AZ Legislature caps off 171-day session with tax cuts for rich

1st Jul 2021

The Arizona Legislature ended the 2021 regular legislative session today, 171 days after it began, tied for the third-longest legislative session on record in Arizona.

That’s 171 days of introducing and reviewing bills, multiple committee hearings, frequent debate and civic deliberation, ample public hearings and constituent input, reconciliation and most importantly compromise – all with Arizona’s best interest in mind.

OK, I probably gave away the snark with the word “compromise.” There wasn’t a whole lot of compromise or really any of the aforementioned happening this past session. In fact, there was almost none. The rushed budget, enacted just eight hours before the start of the new fiscal year on July 1, has globs of unrelated public policy that should have been addressed during the 171-day session – and in many cases were killed but found new life in the final days of cut-throat horse-trading.

Why have a prolonged legislative session at all if the end result is built on last-minute pretense and perpetual partisanship excluding citizen input?

In addition to passing voter-suppression laws, the Arizona Legislature on party lines passed a nearly $13 billion budget that includes a 2.5% flat tax that overwhelmingly favors the wealthiest Arizonans. With only a single-vote majority in both chambers (Republicans have a 31-29 majority in the House and a 16-14 majority in the Senate), the Arizona Legislature shoved through partisan-rich laws – emphasis on both “partisan” and “rich.”

Remember: It only takes a simple majority to cut taxes, but a three-quarters majority to increase revenues, virtually guaranteeing no tax increases ever for Arizona despite new or existing needs.

And while Republican Governor Doug Ducey keeps repeating “each and every Arizona taxpayer, no matter their income, will experience a tax cut under our historic tax reform,” the proof is not the percentage but in the actual dollar amounts.

As the Arizona Center for Economic Progress notes: Those with a household income below $40,000 (about 40 percent of Arizonans) will receive an average tax benefit between $3 and $13 – a single trip to the value menu at a fast-food joint.

The top earners (the one-percenters making above $512,000) will receive a tax benefit of $30,047. That slice of the supreme pizza accounts for the 55.48% share of the tax benefits for those living comfortably lush lifestyles, often at the expense and the result of those workers earning much, much less.

Meanwhile, the next wealthy sector (the four-percenters earning $224,000 to $512,000) will receive a tax benefit of $2,701 (for 20.34% share of state tax benefits). That’s a substantial amount, compared to just $3 to $13 for the bottom 40% of Arizona households.

So, when you tally it all up, more than three-quarters (75.82%) of the flat-tax benefits will benefit the top five-percenters (AKA “the rich).” Where is the equity? Where is the fairness? Most importantly, where is the long-term vision?

To see where you fall on the flat-tax benefits according to household income, click here.

This is easily the largest tax cut in history, reducing Arizona’s revenue stream by $2 billion annually. That means less money for our chronically underfunded schools, roads and infrastructure, affordable housing, medical care and facilities, social services, etc. In other words, less money for families and children, fewer dollars for investing in our state’s collective future.

Such a monumental and fundamental shift in tax policy should have been put on the ballot for the voters to decide. But we all know how that vote would have gone, had voters seen the numbers and true beneficiaries of the flat tax.

Governor Ducey likes to boast of a budget surplus, but only because Arizona was among a handful of states that used billions in federal money intended for Covid relief to backfill budget deficits in state agencies, instead of monies going directly to individuals, businesses and families, as intended by Congress.

It’s a gimmick, a facade propped up by politics, not pragmatism. The fact is, the federal dollars for Covid relief aren’t always going to be there. This was a one-time windfall for the Arizona budget, and rather than invest in our future, we simply gave it to the rich.

The flat-tax budget package also hog ties Proposition 208, which voters approved last year to better fund education by taxing the wealthiest Arizonans at a higher rate. The GOP-controlled Legislature flat out ignored the wishes of the voters in favor of rewarding the rich just for being rich, I guess. Reneging on promised, court-ordered and now voter-mandated education dollars is nothing new to Arizona, as anyone who has lived in this state for a while can attest.

There likely will be court challenges to the Legislature for its underhanded overreach, and there also may be a 2022 citizens’ initiative to prohibit the flat tax from ever taking effect. Success of such efforts to thwart the most damaging tax package in state history is anything but certain but coalitions are being formed to fight this injustice. CPLC Action Fund, an earlier proponent of Prop 208, will be among those coalitions and may enlist your help, as necessary.

The Legislature may empty the public galleries, thwart public input, close sessions, restrict debate, prohibit compromise and ignore voter wishes – all of which happened this session – but in the end the people will always find a way to have the last word.


Joseph Garcia

Executive Director

CPLC Action Fund


Note: Joseph Garcia serves on a voluntary basis as a member of the executive board of Arizona Children’s Action Alliance, which includes oversight of the Arizona Center for Economic Progress. Both nonprofits serve as advocates for working families, children and underserved communities.


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