to continue to  cut spending?  Absolutely, and they will.  This governor has already cut more than any governor before her. Besides pay cuts for teachers and state employees, 1,300 employees have been laid off and 15,000 have taken furloughs, and more to come.

 There have been suggestions that the state sell buildings. In case you have not noticed, now is not the best time to be selling real estate, especially in Arizona.  OK, that will generate a billion dollars, it would help, but it will also cost $80 to $90 million a year to lease back the buildings, which adds to the structural deficit (if the building were sold in an up market, the annual cost would be $30 million a year less).

 The Goldwater institute has some good ideas on additional cuts and they need to be included where possible. They don’t have a plan for balancing the budget. They also have some ideas which represent their libertarian agenda and are not politically mainstream.

 Finally, I do appreciate your position and respect what ATR is trying to do – reduce the size of government.  Government will be greatly downsized in Arizona and rolled back literally five years to at least the 2006 level.  I wish we could do more if possible, but we do run up against the reality of elections.  If we want to continue to govern, we need to remain the majority party. While I am not in a position quite yet to be able to evaluate that risk, I will be in the near future. This is as much art as it is science and a balancing act. I will trust my instincts as they have been more right than wrong.  

 In the past 50 days, we have seen truly what it means to be the party in the minority.  My goal is not to replicate this in Arizona in 2010.

 Your hard hitting attack with claims such as taxes never go away, and this will be the straw that breaks the camel’s back are inflammatory and will not change the outcome of this debate in Arizona.  If it ends up being a tax increase then Arizona taxpayers and tax credit receivers will have to give Arizona about 20% of their tax rebate from Obama. A real back breaker. If you are right, then the Ds will win in November because we will have destroyed Arizona’s economy and voters will throw us out and replace us with Ds and we will have more liberals gone wild in Arizona.  I will retire and get to do a lot more fishing. You will be able to say I told you so. If you are wrong, we will have a stronger republican party, smaller government and a mandate to continue reforming government in Arizona. I will retire and get to do a lot more fishing.  You will have learned a valuable lesson that will serve you well the rest of your professional life. I hope you will appreciate the gift.

Randy Pullen

 

Here is the original e-mail to Arizona legislators:

Dear Legislator,

 

I am writing to strongly urge that you oppose Governor Jan Brewer’s plans for a $1 billion in annual tax increases on Arizona taxpayers.

 

One of the few things economists of all political stripes can agree on is that the last thing you want to do in a recession is raise taxes. Raising taxes in the current economic downturn will hurt Arizona families and encourage businesses to relocate across state lines, taking jobs with them.

 

According to the Center for Fiscal Accountability, Arizona taxpayers already spend 194 days – more than half the year – working just to pay for the cost of government. Furthermore, many Arizonans are already wondering how to cope if President Barack Obama’s budget – which contains over $1 trillion in tax hikes over the next 10 years – is passed into law.  In this environment, Gov. Brewer’s proposed tax hikes will serve as the proverbial straw that breaks the state’s economic back. Irrespective of the form in which it passes, it will have an adverse and deleterious impact on the Arizona economy and taxpayers.

 

I urge you not to be fooled by claims this tax hike would be “temporary”. History has proven that ‘temporary’ tax hikes are about as prevalent in nature as unicorns.  Point of fact, Arizonans that have land line phones are still paying the “temporary” tax hike put in place to fund the Spanish-American War of 1898.

 

Do not forget – Arizona does not have a budget shortfall – it has an overspending problem. According to the Goldwater Institute, the state’s general fund spending has grown at double the rate of population and inflation over the last five years – 66 percent compared to 33 percent. For the Arizona economy to recover and prosper, the size of government must be reigned in.

 

Families all over the Grand Canyon State are cutting back, making tough decisions, and prioritizing in order to live within reduced means.  The state must do likewise.

 

Some elected officials view taxpayers, rather than tenured bureaucrats, union bosses and other spending interests, as their constituents. Americans for Tax Reform commends those elected officials who work for Arizona taxpayers rather than against them.  Feel free to call on me or ATR’s state government affairs manager, Patrick Gleason (pgleason@atr.org) with any questions or concerns.

 

 

Onward,

 

Grover G. Norquist