SENATOR PAMELA GORMAN RESPONDS....

Yesterday, an e-mail reply was sent to all LD-6 PC's, here is Sen. Gorman's Statement:

In a surreal turn of events, I have been invited to respond to a "hit piece" my own Republican district leadership has used the internal email list to help circulate misinformation to my fellow Precinct Committeemen. This email was designed to get PC's to call and lobby me to vote for a tax increase. In this alternate reality where voting "yes" on a property tax repeal is reported to be voting "no" and stopping a tax increase is reported to be voting against an entire budget, I hardly know where to start to explain...

First, I think a little background is important to understand. For those who were not aware, the "budget" is really a series of bills that move through the system (usually, but not necessarily, together one after the other). The main bill contains the numbers for funding levels and is referred to as the "feed” bill internally. The balance of the budget bills are filled with policy instructions on how the money in the feed bill is to be spent and reforms to be carried out to create savings. Internally, we refer to these companion bills as "BRB's" (pronounced Burbs- stands for Budget Reconciliation Bills).

The tax referral demanded by the governor was always in a
separate bill that was not a regular BRB or the feed bill. It's connection to the actual budget is one of Governor Brewer's invention, but there is no logical connection because the revenue which the tax increase will produce is not affecting the Fiscal Year 2010 budget for planning purposes. It is a stand-alone bill, with only a connection in terms of the psychology of Brewers continued commitment to a tax increase.

One of those budget bills (SB1025) I caused to be amended in a "sit cow" (this means the bill was run through Committee of the Whole an additional time to further amend it). This amendment put the $250 million property tax repeal directly into the budget "BRB" bill, in order to save it from the certain death it faced if left combined with a tax increase bill. I voted FOR this bill and have voted for ALL of the budget bills in every budget all session...

Those that tell you otherwise are trying to invent reality
by playing with words. I did, however, cast a NO vote for the tax increase bill. I make no excuses for voting against a tax increase and to be honest, I don't think I should have to.

You have also possibly heard of the late-entry new idea the tax increase crowd came up with designed to encourage conservatives to become complicit in the sales tax increase's passage. What you haven't heard is the "rest of the story" and, I presume, why Sam Crump, Andy Biggs, Ron Gould, and I all refused to support this trade off. Trust me, it was no "deal" that anyone should take. Unfortunately, several otherwise smart folks have failed to see this from all angles and jumped on board early in a very public way and now that the details are surfacing, their names and logos are being used to suggest they support a tax increase bait and switch scheme of sorts. Here's the basic outline...

In return for getting out of the way of a sales tax increase by throwing our vote onto the referral bill (which we all feel has a very strong chance of passing) there was a DELAYED cut to corporate and personal income taxes offered (the lion's share in terms of percentage being corporate tax cuts).

Here's one BIG problem with this: The delayed cuts would not be scheduled to kick in until 2011. And, until those revenue changes begin to affect the general fund, ALL of our legal advisors have unanimously advised the legislature that these cuts will not be protected by Prop 108 (Prop 108 requires a 2/3 vote for a tax increase to be passed). This means that in a few months we will have a perfect storm of events that will almost certainly crush any hopes we have that those cuts would ever go into effect and begin to “pay back” the billions of dollars the sales tax increase will take from Arizona families. Here is a sketch of what I mean: We will have this same governor (who insists we need more revenue and less cuts to spending), the same legislators (who could not muster the courage to make necessary cuts in a non-election year), at least a $2 billion revenue shortfall, no more federal bailout money coming in, and the looming "potential" of reduced revenue to the tune of $400 million from these "future" cuts. The drop in revenue from the cuts will be seen as a problem that needs to be rectified by repealing them or delaying them with a simply majority vote before they go into effect. No one really doubts that there will be a huge effort to delay or outright repeal those cuts before they ever see the light of day. So, essentially, this is a Popeye cartoon situation where you are told "Give me a burger today and I will pay you on Tuesday." In a word, the cuts are but a fantasy. And, it takes only 12 Democrats (all of whom are against the cuts enacting) and 4 Republicans (I can name 5 of them who would vote to delay or repeal them) to do away with the sweetened part of the pot and leave only the tax increase standing. Some of the folks buying into the “fantasy” do it because they are not well versed in our process, others don’t understand the political dynamics of the personalities currently in public office. Those of us who do are not being fooled. There are others out there (possibly including the authors of the cowardly anonymous YouTube video) who understand this full and well and it is actually part of their overall plan to get more revenue through a tax hike now, knowing they will never lose future revenues to the tax cuts because they will never come to fruition.

Additionally, there is the very real economic issue to contend with in regard to the tax increase itself. When you want to turn an economy around, you try to stimulate it by giving folks money to go out and
spend in the community. By pulling a billion dollars in spending capacity out of the hands of Arizonans, you will be doing the OPPOSITE of stimulating the economy.

You will, in effect, slow it down and prolong the recession and at the same time cripple Arizona families who are desperately just trying to hang on in this economy. They estimate the average family will pay the government an extra $400 if this sales tax passes. Think about it. How many groceries can you buy for $400? Car payment? School fees and books? What will those families choose to live without once they are sending that money to the state instead of infusing the same dollars into our economy? Tax increases are bad. Tax increases during a recession are irresponsible. A tax increase to cover over-spending is un-Republican.

Incidentally, the polling supports this sales tax passing even BEFORE the multi-million dollars in special interest money come pouring in to support a slick ad campaign to make sure it passes. Remember Prop 400? Same crew running this show, but this time they will have even more support from Teacher's Unions, Firefighter's Unions, Hospital Associations, etc. To those that find solace in saying "I will vote to push it forward, but will vote against it at the polls," I think a reality check is in order. It will be like David and Goliath. Heck, look at the professionally produced hit ad they did on me already just to get my ONE vote!

You also have heard a lot about the $250 million property tax permanent repeal.

This is an effort, which I have always supported. It is doing away with the only property tax on your tax bill that comes to the state. We tried to repeal it when times were good, but could only get it suspended under Napolitano. As such, it will come back online next year without action by the legislature and the governor to make it permanent. I have now voted in support of this 3 times. It was my stubborn persistence that got it put into this BRB on the day we voted the budget out of the Senate last Wednesday. It was vetoed twice before (once by Napolitano and once by Brewer) but is now part of the budget bill SB1025 on its way to the governor again. I am hopeful she will hear from all of you and choose to sign it into law, once and for all. While it only represents on average $67 for homeowners, every little bit helps. For business, it is a much larger hit should this tax come back automatically.

Now that you have the background, let me state some basic facts.




1. The proposal is a likely sales tax hike in exchange for"slim chance" tax cuts - but it is still a net tax increase for nearly everyone in our district at least in the next few years.I can’t support hitting the citizens of our district with a tax
increase - both because that is what I promised you andbecause too many Arizonans can't afford it in this recession, which will only be longer and harsher if the sales tax is increased.

2. As much as I believe in cutting corporate taxes to someday entice business to move to our state once the global recession has passed and businesses begin expanding again, the price here – an immediate tax increase on taxpayers- is too much to ask in exchange for a shot-in-the-dark chance at getting those future tax cuts.

3. I believe the tax hike will pass. And, due to the current political situation at the capitol and the economic situation in the state, the tax cuts will never see the light of day.

4. A majority of members, when faced with cutting spending or getting rid of tax cuts would choose ditching the tax cuts to retain that revenue for continued over-spending. Even today, many would rather choose higher taxes over
making the cuts necessary to balance the budget.

4. I have voted FOR the property tax repeal 3 times but the governor vetoed it, presumably holding it hostage in order to extort support for higher taxes. I am not willing to trade a tax hike, that if passes would cost the average family $400 a year, in exchange for a property tax break of $67 (on average) per family. So, I hope Governor Brewer will sign the bill and cease holding that issue in jeopardy as part of a tax hike plan.

5. I have been a consistent and vocal supporter of real tax cuts
for Arizona and no one has stood more firmly in opposition to higher taxes.

6. I did vote FOR the Republican budget, which included the $250 million property tax repeal. I voted AGAINST a $1 billion tax increase.

7. I am very disappointed that paid political operatives have been
allowed to hijack the LD6 email list to encourage you to lobby me
armed with half-truths and, in some cases, patently false information. I not only
welcome, but encourage you to get the facts about the tax plan and remember
that the majority of the LD6 delegation is on record opposing it.

8. Good well-meaning people with very similar ideas will still sometimes disagree. Everyone has their reasons and professional/personal priorities when determining how they will vote. There has been an enormous amount of pressure applied from all sides on this. While I wish my colleagues would use the power of their vote to prevent this harmful tax increase from going to the ballot at their hand, I do not judge.

Sincerely,

Senator Pamela Gorman (R)

Legislative District 6