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Because We Can Fund Things With Less Money

The governor’s corporate giveaway, oh, I’m sorry “job creation program” was COWed last night, and goes to third read today.

Okay, for those of you that are not well versed: COW is “Committee of the Whole,” basically a meeting of the entire Senate or House, and third read is a final vote in the whole House or Senate.

Don’t you feel like an insider now? Don’t be so proud of yourself.

This bill was first presented to lawmakers on Monday, with barely any time to peruse the 214 page document. Even Republican members claimed not to know what was in the bill.

The bill includes a cut in corporate tax rates from 6.49% to 4.9%. There is no requirement that the beneficiaries of these cuts be headquartered in Arizona and no guarantee that the money saved will be invested in Arizona. You may remember last session that Steve Farley and Tom Chabin fought off an attempt to do something similar under the guise of “job creation.” That time, Kirk Adams was claiming that the tax cut was going to pay itself, which their own “dynamic scoring” model didn’t bear out. This time, I haven’t heard much supply-side alchemy invoked, and even the governor’s staff is admitting that this current bill might not do much for job creation.

Also, remember that that bill came up at a time when la Cervecera was about to propose her sales tax hike to pay for schools. They pulled that when they realized how bad it looked to be cutting corporate taxes while asking for regular folks to pay higher taxes. By the way, even with that sales tax increase, we are already looking at further cuts in education and health care, you know, the ones that weren’t supposed to happen if we passed the new sales tax. Guess what will be cut further if this thing passes?

The bill also includes a provision to cut commercial, industrial and agricultural property taxes, made up for by increasing residential property taxes. There is a rebate in the law, but if you don’t file the proper paperwork, you won’t be eligible for it. Given that I have the feeling that future budgets will likely count on folks not filing for their rebate, and that most homeowners can’t afford a lobbyist, look for that to stay as complicated as it is in this bill.

The bill also creates an unaccountable bureaucracy called the Arizona Commerce Authority. I didn’t say it was unaccountable, the bill’s language does: the bill states that this new body is “The authority is exempt from state general accounting and finance practices.” Gee. This quango (I’ve never gotten to use that word before) will be funded partly through lottery revenue (Farley has already the phrase “gambling with your tax dollars.”) This will allow the state, theoretically anyway, to give money to private companies and claim that it’s not the state, thus avoiding the constitution’s “gift clause.” Is Tlatoani Adams still saying the state isn’t in the business of picking winners and losers?

Anyhow, this bill will bring all sorts of business to the state, right? I’m sure there will be companies lining up to do business somewhere where the schools are being shuttered, parks are closed and the highways are in disrepair as long as the taxes are low.

5 Comments

  1. Mark Smith wrote:

    Arizona Commerce Authority? It appears to already be in existence: http://www.azcommerce.com/Home

    “On June 29, 2010, Governor Jan Brewer issued an Executive Order establishing the Arizona Commerce Authority. As the Arizona Department of Commerce transitions into the NEW QUASI-PUBLIC STATE AUTHORITY, it will be more competitive in attracting corporations looking for a better operating environment and a better place to collaborate and grow.”

    Do you think this is just a vehicle to dish out the same kind of giveaways that the municipalities and counties have been fond of in recent years? (e.g. stadiums, large shopping centers, etc.)

    Wednesday, February 16, 2011 at 12:44 pm | Permalink
  2. Vic Dupa wrote:

    “I’m sure there will be companies lining up to do business somewhere where the schools are being shuttered, parks are closed and the highways are in disrepair as long as the taxes are low”
    Yes, there are – call centers and prisons. We’ll be teaching phone skills and take-down procedures in our high schools … I mean trade schools.

    Thursday, February 17, 2011 at 8:45 am | Permalink
  3. Whocares wrote:

    I don’t understand you guys at all. Many of your arguments seem to be sound to me and I could easily agree with many of them.

    But then you go and make the argument that the bill creates an unaccountable bureaucracy! What the hell, I thought Democrats loved a good unaccountable bureaucracy.

    This is one of the very same arguments many people used against Obamacare, but we didn’t hear you complaining about unaccountable bureaucracies then. What gives?

    I guess it just matters who created the unaccountable bureaucracy who will control it that matters to you all.

    You also stated that no one had time to read it… what the hell, “But we have to pass the bill so that you can find out what is in it, away from the fog of controversy.” Sound familiar?

    I guess it just matters who knows what is in the bill, and who is in control to you all.

    Business sure as hell aren’t going to come here if the schools are all wonderful, the parks all open and green, and we have pristine super highways and high speed rail either if they are taxed out the wazoo for it, are they? That model doesn’t work in New York or California does it?

    We should probably concentrate on cutting the items that are not mandated in the budget and the reduction of entitlements (both literal and implied). What would the budget be without the illegal’s in our prisons, hospitals, or schools?

    Thursday, February 17, 2011 at 1:34 pm | Permalink
  4. Pamela wrote:

    At least this time, Adams is admitting that they don’t have a clue if this half-a-billion-dollar corporate welfare package will create one job. But, what the heck, let’s give it a try. :(

    Thursday, February 17, 2011 at 2:35 pm | Permalink
  5. Whocares wrote:

    “At least this time, Adams is admitting that they don’t have a clue if this half-a-billion-dollar corporate welfare package will create one job. But, what the heck, let’s give it a try. ” Pamela
    February 17th, 2011 at 2:35 pm

    Well, my brother works at Intel AT4-11 in Chandler. They announced today in a MUM (Monthly Update Meeting) that the would be building a new plant in Chandler and will probably follow up with three additional assembly plant buildings. According to his supervisor, the recent signing of this bill was the tipping point for Intel. They had planned to build the three additional assembly plants in Portland.

    Friday, February 18, 2011 at 2:34 pm | Permalink