I applauded Sen. Jay Tibshraeny when he voted against the FY08 budget earlier this year because he cited a lack of fiscal discipline and because he believed the budget would lead to future deficits. He turned out to be right, of course, as Arizona faces a potential $2 billion budget shortfall.

However, being good on spending doesn’t excuse him for proposing bad tax policy. According the Capitol Times, Sen. Tibshraeny is again going to offer his bill to exempt senior citizens from paying a vehicle license tax on one of their vehicles. The bill failed in 2006 and 2007. For good reason.

No matter how politically popular it might be to exempt one class of citizens from a tax (especially a hated tax like the VLT), it’s just bad public policy. If seniors should be exempt from the VLT, why not income taxes, or property taxes, or sales taxes? Why shouldn’t teachers, or firemen, or people who carpool be exempt? If a 65 year-old is exempt, why not the 64 year-old. The reasons are pretty clear.

An ideal tax system taxes the broadest possible base at the lowest possible rate. Just as eliminating all exemptions, credits and loopholes would lead to lower taxes for everyone, creating new exemptions, credits and loopholes will lead to higher taxes for everyone.

I’m sure Sen. Tibshraeny believes he’s actually cutting taxes for a segment of the population, but really he’s just creating a new program for seniors that the rest of us will have to fund.

He’s too eager to raise taxes.

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While trying to show that Democrats are more focused on wild goose chases rather than serious policy business, a White House spokesman said the following:

“There are a number of dry holes that got drilled,” a senior administration official said. “People don’t care about it. The public is saying: Gas is at $3 a gallon. Is there any energy bill? No.”

He’s right about the the average person not caring too much about the Dems’ effort to find some dirt on the President. I’m sure partisan Democrats do, but most folks don’t care much. He’s less right, however, about the energy bill. He’s way off, actually. Outside of lobbyists, I’d be willing to bet a tank of gas that no more than 10% of America actually knows there’s an pending energy bill. And I’d bet a Ford Excursion-sized tank of gas that nobody’s relying on an energy bill passing to lower gas prices. Good thing, too, because it won’t.

So, cities aren’t immune from the slowdown in the economy. The city of Phoenix says they will have to cut $40 million from their budget this fiscal year, and $30 million next year, due to a fall in sales tax revenue. Phoenix’s general fund budget is $2 billion, so it’s quite possible that the 2% budget cut won’t cause a ripple. What’s missing from the picture, however, is that over the past four years, the amount of money the state gives to all cities has increased 83% to $684 million. City budgets will survive just fine.

What if you got a letter from the state asking for a donation to help balance the state’s budget? Would you give? As crazy as that sounds, some lawmakers think you should, and worse, they don’t even want to give you the option.

According to the East Valley Tribune, one prominent lawmaker wants to raise property taxes:

Assistant Senate Minority Leader Jorge Garcia has his sights set particularly on an early end to the three-year suspension of a state property tax, a move that would bring in nearly $200 million. “The reality is, I would love to do it,” he said.

There are numerous problems with Senator Garcia’s line of thinking. First, raising property taxes at the same time that property taxes are already going up at the local level will only exacerbate Arizona’s housing and economic problems. Second, shouldn’t Senator Garcia propose at least some modest budget cuts before he asks his constituents to pay higher taxes? It takes a brave man to tell his Tucson constituents that after voting to build the Yuma Welcome Center with public money, he’d like to raise their taxes to get out of a financial mess.

Until Senator Garcia and other lawmakers cut all the fat out of the budget, all they’re really saying is that Arizona families must tighten their belts so the state doesn’t have to.

Published by the Goldwater Institute as a Today’s News on 11/19/07