Colorado legislators warn AZ leaders about harmful tax cut proposal

As Arizona legislators consider SCR1035, which would impose tax and spending limitations similar to those in Colorado, it’s worth looking at the consequences and taking from the lived experience of hardworking Coloradans who have a rigid state budget dreamed up by politicians over 30 years ago.

In short: This proposal would impose automatic tax cuts that would hurt Arizona’s ability to provide essential services and rise to the challenges of an uncertain future. Tax cuts today put the state at tremendous risk of major cuts to vital services like schools, medical care, parks, first responders, and infrastructure that communities depend on to thrive.

States are at their best when they are focused on the things that create a safe, healthy, prosperous life for everyone. Leaders who endorse permanent budget restrictions like those in Colorado, and now SCR 1035 in Arizona, are short-sighted. They fail to consider how these laws would hamstring their ability to meet big challenges for families and communities – like guaranteeing a good education to all our kids, building safe infrastructure like roads and clean water, and providing health care to people when they need it. Arizona should learn from Colorado and say no to SCR1035 to protect the future of the state.

Arizona legislators need not look far to see the unintended consequences of these laws that put the state in the hands of a dangerous autopilot. Colorado’s experience shows how these automatic cuts lock in recession-level spending and reward the wealthiest taxpayers at the expense of most taxpayers. After 30 years of our limit, Colorado has a backlog of unmet needs for safe roads, affordable housing, and for our growing population, and has some of the most underfunded schools in the country. Colorado also has developed a complex and warped system of fees and special taxing districts that are necessary to provide basic infrastructure services or development within our limits. These consequences are not by choice or policy of Coloradans today, but because people 30 years ago set an automatic limit in place that’s been tough to unwind.

SCR1035 looks a lot like Colorado’s limit in that respect. While our law limits taxes and spending, our experience reveals that automating your state’s fiscal policy on either side of the ledger is a recipe for harm.

Moreover, the automatic, income tax cut in SCR1035 is a sleight of hand that will benefit the wealthiest Arizonans in good times and bad but do little for hardworking families when the economy is good and could be downright harmful during an economic downturn.

More concerning, the tax cuts will make it harder, if not nearly impossible, to provide the things Arizona’s families need in good economic times and bad ones. The legislature will be self-sabotaging its own ability to make decisions on how to cover a shortfall if actual revenue comes below forecasted revenue. Other states with arbitrary revenue limits end up needlessly cutting funding for education, medical care, and public safety when these services are needed most. And when the economy improves, the state will be unable to ramp-up to meet the increasing demands of a growing Arizona and will stay stuck at recession-level spending, meaning falling ever behind and failing Arizonians.

Colorado has been down this road since 1992, taking a huge toll on the state’s ability to fund schools. Despite being one of the country’s wealthiest, fastest growing states, Colorado ranks 48th in higher education funding and dead last in starting-teacher-salary competitiveness. If Arizona follows in Colorado’s footsteps, Arizona residents can expect similar outcomes.

Colorado’s experience should serve as a cautionary tale for Arizona legislators. Colorado hopes Arizona leaders reject SCR1035 and other outdated ideas like it and focus on the things that create the thriving and prosperous communities that we all want to live in.

Don Marostica is a former Colorado State legislator (R-Loveland) in northern Colorado, member of the Colorado Joint Budget Committee and former director of the Colorado Office of Economic Development and International Trade.

Bradley J. Young is a former Colorado State legislator (R-Lamar) in southern Colorado, former chairman of the Joint Budget Committee, former Prowers County Republican Chair, and author of TABOR and Direct Democracy.

The Arizona Center for Economic Progress (the AZCenter) at Children’s Action Alliance is a leader in advancing policies that create fairer tax codes that raise the revenue needed to invest in education, affordable housing, health care, infrastructure and other supports needed to build thriving communities and better economic opportunities for all Arizonans.