Guest Speaker Jim Small
Jim Small, the executive director and editor of the AZCIR (AZ Center for Investigative Reporting), which was founded in 2012, spoke to the January 10, 2018 meeting of the Phoenix (morning) Community Team. Small, who was a reporter & then editor of the AZ Capitol Times, the Yellow Sheet and the AZ Legislative Report, joined the AZCIR in December 2015. Small explained that the AZCIR is a nonprofit (501C3) entity, focuses on data, in depth investigative reporting, has no regular schedule of publication (reports get published when the investigation is completed!!) and shares its data/reports for free with other media, e.g., KJZZ, the AZ Republic, the AZ Daily Star, the HuffPost and with other non profit organizations, e.g., the ACLU of AZ.. Small said that AZCIR represents a new business model for the media called ‘accountable journalism,’ and is affiliated with the National Ethnics And Excellence in Journalism organization. There are a number of similar entities around the country with some focusing only one on community/city or one topic, e.g., the environment while AZCIR covers a wide range of public policy issues all over AZ.
Small then focused on a somewhat recent report that AZCIR completed and published called “The Cost of Cuts” that was actually based on data published by the AZ Legislature’s own Joint Legislative Budget Committee (JLBC), which annually is supposed to put out a report titled “Tax Expenditure Report (for a specific year.)” Expenditures, Small explained, in this case means all the exemptions, deductions, allowances, exclusions and credits, i.e., all the funds that the state of AZ does NOT collect due to specific laws. The report focused on the FY 2016 JLBC Report showing $13.7 billion in such ‘expenditures,’ which represents 150% of the actual budget for that fiscal year or $9.8 billion, and with such ‘expenditures’ due to grow based on current laws that continue to expand such, e.g., tax credits to State Tuition Organizations (STOs) for vouchers!!!! The $9.8 amount, he said, was composed of 45% sales taxes, 45% income taxes, and 10% miscellaneous income. Of the 45% collected in income taxes, 42% came from individuals and only 3% from corporations. Because AZ has no statewide property tax, income and the budget fluctuate quite a bit from year to year. For FY 2016, Small stated, there were $12.6 billion in sales tax exemptions (NOTE: sales taxes are legally considered to be TPTs = transaction privilege taxes) of which there are 226!! AZ is a very high sales tax state with such taxes considered to be very regressive (as poorer people spend a larger portion of their income buying ‘stuff’ then wealthier people, who invest and save more....actions not taxed). Small also pointed out that sales taxes are very susceptible to special interest lobbying groups, which is why there are exemptions for items such as 4” pipe (but not larger or smaller pip), horse vitamins (but not vitamins for humans) and various kinds of small aircraft. Small also reported that House and Senate leaders are supposed to annual appoint a committee to review the status of all the ‘expenditures’ and make recommendations to the House/Senate regarding those to be ended or changed in some way. However, although the Legislature’s tax analysts collected all the data for the Committee, it did not meet as required; some thought that might be due to the fact that the last year they did meet, their recommendations re ending certain expenditures were largely ignored. However, after the publication of the AZCIR’s report, a Committee was appointed.
A lively question/answer period followed regarding how how AZ ranks regarding taxes, what data there is to support the claim that companies move to AZ because of our low taxes, how competitive AZ is on the basis of taxes vs. an educated/skilled workforce and more.
The website for the AZCIR is www.azcir.org.