Revenue Scaring

Posted on May 04, 2006 | Author: Steve Voeller
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Arizona Free Enterprise Club responds to Mayor Gordon

Dear Mayor Gordon:

            Your comments in the Arizona Republic (May 2) about the effect of the proposed income tax cut on Phoenix's distribution of Urban Revenue Sharing (URS) are misleading.

            As you know, jurisdictions like Phoenix will share $425 million from state income tax revenue collected this fiscal year.  This amount will increase every year to $684 million by fiscal year 2009, according to the Joint Legislative Budget Committee.  If the state legislature reduces income tax rates by five percent next year, revenues to cities and towns will still increase 54 percent over this period to $654 million.  A 54 percent increase in revenue can hardly be described as "catastrophic."

            The idea that Phoenix will be left out of recent years of surging revenues does not square with the facts.  With or without a reduction in income tax rates, cities and towns are sharing a 14 percent increase this year, a 30 percent increase next year, and a 16 percent increase in 2008.   

            Finally, reducing the budgets of police and fire should always be a last resort.  Even in cash-strapped New Orleans following Hurricane Katrina, Mayor Ray Nagin eliminated 3,000 non-essential jobs, saving New Orleans $8 million a month, but the city did not eliminate any police officers, fire fighters, or emergency medical technicians.  Phoenix certainly is not facing the same circumstances New Orleans faced.

            Just a little over a year ago you spoke to the Arizona Republic concerning a potential budget shortfall, and said:  "I will not support the reduction of police and fire personnel. My first priority to this city is public safety."  This type of leadership is what Phoenix taxpayers expect. 

            The income tax relief package is a win-win proposal for everyone, Arizona taxpayers and their cities alike.

                                                            Sincerely,
                                                            Steve Voeller
                                                            President, Arizona Free Enterprise Club


Key Links:

-Arizona Free Enterprise Club
- Arizona Republic: "Arizona's cities fight plan to cut state taxes"
-Joint Legislative Budget Committee

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