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Digging the hole deeper: Too many tax cuts hurting Arizona

As the Legislature debates proposals to raise taxes and proposals to cut taxes, how many Arizonans realize state taxes have been cut over and over again during the past two decades to the point that now our the state budget loses $1.5 billion a year?

Too many tax cuts have led to shrinking services that Arizona families and business value, such as education, health, public safety and infrastructure. And they also have added to the boom-and-bust rollercoaster of our state budget. The result is tax policy and state services that are unstable and unpredictable.

Children’s Action Alliance recently looked into the tax cuts passed over the last two decades. What we found was disturbing.

Since 1989, tax cuts have been passed every year except one (2003).

Even as lawmakers have struggled unsuccessfully to close the ever- increasing deficits, more tax cuts have been proposed, passed and phased in. Tax cuts that won’t go into effect until January 2010 and beyond total $1 billion over a five-year period.

Based on the years of tax cuts, Arizona is coming up short when it comes to the public assets families and businesses need to prosper.

Arizona suffers from high class sizes in public schools, low proficiency in basic reading and math skills, and a lack of options for quality, affordable child care and preschool. We rank near the bottom of the nation in the performance of our child health system and the rate of children with health care coverage. In rankings of business climate, Arizona fares the worst in the categories of education and quality of life.

We’re already living through the additional threats to children’s health, education and security caused by budget cuts passed this year.

Now, we’re seeing how much worse the future can be as state agencies have identified how they would cut an additional 15 percent from their budgets.

We are looking at eliminating KidsCare health coverage for 45,000 children and turning thousands of parents and children away from food, shelter, health services, counseling and support that strengthen families and build our future.

Children’s Action Alliance has identified the top 10 reasons to freeze and reverse Arizona’s tax cuts. We’ve also made eight recommendations for policymakers, which include a moratorium on tax law changes, a sunset date on all tax credits and deductions, and permanent changes to our revenue system that update the tax code. For details, take a look at the report called “Digging the Hole Deeper,” available at www.azchildren.org.

Arizona can rebuild common assets and plan for the future. We need lawmakers who will step up to responsible fiscal policies. We can match Arizona’s tax policies to our expectations for outstanding education, health and safety for children, as well as the excellent infrastructure needed for a 21st century economy. Now is the time.

– Dana Wolfe Naimark is president and CEO of the Children’s Action Alliance.

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