Horizon, Host: Ted Simons

April 7, 2009

Host: Ted Simons

Democratic Budget

  • Democrats in the state House of Representatives have released a budget proposal. House Minority Leader Kyrsten Sinema discusses the plan and how it differs from the Republican proposal.
  • Krysten Sinema - State House Minority Leader

View Transcript
Ted Simons:
State legislative Democrats have tossed their budget for next year into the ring. The budget would use all the federal stimulus money available. Democrats say it would also shut some corporate tax loopholes, implement targeted cuts across state government and restore funding to education. I'll talk to a democratic lawmaker about their budget, but first, here's more on the plan.

Mike Sauceda:
The Democrats budget uses a variety of techniques to balance a $2.4 billion deficit. Would be used to fill a big portion of that gap, not all of it because the democrat's budget includes spending. Other ways they will fix it, a $75 million rollover for universities. Shifting money to the next fiscal year budget. From June of 2010, would be spread throughout the following years. $250 million from ending a property tax cut for businesses. And for private school tuitions and public school donations for extracurricular activities. Fund balance sweeps and transfers would add another $100 million to balance the budget. Lump sum cuts $40 million. And a tax to warranty and service contracts sold in Arizona, bringing in another $21 million. And a tax on nonrenewable energy. And Democrats would like to take back $1.6 million given to Maricopa County Joe Arpaio. And over $600 million in spending, restoring cuts made during the -- childcare subsidies get nearly $20 million and AHCCCS $39 million.

Ted Simons:
Here to talk about the budget is democratic state representative Kyrsten Sinema. Good to see you again on the program. Thanks for joining us.

Kyrsten Sinema:
Good to be here.

Ted Simons:
How did the democratic proposal compare and contrast with what the Republicans suggested?

Kyrsten Sinema:
First, the democratic proposal is a comprehensive proposal that closes the budget deficit. The Republican proposal leaked to the present still leaves about $700 million unresolved. That's one of the key issues. Another key difference is that the democratic budget uses three real major tactics to solve this budget problem. One, we make cuts where we can, so strategic and smart cuts to get rid of government waste and get rid of empty loopholes and corporate giveaways. And two, utilize federal stimulus dollars to the fullest extent. And three, we offer some reasonable revenue options to help fill the balance of the shortfall and we think that's a comprehensive and fair way to solve the problem.

Ted Simons:
There's also an increase on income tax. How much of an increase and who gets hit?

Kyrsten Sinema:
It's actually a reversion to a tax that's been in existence for many years in Arizona. Up to 2006, Arizonans paid a small income tax, about 5.04%. And in 2006, that was rolled back to 4.5%. This simply reverts back to where we were in 2005, for those families who earn over $250,000 per household.

Ted Simons:
Ok. You got the equalization rate. State property tax rate sticking in there.

Kyrsten Sinema:

Ted Simons:
The speaker of the house says this is a job killing tax. Is he wrong about that?

Kyrsten Sinema:
He's welcome to his opinion but the evidence is clear that this tax is a very small tax. For individuals who are private property owners like yourself and myself. It's about $39 a year for the average family. And the folks who really win from having this tax go away are major corporations. And we feel that's not fair because this tax pays dollar for dollar for full-day kindergarten in Arizona. And we know Arizonans would rather have full-day kindergarten then that $39 in their pocket.

Ted Simons:
With the increased revenue by way of increase in the income tax, reverting back, getting the state property tax back as well and suspending credits and such, does that suggest that all of these things are not going to slow down the economy? Because a lot of economists say when you burden business and you burden households with that extra tax, things slow down and it's the last thing we need now.

Kyrsten Sinema:
I'm glad you brought that up. Just on Friday, a team of economists assembled by the board of -- assembled by the board of regents, released a report, a fact report and one of the first findings they make is that cutting state programs and laying off state workers is more damaging to our economy than is a small adjustment in our overall income property and sales tax revenue. It hurts the economy more to make deep cuts than these small revenue adjustments.

Ted Simons:
Are you talking with the governor about this? And if so, do you know where she stands.

Kyrsten Sinema:
We are talking with the governor and grateful for that. Also talking with our colleagues, the Republicans in the house.

Ted Simons:
Are things more open than in the past?

Kyrsten Sinema:
The meetings aren't open. We're hoping for openness and transparency but happy to be involved in discussions. Our meetings with the governor's office, she also believes we need to combine cuts with stimulus dollars and revenue enhancements. She's proposed a one cent temporary sales tax for three years in Arizona. We think that's more expensive. It would cost about $360 a year. Ours, $78 a year for the average family. So we feel we're on the same point in the big areas and now we just need to talk and work out the details how we want to get to the revenue amounts.

Ted Simons:
We have to stop it there.

Kyrsten Sinema:
Thank you.

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