Why Arizona will be out of cash (again) by 2025

Arizonans accept the role our state government plays in providing services essential to the functions of everyday life. For our people and businesses to thrive, government must maintain infrastructure, educate its workforce and ensure that the resources of the state are used wisely.

Over the last three decades, Arizona's Republican legislators and governors have systematically decreased state revenues. In 28 of the last 29 years, the Legislature has cut taxes worth more than $5 billion in annual revenue, when adjusted for inflation and population growth.

The tax cuts included in this year's state budget are the continuation of that legacy and will leave us facing a fiscal disaster in five years.

While the economy shrank a decade ago and revenues with it, Republicans passed tax cuts for corporations even though there was no demand for those cuts. Even now, our colleagues hold sacred the debunked theory of trickledown economics.

Our economy has gradually rebounded and our population has increased in the years since, but our state revenues have not. The result:

❚ We are driving on roads in disrepair. ❚ Our children are learning in overcrowded classrooms.

❚ Our underpaid teachers continue to flee the profession.

❚ The working poor live without adequate health care or access to affordable housing.

Arizona needs to fund the basic government services that our citizens and businesses use every day.

When urged to restore services that were cut during the recession, our Republican colleagues, with no sense of irony, proclaim, "We don't have the money."

That's true when the Legislature doesn't have the political will to increase revenue. In Arizona, it's easy to cut state revenues but nearly impossible to get them back.

In 2017, the passage of the Trump tax cuts required the Legislature to conform Arizona's income tax code to the federal changes. Simple conformity would have resulted in an additional $274 million that could have gone toward fixing our neglected roads and meeting the millions of dollars of capital needs our schools and universities have accrued after years of underfunding.

Despite the governor’s initial resistance, Republicans used conformity as another excuse to forgo state revenue via tax cuts. They claimed the cuts were to offset the increase in revenue from conformity, but the cuts are in excess of $300 million – far more than needed to "offset" the increase.

You would have thought every taxpayer in the state would be marching on the Capitol with pitchforks and torches had we adopted simple conformity. However, by the time the cuts were passed, most Arizonans had already paid their 2018 taxes under default simple conformity with nary a peep.

Compounding the issue is the fact that the federal individual income tax provisions expire in 2025, while the state's "offset" cuts stay in place. This means the money Republicans are allegedly "offsetting" to pay for their cut will disappear, leaving a significant hole in state revenue.

Coupled with the end of Proposition 123's public education funding that same year, it means a fiscal cliff that will further complicate Arizona school financing and support.

With passage of this year's budget, Gov. Doug Ducey and Republican legislators set the clock on a fiscal time bomb that won't go off until he's long gone from the Ninth Floor. But it will blow a hole in state revenue half the size of his billion-dollar "rainy day fund."

The Legislature’s primary responsibility is to adequately fund the essential services that Arizonans have shown they support. Millions of people and thousands of businesses are counting on us. Maybe next year ... probably not.