Fixing the State Budget
We are right-sizing government to the size we can afford. This includes preparing for when the temporary sales tax ends in three years. I announced my roadmap in March 2009 to fix the fiscal mess I inherited six weeks earlier and have been successfully executing that plan. I have a proven track record of confronting the budget deficit head-on and will continue to do so. While many were surprised with the aggressiveness of my FY11 budget, we will have many more innovative budget proposals in my next budget. I have said many times that passage of Proposition 100, while necessary, is not a cure-all. Many more hard decisions will have to be made, while still protecting our State's priorities. I was the only state leader to produce a budget proposal for the fiscal year that started on July 1. I challenged all other state leaders, including my opponent Attorney General Goddard, and statewide candidates to put forward their comprehensive plans and none have done so far. Eliminating unspecified or minor "tax loopholes or exemptions," "cutting waste, fraud and abuse," and "making across-the-board cuts" are slogans, not plans.
The three major components of my plan for dealing with the budget deficit are:
- Increasing job creation/economic growth.
- Streamlining state government.
- Instituting permanent, long-term budget reforms.
Future Tax Increases. I don't believe that the overall state tax burden should be increased going forward. Under my Administration, we have cut general fund expenditures by more than double the anticipated revenues from Proposition 100. And we are not done yet with streamlining state government.
Future Tax Cuts. Tax cuts should be focused on attracting high-quality, high-paying jobs to Arizona. That means we need to reform our tax structure in those areas where we are not competitive with our neighboring states and those states we compete against repeatedly for new business (e.g., Texas).
I support providing tax cuts targeted at businesses that create jobs in the short-term and larger across-the-board tax cuts in the longer term to stimulate our economy.
We need to reform our tax structure in those areas where we are not competitive with our neighboring states and those states we compete against repeatedly for new business.
- Corporate income tax. I have called for a phased-in reduction in our corporate income tax rate, where Arizona is higher than our neighboring states.
- Tax on capital investment. Another area of reform is our business property tax, which discourages high-paying manufacturing jobs because we overtax capital investment.
- Tax on web-based industries. We need to modernize our tax code so that we don't discriminate against the newly emerging on-line or web-based industries.
One of the first tasks of the newly-formed Arizona Commerce Authority will be to do an analysis of our competitive environment and make recommendations to make Arizona more business-friendly.
