Tom Jenney still sees chance for tax reform this year

Tom JenneyTom Jenney, Executive Director of the Arizona Federation of Taxpayers, says that for his organization, making the repeal of the equalization property tax permanent is the "top item" and one that "can't wait until next year." Yet despite the hooplah surrounding Gov. Janet Napolitano's veto of the bill that would have kept the $250 million tax off the books in perpetuity, Jenney is less than panicked over the death of the legislation.

"We can conceivably see a situation where the Governor is trying to spend every last penny and finance projects through bonding," said Jenney, "and it's something she might have to cave on and throw in at the end of budget negotiations... at least I hope that's what happens." He added: "That might be about the best the legislature can do."

Those negotiations entered a new stage today, when a bill aimed at resolving the issues of the 2008 budget came to the floor and is currently being debated. There is optimism from both parties that an accord can be reached which the Governor will find acceptable. Should the '08 portion of the '07-'08 budget be resolved with this new bill, that still leaves the not-inconsiderable task of sorting out FY '08-'09 before the end of the session in June.

Should the Legislature go out of session with the tax repeal still scheduled to sunset at the end of the year, as it was designed to in the 2006 legislation that instituted the moratorium, Jenney still sees a way in which it can be rescued.

"If we can send that thing to the ballot," said Jenney, "I suspect it might do very well. A lot of people out there are talking about radical tax reform. This is not radical."

Jenney said he also doesn't see any income taxes boing cut "for another few years at least," but said that a key tool may be granted to the legislature this session to control spending.

HRC 2044 grants the legislature the ability to cut back on voter-mandated spending in times of recession, and Jenney has hopes of it passing this session.

"I suspect it will have to get watered down a bit," he said, adding there were "concerns" that the bill would only result in different spending as opposed to less.

"It looked like [Senate Appropriations Committee Chairman] Bob Burns would be willing to consider watering it down," said Jenney, who watched the proceedings when the bill passed out of the that committee this past Tuesday in a mixed vote. Jenney suggested the Senate may have to attach provisions that "make it so legislators couldn't simply shift spending," but also said he suspects "people on both sides of the aisle are concerned about voter mandated spending."

Wrapping up what he called the "Big Three" issues is one for which he sees a lot of potential: public-private partnerships on transportation. He mentioned that several pieces of legislation exist that would push for private companies to have more of a role in building and maintaining transportation systems in the state, "but the goal is to get one bill."

Overall, for Jenney, legislation isn't the solution, but frugality.

"What we want to do is stop the crazy overspending when the economy is roaring," he said, echoing other fiscal conservatives' lament of the rapid growth in the state budget over the last few years. "If we don't overspend during the good times, we wouldn't have to cut like mad during a recession."