Sickest and Poorest Will Balance AZ Budget

Posted: January 28, 2011 in AZ, Class Warfare, Gov. Jan Brewer, Healthcare, The Economy

Have you ever tried to create a budget for yourself? Ever try to do it by only looking at your debt and not considering your income? No, of course not because that makes no sense. A budget by definition looks at what is coming in and what is going out. Who would be so dumb as to only consider the money going out? Gov. Jan Brewer would, that’s who.

I read an article today that states The Arizona Hospital and Healthcare Association is proposing to assess a $300 million bed tax in order to offset the loss of Medicaid payments that will result from Gov. Brewer’s proposed budget cuts. You know, the ones where she is trying to cut Medicaid funding for over 280,000 people? In that article, a state House Rep. and ally of Gov. Brewer, John Kavanagh said, “It’s too little, too late.” Rep. Kavanagh is essentially saying that the medical community of Arizona had an obligation to provide a solution to the state to alleviate the state’s budget deficit.

The medical community says the loss of funding will have a dramatic impact on the medical industry costing it $1.6 billion overall and $500 million specifically for hospitals. Not to mention the impact it will have on the lives of the patients, many of whom will go untreated, will worsen and die. In fact, two individuals who were refused state assistance at the end of 2010 have already died. Another 96 people, who need life saving treatment, are in the same boat and their lives are in jeopardy.

The logic of Rep. Kavanagh’s response is astounding. The Governor and Republican led House and Senate looked at the state budget for cuts only. They looked at what they could cut and get away with. And this is what they found….they could cut the healthcare of the poor–some of the most vulnerable citizens in the state. And then they have the nerve to not only expect the private medical sector to provide an answer to the budgetary problem but then they reject the well-intentioned offer from the state’s medical industry to at least partially compensate for the loss.

Gov. Brewer and other state Republicans, didn’t bother to look at wasteful spending such as the Centennial Museum project, which is already projected to cost a total of $15 million (and that price is climbing because of overruns when no building has taken place and with no expectation that it would be ready for state’s centennial celebration in the first place).

State Republicans didn’t bother to look at increasing revenues through increased taxation because that goes against their ideology. In fact, they are seeking to actually cut taxes further. Arizona already rates as the 6th most business-friendly state in the country in regards to state property taxes. According to the Tax Foundation, “The state/local tax burden ranking in Arizona has dropped 24 places from 17th highest in 1977 to 41st in 2008, and the residents there now pay the tenth-lowest tax burden.”

First, the state completely exempts social security retirement benefits from state income taxes. According to data from 2005, retirees receiving social security are 15.9% of the state. Just taxing a little bit of that income would be helpful to balancing the budget or at least providing some coverage for the very sickest Medicaid recipients. But the old folks lobby is powerful and the lobby for the poor and sickly is not, so that’s not going to happen.

Second, the personal income tax could be made more progressive, meaning that as we approach the top end of the wage scale, rates could be adjusted. As of 2010, the highest rate in the state was 4.54% on anyone making $150,000 year or more (source: Tax Foundation). This is low compared to other states, and in some cases, only half of what the top income brackets pay in other states.

Extra revenue could be garnered by implementing a split tax rate. For example, a person making over $150,000 could pay the standard 4.5% on the first $150,000 and then 5.5% on income exceeding that threshold. In, fact The Arizona Hospital and Healthcare Association had already proposed this change back in March of last year. Unfortunately no one in the Governors office liked the idea (remember, they’ve got an ideology block on raising taxes) and the State Democrats couldn’t touch it either (it’s hard enough getting elected as a Democrat in this state). So the Association tried to get it on ballot as a voter initiative. Evidently the signatures were not submitted to the state in time and the Medicaid Initiative was NOT on the ballot for the 2010 mid-term election. I don’t know why they failed to submit on time but I’m guessing it was a lack of signatures.

Third, for every $1.00 we send to Washington, AZ actually gets $1.19 back. In other words, we are getting more benefits than we pay for. Anything that reduces the amount of Federal dollars coming back to Arizona, including fund matching is a loss of income for the state (Tax foundation again).

Doubling down on the stupid (which she does a lot), Gov. Brewer wants to cut the budget on both ends and it’s going to destroy the state.  Too bad she’s doing it on the back of the sickest and poorest in Arizona and no one but individuals like myself give a damn.

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