Wine Bar Senator Serves Up Tax-Cut Kool-Aid

I'm posting a day late because I just got back this morning from talking politics and public service last night to students at Pomona College as a guest of the Pomona Student Union. Prof. David Menefee-Libey and I did an undergraduate political version of “Inside the Actor’s Studio” but the informal title among certain undergraduates (translation: my son and his buddies) was “The Beard and The Moustache Talk Politics”: http://www.politics.pomona.edu/dml/. I only hope the students enjoyed it half as much as I did.

For the column, my suggested headline is above but the editor gave me more room, and top-of-the-page placement, too. Now that I don’t have Dick Mahoney to kick around anymore, it’s time for a new target. Newspaper version is available here. Insider comments show that I’m not the only person finding Sen. Cheuvront’s act less amusing these days.

TAX-CUT VOTE SHOWS DEM IS DRINKING GOP KOOL-AID
East Valley Tribune, Apr. 13, 2008

Whenever I see state Sen. Ken Cheuvront, D-Phoenix, he insistently asks me why I don’t dine at his wine bar more often. Now I have a good reason.

What’s the GOP’s favorite cure for anything, whether recession or boom, war or peace, heartburn or halitosis? Why, tax cuts, of course. Cut taxes when government revenues go up. Cut taxes when government revenues go down. Cut taxes to keep the economy going strong. Cut taxes if the economy’s weak. The question is irrelevant; the answer is always tax cuts!

This year, with the state facing a $1.2 billion deficit for the current fiscal year (ending in a scant 11 weeks) and a $1.8 billion deficit for the fiscal year starting July 1, what’s the GOP’s top state legislative priority? Making permanent a temporary $250 million annual property tax break.

It’s a perfect GOP tax cut, for several reasons. First, dropping the state equalization property tax benefits big landowners, particularly utilities. Don’t want to risk putting money in the hands of ordinary consumers who might help spend us out of the recession. Second, it’s a distraction from the current fiscal crisis. Why bother with such dreary, eat-your-spinach work as the pending budget, when you can eat a huge tax-cut dessert instead?

Third, it’s a tax cut for future years. Today’s legislators take the credit, leaving future legislators and governors to find additional school funding. (The equalization tax is dedicated to education, and 3-year hiatus required that schools get the lost revenues from the now-stressed General Fund.)

Finally, it’s breaking a promise. The temporary cut was passed during the real estate boom, when state revenues exceeded projections and the General Fund could carry the extra load. The temporary nature was a feature, if future fiscal years got leaner and general fund revenues went south -- which has happened. And with Arizona’s two-thirds requirement for tax increases (but no similar supermajority requirement for tax cuts), it’s mathematically and politically far harder to raise taxes than to cut them.

But rather than let the temporary pause end, the GOP now says we need to make permanent what they promised (and voted for) would be temporary -- or it’s a tax hike, and Republicans can’t do that on a day ending in “Y.”

It’s all part of the Republican mythology, that cutting taxes increases revenues (no, it doesn’t), or that state tax rates are the sole determinant of a state’s attraction to businesses (no, forget about things like quality of life, wage rates, infrastructure, school quality, labor quality, proximity to markets -- a study shows that where the CEO owns a house matters more), or that state tax decisions determine how the state economy does (no, how can anyone paying attention to the real estate boom-and-bust think that anything the state Legislature does matters as much as how the national economy is performing?)

So that’s the GOP orthodoxy, impervious to reality (and if you doubt that, where are all the economic studies -- not sound bites, actual studies -- showing that cutting taxes works as promised?) But while Republicans have to believe this stuff, we Democrats don’t; we’re supposed to be reality-based.

Except Cheuvront, who decided to give the Republicans the final vote they needed for their eat-more-chocolate-to-lose-weight fiscal folly. Some say he was upset that House Democrats defeated his bid to eliminate a municipal tax break used to spur downtown development, which makes no sense. He claimed that small businesses needed this tax break, which doesn’t make sense, and that business valuations for tax purposes were somehow exceeding market valuations, which would be illegal -- and which also makes no sense.

He also left Sens. Tom O’Halleran, R-Sedona, and Carolyn Allen, R-Scottsdale, who bucked their party to vote against permanency, hung out to dry when he switched his vote after promising the Senate Democratic caucus the day before he would vote “no.” And that doesn’t make sense, either.

So as for patronizing Cheuvront’s Wine Bar? Now that the proprietor is serving up the same old GOP tax-cut Kool-Aid, I think I’ll pass.