Tuesday, January 29, 2019

Dems back Ducey on fed tax conformity, oppose irresponsible tax cut while AZ education and infrastructure needs unmet

PHOENIX — Democratic members of the House Ways & Means Committee today backed Governor Ducey's efforts to fully conform with federal tax cuts, and opposed a Republican-sponsored bill to pass yet another irresponsible tax cut.

All four Democrats in the Ways & Means Committee opposed House Bill 2522, which passed along party lines. Rather than simply conforming with federal tax changes, the bill would further reduce state revenue at a time when public schools remain among the worst funded in the country and falling apart, along with our roads, bridges and other infrastructure that fuels commerce across the state.

Ranking Member Representative Mitzi Epstein introduced an amendment during today's committee meeting that would call for full conformity to the federal taxes, and no individual income tax bracket changes. It was defeated along party lines.

Comments from Democratic committee members:
Mitzi Epstein, Ranking Member, D-Tempe
"My amendment would bring us back to simple conformity. It’s fiscally responsible and helps working Arizonans. We should conform, and the sooner we conform to federal tax laws, the better for all tax payers. Our wonderful CPAs will breathe a deep sigh of relief and our taxpayers will be happy because they can just go ahead and file. I know they are jumping the gun out there – they want to get their taxes in. My amendment will allow them to simply get their taxes in and taxes done. Then further changes or tax rates and so on can be part of the budget negotiation, and Arizonans will have time to speak up and be heard.”  
Pamela Powers Hannley, D-Tucson
“I have lived in Arizona for 37 years and I 've seen this movie before. Many times, in the past, when we have had extra funds, the Arizona Legislature has cut taxes-- rather than investing in schools or roads or saving the funds for a rainy day. I believe that we should do full tax conformity and discuss how to invest these funds to the benefit of all Arizonans and not just give tax cuts to the wealthy.”
Andres Cano, D-Tucson
“Regrettably, Arizona’s legislature is continuing down the same road: more tax cuts for Arizona’s millionaires and billionaires. I agree with Governor Ducey: we should fully conform to the federal tax code with no stipulations, as we’ve done every year. This legislation ultimately harms our ability to fund our schools, healthcare, and crumbling infrastructure. We must demand better so that all Arizonans pay their fair share.”
Lorenzo Sierra, D-Avondale
“I am of the belief that Arizonans know how best to invest their money. That said, I join the hard-working people of Legislative District 19 and the people of Arizona in asking the Legislature to invest in the things that matter most to us: education, healthcare and infrastructure. I join my caucus and the Governor in supporting straight tax conformity.”

Additional background:
  • According to the Grand Canyon Institute, “Conformity with federal tax changes under the Tax Cuts and Jobs Act (TCJA), enacted in December 2017, would enable the state to increase state revenues by approximately $200 million annually, about a two-percent increase.”
  • Also, full conformity will “improve revenues by about $200 million and the cost will almost completely be borne by individuals who gained the most from TJCA reforms, those with household incomes in the top one percent of the state’s income brackets. Most Arizonans will be able to enjoy the benefits of the added revenue infusion and bear little of the cost.”
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