Funding for education and roads in Arizona is always under threat, and now Republicans in Congress have made revenue problems even worse for states like Arizona by passing the federal budget bill, HR1. Congress gave big unfair tax cuts to big corporations and individuals making millions per year while adding $4.5 trillion to the national debt. At the state level it is also wreaking havoc: a big loss of state revenue. Because Arizona’s state income tax starts with the federal adjusted gross income, this federal welfare for the wealthy flowed through to our state’s general fund, hurting our state’s bottom line.   

Every year the AZ Legislature must make a choice to conform to Congressional tax changes or not, and we almost always do! But this year, it would cause the loss of hundreds of millions of dollars. The AZ Legislature is likely not to agree to add all those tax cuts for billionaires to our income tax code this year, just as past Legislatures have chosen to do on some of these exact same corporate tax cuts — due to their high cost and unfair treatment of non-corporate taxpayers.

In November, Gov. Katie Hobbs issued an executive order for the Arizona Department of Revenue to publish tax forms with the Arizona standard deduction to be increased to match the federal deduction. It will give a small tax cut to 90% of Arizona taxpayers who do not itemize their deductions. The forms are published, and tax filing season is underway.  

Current law (ARS 43-107) protects taxpayers from penalties or interest who rely on and file the tax forms as written, even if the Legislature changes tax law due to this conformity issue. Do not fall for the Republican false narrative of tax filing chaos. This is just an excuse to justify their desire to enshrine the federal corporate tax cuts into state law. 

If the state Legislature added all the tax carve-outs from HR1 into our state tax code, we would have to make $438 million in cuts to vital things like education and roads to balance the budget. Nonetheless, Republicans in the Legislature have tried not once, but twice to pass a tax-cut bill this year without planning how to pay for it.  

After accounting for all of the spending needs the state is required to fund, Arizona has a deficit in the ballpark of $1 billion, on a total budget of $18 billion.  We do not have spare change to provide more welfare for the wealthy. Arizona Democrats side with the taxpayers of Arizona, not corporate interests and their failed theory that more tax cuts will “trickle down” to everyone else.  

This essay is not tax advice in any form. It is an explanation to dispel any worries that state Republicans may have caused while crying, “wolf!” when there is no wolf in the tax forms. Republicans in Congress caused the tax problems with giveaways to Wall Street, and Gov. Hobbs took action to help the working people of Main Street.  

Mitzi Epstein is the Senate representative of Arizona’s 12th Legislative District.