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CAA Responds to Legislators’ Criticism of Rise in AHCCCS-Covered Births

Dana Wolfe Naimark, CAA President and CEO, responded this week to some legislators’ criticisms of a reported increase in the number of births covered by AHCCCS. (State pays for 53% of Births, Arizona Republic, September 23, 2012)

“Some legislators sure don’t know a good news story when they hear one! Arizona scores a win     for taxpayers and for families with low-cost AHCCCS health coverage available for prenatal care, and labor and delivery care for parents who don’t have private health insurance. All Arizonans want babies to be born healthy and to get off to a good start in life. That’s exactly what AHCCCS coverage offers with high quality care from private doctors in private health plans. The number of babies paid for by AHCCCS has been dropping every year since 2007 as parents hold off on having children due to the economy. But it’s a good thing AHCCCS is there, since private health coverage has been falling. Thanks to AHCCCS, Arizona saves millions of dollars in trauma and emergency room care as well as long-term health expenses for problems that could have been prevented.”

Who are the 47%?

skin in the game tax Charts jo2012 Presidential candidate Mitt Romney made some infamous remarks about how 47% of American households don’t pay federal income taxes. Here’s a chart that shows he missed a key point:

Taxpayers with Lowest Incomes Pay Highest Percentage in State and Local Taxes

Children’s Action Alliance Statement by Dana Wolfe Naimark, President and CEO: Who Really Pays Arizona Taxes?

By now, it’s clear that Governor Romney’s statements about the 47% of American households who don’t pay federal income taxes missed some key points – about Americans and about tax policy. We often hear similar false assumptions about who pays their fair share of state taxes here in Arizona.

The facts show that the Arizona legislature has created numerous methods that profitable corporations and taxpayers of all incomes use to shrink their income taxes. People who don’t owe state income taxes include unemployed Arizonans, working families earning low incomes, seniors receiving social security benefits, and families claiming tax credits. Arizona households who do not pay state income taxes are still paying to support schools, roads, and other public assets. They pay state sales taxes when they go to the store. They pay property taxes through their rent or mortgage. If they own a car they pay taxes when they renew their registration and fill the tank with gas.

When all state and local taxes are combined, low-income households have the most “skin in the game” – the lowest income households pay more than two times the richest 1% as a share of their income.

Arizona needs a budget and tax system that fuels our goals for a vibrant economy and strong families. Taxpayers deserve an honest analysis of who pays taxes and the reforms that will make our communities healthier and more secure. Consider:

  • For tax year 2009, three out of four corporations that filed income taxes in Arizona paid the minimum tax of $50. (Arizona Department of Revenue, Tax Year 2009 Corporate Statistics, 12/11.)
  • In 2010, corporations reduced their Arizona income tax liability by $72.7 million through the use of tax credits. Another $265 million in tax savings was carried forward to apply in future years. (Arizona Department of Revenue, Arizona Income Tax Credits, June 2012.)
  • There are 31 tax credits available to individuals and families on Arizona state income taxes. In 2009, 115,000 taxpayers in Arizona wiped out their personal state income tax bill through tax credits. A family with adjusted gross income of more than $130,000 can end up paying nothing in state income taxes through the use of five common tax credits. (Arizona Department of Revenue, Arizona Income Tax Credits, June 2012; email information from Office of Economic Research and Analysis, 12/9/11; example calculation based on laws for tax year 2011)
  • In 2009, 460,000 taxpayers wiped out their state income tax bill through the standard or itemized deductions. They had high medical expenses, large amounts of mortgage interest, or other deductions. (Arizona Department of Revenue, email information from Office of Economic Research and Analysis, 12/9/11)
  • Taxpayers don’t pay state income taxes on some types of income, including social security retirement benefits, and active duty military pay.
  • 8 out of 10 Arizonans pay more in state and local sales taxes than in state income taxes. (Institute on Taxation and Economic Policy, Who Pays? November 2009)
  • Many families with very low incomes still owe and pay state income taxes. In 2010, a family with two parents and two children owed state income taxes in Arizona if their total income was $23,600 – just $1,300 out of poverty. (Center on Budget and Policy Priorities, The Impact of State Income Taxes on Low-Income Families in 2010, November 2011)
  • The richest 1% of families in Arizona pay $5.60 in state and local taxes for every $100 in income. The poorest 20% pay $12.50. (Institute on Taxation and Economic Policy, Who Pays? November 2009)

Chart: Taxpayers with Lowest Incomes Pay Highest Percentage in State and Local Taxes

For a more complete analysis, see Skin in the Game: Who really pays Arizona taxes?

Children’s Action Alliance Statement by Dana Wolfe Naimark, President and CEO: Who Really Pays Arizona Taxes?

FOR IMMEDIATE RELEASE
Contact: Dana Wolfe Naimark  (602) 266-0707 #214
Download PDF Version

By now, it’s clear that Governor Romney’s statements about the 47% of American households who don’t pay federal income taxes missed some key points – about Americans and about tax policy. We often hear similar false assumptions about who pays their fair share of state taxes here in Arizona.

The facts show that the Arizona legislature has created numerous methods that profitable corporations and taxpayers of all incomes use to shrink their income taxes. People who don’t owe state income taxes include unemployed Arizonans, working families earning low incomes, seniors receiving social security benefits, and families claiming tax credits. Arizona households who do not pay state income taxes are still paying to support schools, roads, and other public assets. They pay state sales taxes when they go to the store. They pay property taxes through their rent or mortgage. If they own a car they pay taxes when they renew their registration and fill the tank with gas.

When all state and local taxes are combined, low-income households have the most “skin in the game” – the lowest income households pay more than two times the richest 1% as a share of their income.

Arizona needs a budget and tax system that fuels our goals for a vibrant economy and strong families. Taxpayers deserve an honest analysis of who pays taxes and the reforms that will make our communities healthier and more secure. Consider:

  • For tax year 2009, three out of four corporations that filed income taxes in Arizona paid the minimum tax of $50. (Arizona Department of Revenue, Tax Year 2009 Corporate Statistics, 12/11.)
  • In 2010, corporations reduced their Arizona income tax liability by $72.7 million through the use of tax credits. Another $265 million in tax savings was carried forward to apply in future years. (Arizona Department of Revenue, Arizona Income Tax Credits, June 2012.)
  • There are 31 tax credits available to individuals and families on Arizona state income taxes. In 2009, 115,000 taxpayers in Arizona wiped out their personal state income tax bill through tax credits. A family with adjusted gross income of more than $130,000 can end up paying nothing in state income taxes through the use of five common tax credits. (Arizona Department of Revenue, Arizona Income Tax Credits, June 2012; email information from Office of Economic Research and Analysis, 12/9/11; example calculation based on laws for tax year 2011)
  • In 2009, 460,000 taxpayers wiped out their state income tax bill through the standard or itemized deductions. They had high medical expenses, large amounts of mortgage interest, or other deductions. (Arizona Department of Revenue, email information from  Office of Economic Research and Analysis, 12/9/11)
  • Taxpayers don’t pay state income taxes on some types of income, including social security retirement benefits, and active duty military pay.  
  • 8 out of 10 Arizonans pay more in state and local sales taxes than in state income taxes.  (Institute on Taxation and Economic Policy, Who Pays? November 2009)
  • Many families with very low incomes still owe and pay state income taxes.  In 2010, a family with two parents and two children owed state income taxes in Arizona if their total income was $23,600 – just $1,300 out of poverty. (Center on Budget and Policy Priorities, The Impact of State Income Taxes on Low-Income Families in 2010, November 2011)
  • The richest 1% of families in Arizona pay $5.60 in state and local taxes for every $100 in income. The poorest 20% pay $12.50. (Institute on Taxation and Economic Policy, Who Pays? November 2009)

For a more complete analysis, see Skin in the Game:  Who really pays Arizona taxes?

Children’s Action Alliance is an independent voice for Arizona children at the state capitol and in the community. CAA works to improve children’s health, education, and security through information and action. 

Most Education Funding is Getting to the Classroom

You’ve probably heard a lot of talk lately about K-12 education funding and the press conference we had last week focusing on the Center on Budget and Policy Priorities report, New School Year Brings More Cuts in State Funding for Schools. The report showed Arizona cut state K-12 per pupil funding more than any other state in the last five years.

You’ve probably also heard some folks who support budget cuts to education say that the real problem is that too much money is spent on  administration, leaving too little for the classroom.

But the facts show that the amount Arizona spends on school administration is actually about as low as it gets. According to the U.S. Census Bureau report, Public Education Finances: 2010, Arizona ranks as the state with lowest amount of per pupil spending on school administrative costs and near the bottom (46th) in school district administrative costs.

The percent of total spending on each type of administration is below the U.S. average – less than 7% for both categories combined.

There are many strategies underway in Arizona to boost student achievement. But no one should pretend that education and accountability can be improved while resources are slashed. Proposition 204 gives voters the chance to restore funding to education with no new taxes.

School Administrative Costs in Arizona

You’ve probably heard some folks who support budget cuts to education say that the real problem is that too much money is spent on  administration, leaving too little for the classroom.

But the facts show that the amount Arizona spends on school administration is actually about as low as it gets. According to the U.S. Census Bureau report, Public Education Finances: 2010, Arizona ranks as the state with lowest amount of per pupil spending on school administrative costs and near the bottom (46th) in school district administrative costs.

big pic of per pupil spending az vs us general admin and school adminThe percent of total spending on each type of administration is below the U.S. average – less than 7% for both categories combined.