Supporters of Sales Tax Increase Mislead Public with Faulty Claims

Posted on April 21, 2010 | Type: Press Release
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PHOENIX – The “Yes on 100” campaign has issued a statement attacking a recent video produced by the Goldwater Institute as part of ongoing efforts to educate the public about the need for state policymakers to fix their spending priorities.

As part of its educational mission, the Goldwater Institute offers this Fact Check as a guide for understanding the impact of the proposed sales tax increase.

Claim: The Goldwater Institute identifies only a miniscule amount of spending waste that amounts to a “rounding error” in the state budget.

Fact: State lawmakers and other policy leaders have repeatedly argued the state budget has been cut as deeply as possibly, so they have no choice but to ask for a tax increase. As recently as April 14, Senator Paula Aboud said in a message on www.paulaaboud.com that the current adopted budget has cut state agencies “to the bone.” Governor Jan Brewer recently told a group of business leaders in Mesa there are no other choices left. “The checkbook is overdrawn, we’ve maxed out the credit cards, we’ve mortgaged the house,” the governor said according to a March 29 report from the Associated Press.

But lawmakers did not eliminate $100,000 in spending for awards to racehorse breeders, a $6,097 subsidy for a museum devoted to the history of beads, or the other $2 billion in spending changes that have been suggested by the Goldwater Institute. So policymakers simply are not telling the whole story when they say they eliminated all waste in government before asking voters to raise taxes.

The 30-second video highlights nearly $10 million in wasteful spending, but was never intended to be a comprehensive list of government waste. However, in 2009 and again in 2010, the Goldwater Institute did provide a comprehensive list of spending reductions and policy changes that could be undertaken to balance the state budget before any tax increases were considered. The 2010 policy memo identified a total of more than $2 billion in likely savings for taxpayers and can be read here.

“Only politicians would think $10 million is a ‘rounding error,’ but regular Arizonans are offended by any misuse of their money,” said Darcy Olsen, President and CEO of the Goldwater Institute.

Claim: The University of Arizona has revealed serious flaws in a study commissioned by the Goldwater Institute that shows more 14,000 private jobs would be lost with a sales tax increase, and instead the university has calculated the sales tax hike would save 13,000 jobs.

Fact: In 2009, the Goldwater Institute asked the Beacon Hill Institute at Suffolk University to provide an economic model of the impact of all potential tax increases that were being considered at that time. Beacon Hill is frequently commissioned by organizations around the country to model the impact of tax proposals.

The UA study agrees with the Beacon Hill results that private jobs would be lost if the tax increase passes. UA estimates approximately 7,400 private sector jobs will be lost. But, the UA study says those private sector job losses will be balanced out with government jobs that will be saved. It’s no surprise that maintaining government spending will allow government to keep employees on the payroll.

 “We have too much excess government right now,” said Ms. Olsen. “Instead of relying on temporary revenue sources to prop up bloated government, we need to use common sense and get Arizona back to basics.”

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