House Republicans Pass Arizona’s Massive Tax-Cut, Heads To Governor For Approval
By Howard Fischer
Capitol Media Services
PHOENIX -- House Republicans pushed through the plan to sharply cut taxes on the rich Thursday and a $12.8 billion spending plan -- but only after changing the rules to limit debate and objections by Democrats.
The approval, on a party-line vote, came after the 31 Republicans -- all present for the first time in days -- lined up the votes to limit discussion to no more than 30 minutes. And the rule was crafted in a way to cut off comments at that point, even if all the amendments to any bill had not even been explained.
With the new rules in place, House Republicans enacted the plan. With the Senate already having approved, that sent it to Gov. Doug Ducey.
The legislation creates two personal tax brackets of 2.55% for earnings by married couples of anything below $54,544 a year, and 2.98% for anything above that,.
There are provisions cut both tax rates to 2.5% if certain revenue estimates are reached. And a separate 4.5% cap on all income taxes protect the most wealthy -- those earning more than $500,000 a year -- from the effects of a voter-approved 3.5% surcharge to fund public education by effectively limiting their other income taxes to just 1%.
"This budget has a tax cut for all,'' said Rep. John Kavanagh, R-Fountain Hills. And Ducey, in his own prepared statement, said that every Arizona will benefit. They will get to keep more money under this tax plan,'' he said.
But Rep. Pamela Powers Hannley, D-Tucson, said that's ignoring a crucial fact: It is structured so that the richest get more than a proportionate share of the benefits.
"The benefit to somebody at the bottom rung, somebody who makes less than $21,000 in the state of Arizona, is $3,'' she said. By contrast, the tax cut for someone at the $500,000 income level is $30,000.
And for the super-rich, Powers Hannley said, those in the $5 million range will save $300,000 each and every year going forward.
"There it is, the further death of the middle class by rewarding the ultra-wealthy,'' said Rep. Richard Andrade, D-Glendale.
But Rep. Bret Roberts, R-Maricopa, said he sees the issue -- and the structure of the tax cut -- through a different lens.
"When it comes to the middle class. tax policy, whether the minority party wants to admit it or not, reflects upon jobs and the economy in the state of Arizona,'' he said. "And tax policy is a direct reflection on how many people in the state of Arizona have jobs that want jobs.''
Rep. Charlene Fernandez, D-Yuma, derided that as "trickle-down economics.''
But Rep. Mark Finchem, R-Oro Valley, rejected claims by foes of the plan that the tax breaks amount to give-aways of state funds.
"Government has nothing to give away that it hasn't taken from somebody else,'' he said. Finchem said the proper way to see the tax cuts is that the government is simply taking less in the first place.
Unable to cut the size of the tax cut, Democrats attempted to add some of their spending priorities to the Republican-crafted budget, pointing out statements by the governor that Arizona has record revenues.
Rep. Melody Hernandez, D-Phoenix, asked for $200 million for the Arizona Financial Aid Trust, the account used to help provide scholarships for higher education. She said the failure of the state to meet its obligations means students have to take on extra debt.
GOP lawmakers rejected the proposal.
Democrats had no better luck with requests to hike teacher pay, put more state dollars into eviction prevention and add railroad safety inspectors at the Arizona Corporation Commission. Nor could they get the the GOP majority to provide state aid to Pima and Maricopa community colleges, the only two systems in the state that don't get such cash.
House Speaker Rusty Bowers, R-Mesa, acknowledged that the change in rules effectively was payback for Democrats refusing to show up for debate on Tuesday when the Republicans had finally lined up the votes among their own caucus to enact $1.3 billion -- and possibly $1.8 billion -- in permanent tax cuts and the $12.8 billion spending plan. That left the House without a quorum as four Republicans were away from the Capitol.
"It is clear, was clear then, by the absence of an entire caucus, and by actions prior and currently today, that procedural obstruction and delay have been instituted in lieu of civility,'' he said. Bowers said the time limits will still allow for discussion "but also allow us to get out in an expedited fashion.''
But Democrats said Republicans have no one but themselves to blame for the fact that legislature is now up against a deadline to enact a new spending plan for the fiscal year that begins in less than a week.
Fernandez pointed out that Republican leaders brought lawmakers to the Capitol for 26 days where there was absolutely no legislative business done while they tried to line up the votes among their own caucus. She said that's because they chose not to involve Democrats in budget negotiations or include their priorities in the plan.
There always has been a limit of three minutes on the ability of legislators to explain their votes. But there has never been an overall cap on the amount of time to discuss specific amendments.
Now, once the clock hits 30 minutes, people still can offer amendments. But there just can't be any discussion of any of those amendments or to ask questions of proponents.
But Rep. Travis Grantham, R-Gilbert, who serves as speaker pro-tem, said there is a precedent of sorts for the new rules. He pointed out the U.S. House has a process where the time for debate on each bill is established by that chamber's Rules Committee.