Tax Cuts and the Arizona Economy

Sept. 13, 2016

Transcript:

TED SIMONS: COMING UP NEXT
ON "ARIZONA HORIZON..."
WE'LL HEAR AN ARGUMENT THAT TAX
CUTS ARE NOT DELIVERING THE
ECONOMIC BENEFITS AS PROMISED BY ARIZONA POLITICIANS...AND WE'LL LOOK AT THE IMPACT OF
FACEBOOK ON THE PRESIDENTIAL
RACE. THOSE STORIES NEXT ON "ARIZONA HORIZON."
"ARIZONA HORIZON" IS MADE POSSIBLE BY CONTRIBUTIONS FROM THE FRIENDS OF ARIZONA PBS, MEMBERS OF YOUR PBS STATION.
THANK YOU.

TED SIMONS: GOOD EVENING
AND WELCOME TO ARIZONA
HORIZON. I'M TED SIMONS.
THE ARIZONA SUPREME COURT TODAY
RULED THAT PUBLIC EMPLOYEES CAN
BE PAID FOR DOING UNION BUSINESS
DURING WORK HOURS.
THE HIGH COURT RULED IN A 3 TO 2
DECISION THAT A DEAL BETWEEN
PHOENIX AND THE CITY'S POLICE
UNION BENEFITS ALL CONCERNED AND
IS NOT AN UNCONSTITUTIONAL GIFT
OF PUBLIC FUNDS.
THE GOLDWATER INSTITUTE HAD
FILED SUIT ARGUING THAT
NEGOTIATED RELEASE TIME FOR
UNION OFFICERS WAS INDEED AN
ILLEGAL GIFT.
AFTER TODAY'S DECISION, THE
INSTITUTE RELEASED A STATEMENT
SAYING,"TODAY THE COURT MISSED
AN ENORMOUS OPPORTUNITY TO
VINDICATE ONE OF THE GREATEST
PRINCIPLES IN THE ARIZONA
CONSTITUTION THAT THE
GOVERNMENT SHOULD NOT SPEND
PUBLIC MONEY FOR PURELY PRIVATE
PURPOSES."
TODAY's DECISION COULD MEAN
SIMILAR AGREEMENTS WITH UNIONS
IN OTHER ARIZONA CITIES.
AND A HEARING HAS BEEN SET
AT THE REQUEST OF FEDERAL
PROSECUTORS LOOKING TO BRING
CRIMINAL CONTEMPT OF COURT CASE
AGAINST MARICOPA COUNTY SHERIFF
JOE ARPAIO.
THAT COURT DATE IS OCTOBER
11TH.
THE U.S. JUSTICE DEPARTMENT IS
CONSIDERING A CASE AGAINST
ARPAIO FOR IGNORING A COURT
ORDER IN A RACIAL PROFILING
CASE.
IF THE CRIMINAL CASE AGAINST
ARPAIO DOES NOT MOVE FORWARD
ANOTHER JUDGE, WHO IS NOW
OVERSEEING THE CONTEMPT CASE
CAN APPOINT AN ATTORNEY TO PUSH
FOR CHARGES.
SUPPLY SIDE ECONOMICS HAVE
DOMINATED ARIZONA'S TAX POLICY
FOR THE PAST FEW DECADES.
THE LEGISLATURE AND GOVERNOR
DOUG DUCEY CONTINUE TO CUT
TAXES, SOMETHING THEY SAY WILL
BOOST STATE REVENUES AND THE
OVERALL ECONOMY.
JON TALTON, ECONOMIC COLUMNIST FOR THE SEATTLE TIMES AND FORMER ARIZONA REPUBLIC COLUMNIST WHO TALKS ABOUT PHOENIX ISSUES AS THE ROAD COLUMNIST ONLINE IS HERE TO
ARGUE THAT THE TAX CUTTING
STRATEGY IS NOT WORKING.
WELCOME TO "ARIZONA HORIZON."
GOOD TO HAVE YOU BACK.

JON TALTON: TED I'M GLAD TO BE HERE AGAIN.

TED SIMONS: GOOD TO SEE YOU. ALRIGHT. LET'S THROW THE QUESTION OUT THERE... HAVE TAX CUTS BEEN GOOD FOR ARIZONA'S ECONOMY?

JON TALTON: NO. THERE IS ABSOLUTELY NO EVIDENCE THAT TAX CUTS HAVE INCREASED GROWTH FASTER THAN HIGHER TAX STATES, THAT THEY HAVE CREATED MORE JOBS, THAT THEY HAVE IMPROVED INCOME. NO EVIDENCE AT ALL.

TED SIMONS: ALRIGHT WE'LL PUT THAT TO THE SIDE.
ANOTHER QUESTION: HAVE TAX CUTS BEEN GOOD FOR ARIZONA OVERALL?

JON TALTON: I WOULD ARGUE NO BECAUSE WE HAVE SO MANY UNFILLED OBLIGATIONS, WHETHER IT'S HIGHWAYS OR SCHOOL FUNDING OR TRANSPORTATION SUCH AS COMMUTER TRAINS, AND ALL OF THESE THINGS.
NOW, ONE CAN MAKE A MORAL ARGUMENT OR A PHILOSOPHICAL ARGUMENT THAT GOVERNMENT SHOULD BE SMALL AND TAXES SHOULD BE FEW AND MOST MONEY SHOULD BE KEPT IN THE HANDS OF INDIVIDUALS, AND THEY CAN MAKE THAT MORAL AND PHILOSOPHICAL ARGUMENT, BUT THEY CAN'T GO AHEAD AND SAY, AND IT WILL IMPROVE THE ECONOMY. BECAUSE YOU'RE NOT ENTITLED TO YOUR OWN FACTS AS PAT MOYNAHAN SAID.

TED SIMONS: PROPONENTS SAY TOP TAX INCOME TAX RATE CUTS, ESPECIALLY THE TOP SIDE, SPURS STATE GROWTH.
THAT'S WHAT THEY SAY.
YOU SAY?

JON TALTON: THEY'RE SIMPLY NO EVIDENCE OF THAT.
IF YOU LOOK AT MASSACHUSETTS, WHICH IS ABOUT THE SAME POPULATION AS WE ARE, IF YOU CAN BELIEVE THAT, IF AN OLD ARIZONAN LIKE ME CAN BELIEVE THAT, TAX ACHUSSETTS HAS MUCH BETTER JOBS, MUCH BETTER COMPANIES, MUCH MORE TAX REVENUE, AND YET THEY HAVE MUCH HIGHER TAXES.

TED SIMONS: BUT THEY HAVE MUCH MORE HISTORY, TOO, DON'T THEY? CAN YOU COMPARE MASSACHUSETTS WE'LL TALK ABOUT KANSAS AND COLORADO AND WASHINGTON AS WELL BUT STICKING TO MASSACHUSETTS, CAN YOU COMPARE REVENUE AND OTHER ASPECTS OF LIFE BETWEEN AN OLD, OLD AREA LIKE MASSACHUSETTS AND A VERY YOUNG AREA LIKE ARIZONA?

JON TALTON: WELL, THAT'S OUR MYTH.
PHOENIX IS ACTUALLY ONE OF THE OLDEST CITIES IN NORTH AMERICA BECAUSE WE'RE BUILT ATOP WHAT WAS THE MOST ADVANCED HYDROLOGICAL CIVILIZATION IN THE PRE COLOMBIA AMERICAS, AND SO WHAT IS OLD AND WHAT IS YOUNG?
HERE'S THE MOST SALIENT POINT.
WE HAVE TO COMPARE BECAUSE WE'RE COMPETING AGAINST STATES LIKE THAT AS WELL AS COLORADO AND UTAH AND WASHINGTON AND OREGON FOR TWO THINGS THAT CAN GO ANYWHERE... TALENT AND CAPITAL.
SO WE HAVE TO PAY ATTENTION TO THAT. AND AS PHOENIX, 13th LARGEST METRO AREA, SIXTH LARGEST CITY, SOON TO BE FIFTH, WE'RE COMPETING AGAINST THOSE CITIES.
WE'RE NOT COMPETING AGAINST FRESNO OR EL PASO.

TED SIMONS: THE IDEA AGAIN COMPARING WASHINGTON AND MASSACHUSETTS, HOUSEHOLD INCOME, QUALITY OF LIFE, ALL THESE SORTS OF THINGS, CAN YOU COMPARE THOSE DISPARATE AREAS? I WANT TO GET TO KANSAS IN A SECOND, TOO. A LOT OF PEOPLE BRING UP KANSAS. I BROUGHT UP KANSAS DURING DEBATES AND SAY LOOK WHAT IS HAPPENING THERE, DO WE WANT IT TO HAPPEN HERE?
THE RESPONSE IS ALWAYS, WE'RE NOT KANSAS. WE'RE NOT MASSACHUSETTS, COLORADO, OR WASHINGTON EITHER. ARE WE APPLES TO APPLES HERE?

JON TALTON: WELL, YES.
IF WE'RE TALKING ABOUT ECONOMICS.
AGAIN, IF WE'RE TALKING ABOUT A MORAL ISSUE, OR A PHILOSOPHICAL ISSUE, AND, BY GOSH, WE'RE GOING TO BE RUGGED INDIVIDUALIST ARIZONA, EVEN THOUGH WE'VE NEEDED THE FEDERAL GOVERNMENT EVERY STEP OF THE WAY TO GET WHAT WE GOT, THAT'S ONE THING.
BUT IF YOU'RE GOING TO MAKE ECONOMIC COMPARISONS, THEN YOU HAVE TO COMPARE YOURSELF AGAINST YOUR PEER METRO AREAS, AND YOU HAVE TO COMPARE YOURSELF AGAINST STATES OF SIMILAR POPULATION SIZE.

TED SIMONS: WERE WE MORE IN LINE WITH THESE PEER STATES BEFORE THE TAX CUT IDEOLOGY?
I THINK WE CAN AGREE MAYBE AFTER THE '80s, EARLY '90s KIND OF TOOK HOLD OF THE LEGISLATURE AND ARIZONA POLITICS, WERE WE MORE IN LINE PREVIOUS TO THAT IDEOLOGY?

JON TALTON: ACTUALLY WE WERE.
STARTING IN THE LATE '40s AND EARLY '50s, PHOENIX STEWARDS WENT OUT AND RECRUITED COLD WAR INDUSTRIES, LOTS OF FEDERAL FUNDING. WE HAD MOTOROLA AND AIRESEARCH AND ON AND ON. THEY WERE ACTUALLY MORE CONSEQUENTIAL AS A PROPORTION OF THE ECONOMY THAN WHAT WE HAVE NOW IN TECHNOLOGY. AND SO STARTING IN AROUND THE LATE '70s, EARLY '80s, ARIZONA'S PER CAPITA INCOME AND HOUSEHOLD INCOME WAS STARTING TO NOT ONLY MATCH THE NATIONAL AVERAGE BUT RISE ABOVE THE NATIONAL AVERAGE.
NOW, SINCE THE LATE '80s AND EARLY '90s, ARIZONA'S INCOME HAS FALLEN BACK AND DOES NOT EVEN MATCH THE NATIONAL AVERAGE.

TED SIMONS: PROPONENTS WILL SAY, YES, BUT LOOK AT THE COST OF LIVING HERE COMPARED TO OTHER AREAS.

JON TALTON: WELL YOU CAN SLICE AND DICE THAT OUT, AND THINGS HERE COST THE SAME AS OTHER AREAS IN PURCHASING POWER PARITY THAT STILL HAVE BETTER INCOMES AND HAVE MORE DIVERSE ECONOMIES.
I MEAN, IF ONE JUST WANTS TO GO YELL AT THE OCEAN AND SAY THAT REALITY IS NOT REALITY AND KING KANUT IS GOING TO CUT TAXES AND EVERYTHING WILL BE GRAND BUT THE REALITY IS THAT ARIZONA'S ECONOMY IS NOT COMPETITIVE. IT IS NOT WHERE IT NEEDS TO BE FOR A STATE SO POPULACE. A POPULACE STATE HAS LARGE CARRYING COSTS.
IF WE WERE JUST A MILLION PEOPLE, I WOULD BE REALLY HAPPY, AND THEN WE COULD HAVE A LOT LESS GOVERNMENT.
BUT WE'RE NOT. AND SO WE'RE COMPETING IN THE BIG LEAGUES, WHETHER WE WANT TO OR NOT.

TED SIMONS: SO, FROM HOW YOU SEE IT, IF TAX RATES RAISE A BIT, INCOME TAX, BUSINESS, WHATEVER YOU THOUGHT WOULD MAKE THE BEST SENSE, IF THINGS WOULD SLOWLY GO THIS WAY INSTEAD OF THAT WAY, WOULD IT NECESSARILY IMPROVE THE STATE'S ECONOMY, OR ARE WE AS WE WILL ALWAYS BE SUNSHINE AND RETIREES AND THE WHOLE AND GOLF.

JON TALTON: NO, BECAUSE WE USED NOT TO BE. WE USED TO HAVE A VERY VIBRANT AND DIVERSIFIED ECONOMY HERE.
AND WE HAVE AT DIFFERENT TIMES, ESPECIALLY IN PHOENIX'S HISTORY, ARIZONA IS A BIT MORE COMPLEX, WE USED TO BE COPPER MINES FOR THE STATE. SO TAXES ALONE WON'T DO IT, BUT ADEQUATE REVENUE TO OUR NEEDS WOULD ALLOW US TO MAKE THE INVESTMENTS FOR QUALITY, INVESTMENTS IN EDUCATION, K 12, INVESTMENTS IN PRE K EDUCATION. WE HAVE ALL THESE UNDERFUNDED SCHOOL DISTRICTS. AND THEN INVESTMENTS IN UNIVERSITIES.
YOU KNOW, OUR UNIVERSITIES CONTINUE ON, AND I LOVE THEM, BUT THEY HAVE FACED DECADES OF BUDGET CUTS, USUALLY THAT HAVE NEVER BEEN RESTORED, AND THEY'VE HAD TO FIND A WORKAROUND TO THAT. AND THEY'RE COMPETING AGAINST UNIVERSITIES THAT ARE MUCH BETTER FUNDED. AND THEN HAVE AN ECONOMIC DEVELOPMENT POLICY THAT GOES OUT AND ATTRACTS COMPANIES, GET YOUR STATE PARKS IN ORDER, HAVE A BETTER TRANSPORTATION SYSTEM, DON'T COUNT SO MUCH ON SPRAWL AND REAL ESTATE, THEN YOU'RE TALKING.
IT'S NOT JUST TAX RATES.

TED SIMONS: AND YET FOLKS ARE STILL MOVING HERE, APPARENTLY THE THE TAX CUTS NOT NECESSARILY A REPELLENT.
HOW DO YOU ARGUE FOR FOLKS TO SAY, TALTON IS TALKING, TALKING, BUT THEY'RE STILL MOVING, MOVING.

JON TALTON: THAT'S NOT A GOOD THING. THOSE ARE ADDED COSTS.

TED SIMONS: BUT THEY ARE BEING ATTRACTED, ARE THEY NOT, BY WHAT EVER THEY SEE OR DO THEY NOT KNOW ENOUGH OF WHAT'S GOING ON.

JON TALTON: IS THAT A GOOD THING?

TED SIMONS: I'M ASKING YOU.

JON TALTON: I'M SAYING IT'S NOT A GOOD THING.
I'M SAYING POPULATION GROWTH ALONE IS A SLOPPY METRIC FOR MUCH OF ANYTHING.
THERE'S SOMETHING CALLED SAY'S LAW, FOR YOU ECONOMIC GEEKS, AND BASICALLY IT SAYS THE MORE YOU INCREASE SUPPLY THE MORE YOU'LL INCREASE DEMAND, AND SO WE CAN BUILD A LOT OF TRACT HOUSES AND A LOT OF PEOPLE WILL COME HERE AND WORK IN LOW INCOME CALL CENTER JOBS, AND AS LONG AS WE'RE LUCKY, WE'LL HAVE A FEW ASSETS LIKE THE AIRPORT, BUT WE'RE NOT GOING TO BE COMPETITIVE TO WHERE WE SHOULD BE TO WHERE OUR CHILDREN AND OUR GRANDCHILDREN WILL HAVE AN ECONOMIC FUTURE HERE, MUCH LESS THAT WE CAN CONFRONT AND EVEN PROSPER IN A TIME OF CLIMATE CHANGE.

TED SIMONS: SO, FROM THE '90s ON, THIS IDEOLOGY HAS STUCK, THE POLITICIANS WHO ARE PROPONENTS HAVE BEEN ELECTED AND REELECTED AND IT'S BECOMING EVEN MORE OF A RED STATE IF YOU WILL, A TAX CUT STATE, THAN IT WAS IN THE PAST. WHY? WHAT'S GOING ON?

JON TALTON: WELL, I THINK THE REPUBLICAN PARTY HAS BEEN MUCH MORE ADEPT AND WELL FUNDED AT GETTING ITS AGENDA ACROSS. REMEMBER, THIS IS A REPUBLICAN PARTY VERY DIFFERENT THAN IT USED TO BE.
YOU KNOW, BARRY GOLDWATER WAS IN FAVOR OF EVERY BOND ISSUE THAT THE CITY OF PHOENIX EVER PUT FORWARD.PAUL FANNIN, BUSINESSMAN, GOVERNOR, DID ALL SORTS OF THINGS TO IMPROVE EDUCATION IN THE STATE AND THAT SORT OF THING.
TODAY'S REPUBLICAN PARTY IS LIKE THE AFLAC DUCK, TAX CUTS, TAX CUTS, TAX CUTS.
AND WE JUST KEEP KICKING THE CAN DOWN THE ROAD AND WE SAY, WELL, GOSH, EVERYTHING MUST BE FINE BECAUSE PEOPLE WANT TO MOVE HERE. BUT EVERY DAY, EVERY YEAR WE'RE PAYING THE PIPER, WE'RE PAYING THE PIPER WHEN CHILDREN ARE LEFT BEHIND IN SCHOOL DISTRICTS THAT ARE NOT FUNDED RIGHT. WHEN YOU HAVE A RURAL INTERSTATE HIGHWAY GOING BETWEEN TWO MAJOR CITIES. WHEN WE DON'T HAVE COMMUTER RAIL. WHAT WAS THE ONE THING PEOPLE IN BUCKEYE WANTED A FEW YEARS AGO WHEN THEY DID A SURVEY?
THEY WANTED COMMUTER RAIL TO PHOENIX. AND WE CAN'T DO THAT BECAUSE THE LEGISLATURE'S IDEOLOGY. THAT'S IT.
THAT'S THE ONLY REASON.
IT'S JUST THEIR IDEOLOGY.
DEMOCRATS MEANWHILE, IS THERE A DEMOCRATIC PARTY HERE STILL?

TED SIMONS: TECHNICALLY THERE IS. WE HAVE TROUBLE SOMETIMES EVEN GETTING DEMOCRATIC LAWMAKERS ON THE AIR WHO MAKE HAD A DIFFERENCE AT THE CAPITOL BECAUSE THEY JUST DON'T.

JON TALTON: THERE ARE SOME VERY HEROIC DEMOCRATIC LAWMAKERS HERE AND MEMBERS OF CONGRESS. I GESTED BEFORE.
I DON'T WANT TO PUT THEM IN THE WRONG BASKET OF COMMENDABLES, BUT WE DON'T HAVE A TWO PARTY SYSTEM ANYMORE. AT ONE TIME ARIZONA WAS A COMPETITIVE STATE.
SOME OF THE BEST WORK DONE TO LIFT ARIZONA UP WAS DONE BY BURTON BARR, THE REPUBLICAN LEADER IN THE HOUSE AND ALFREDO GUTIERREZ THE DEMOCRATIC LEADER IN THE STATE SENATE WORKING TOGETHER TO IMPROVE THE STATE.

TED SIMONS: SO, WHEN FOLKS SAY THAT CAPITAL AND LABOR, THEY LOOK FOR AND THEY FIND OPPORTUNITY, THE MARKET WILL FIND YOU IF YOU ARE THERE AND A LOT OF FOLKS ARE SAYING, I WANT TO LEAVE THE HIGH TAX ILLINOIS AND HIGH TAX MASSACHUSETTS AND I WANT TO COME TO ARIZONA AND THEY SEEM TO BE DOING THAT. WHEN PEOPLE BRING THAT ARGUMENT UP TO YOU AND SAY THE STILL IS GROWING, THE STATE IS NOT DOING ALL THAT BADLY, AGAIN, YOU SAY?

JON TALTON: WELL, PURE POPULATION GROWTH IS SIMPLY AN ADDED BURDEN, AND A LOT OF THESE ARE RETIREES WHO DON'T EVEN CONSIDER THIS HOME.
WE'RE NOT GETTING THE TOP TALENT AND WE'RE NOT EVEN GETTING VERY MUCH SPILLOVER FROM COMPANIES LEAVING SILICON VALLEY FOR COSTS.
THEY'RE GOING TO PLACES LIKE PORTLAND AND SEATTLE AND DENVER AND SALT LAKE CITY.
THEY ARE NOT COMING HERE.
THE EVIDENCE IS JUST NOT THERE BEYOND SOME ANECDOTES.

TED SIMONS: CAN THAT CHANGE?

JON TALTON: SURE.

TED SIMONS: HOW?

JON TALTON: YOU INVEST IN QUALITY OF LIFE. YOU INVEST IN A REAL DOWNTOWN AND A REAL CENTER CITY AND SO PEOPLE AREN'T CAR DEPENDENT.
YOU PLANT SOME SHADE TREES.
YOU RESTORE THE OASIS.
YOU DON'T HAVE INTOLERANCE.
THE PLACES THAT ATTRACT TALENT TEND TO NOT BE INTOLERANT.THEY TEND TO BE VERY WELCOMING AND THEY TEND TO BE OUTWARD LOOKING.
THERE ARE VERY FEW PEOPLE HERE WHO ARE OUTWARD LOOKING ANYMORE. WHEN GPEC WAS SET UP, GREATER PHOENIX ECONOMIC COUNCIL, IT WAS VERY OUTWARD LOOKING. NO OFFENSE TO GPEC NOW, IT JUST DOESN'T HAVE THE CORPORATE HEADQUARTERS BEHIND IT USED TO. BUT WE DON'T HAVE AN ECONOMIC POLICY THAT'S OUTWARD LOOKING.

TED SIMONS: I COULD TALK TO YOU ALL SHOW ABOUT THIS, AND A COUPLE MORE SHOWS AS WELL.
BUT INTERESTING STUFF.
ROGUE COLUMNIST, CHECK HIM OUT ONLINE.HE DOES A GREAT JOB CHRONICLING PHOENIX.
EVEN THOUGH YOU ARE IN THE NORTHWEST, GOOD TO SEE YOU AGAIN THANKS FOR JOINING US.

JON TALTON: THANKS, TED.