Participants in the annual Governing Arizona forum determined last week that the state needs a balanced and stable tax system, but provided few specifics on how that would be accomplished.
The half-day session was chaired by Secretary of State Ken Bennett, a Republican, and Pete Rios, a Democrat who serves on the Pinal County Board of Supervisors. Both men are former state Senate presidents.
The group consensus was that reducing the fiscal 2010 revenue shortfall of $1.5 billion and fiscal 2011’s projected $3 billion gap required a blend of spending cuts and revenue increases.
A study of state spending over the past 30 years, commissioned by the Thomas R. Brown Foundations and the Communications Institute, said sales and income taxes provide most of Arizona’s revenue because of the elimination of the state property tax.
Sales tax collections accounted for 47% of revenue in 1980 but the tax now provides 56% of total state general fund tax collections. The portion provided by the income tax was 34% in 1980 and is currently 37%.
State aid to local school districts has been stable over the period, the study found, but higher education has seen its share of state aid fall by 8%.
Spending on Arizona prisons is up 5% since 1980, and health and welfare expenditures are up 10%.