Much of the talk these days centers around our country’s strong economy, evidenced by low unemployment rates and a plethora of job openings. Yet for many who have remained in the workforce, the economy hasn’t been as rosy. After adjusting for inflation, most sources will tell you that real wages have been stagnant for years. According to the PayScale Index, when adjusted for inflation, real wages have actually declined by approximately 1% since 2017. The cost of living continues to rise, while incomes remain static. Even in a booming economy, Americans are tightening their belts to make ends meet.
What can state and local governments do to help reverse this trend? The same thing that citizens are doing: exercise fiscal restraint.
Here in Arizona our state government has used the strong economy to justify the largest budget in state history: $11.8 billion. That’s an eleven percent increase in spending from the previous year. How is the state paying for these spending increases? Despite the legislature’s desire to repeal the $32 Public Safety Fee (also known as the vehicle license tax), Governor Ducey insisted it remain in effect for at least two more years. Despite the legislature’s efforts to reduce 2018 income tax rates to help offset the tax increase from conforming to the new federal tax code, Governor Ducey vetoed the measure. After the Governor and legislators negotiated the income tax rates for 2019 and beyond, State Senator JD Mesnard vented his frustrations on the Senate floor with a lengthy speech. Mesnard explained that the reduced state income tax rates still won’t do enough to offset the large tax increase caused by conformity. In short, as the state government grows, Arizonans are forced to pay more.
What about municipal governments? Here in my hometown of Gilbert, the situation is not much different. Last year the town council increased our utility bills with a rate increase and a new “Environmental Compliance Fee.” Earlier this month the town council approved a massive $1.05 billion budget, which is an $80 million increase from the previous year. The budget raises the secondary property tax levy to fund a new public safety training facility.
Residents have already seen their property taxes rise in recent years as their homes are assessed at higher values. On top of that, the Gilbert Public School Board will be asking voters this fall to approve another bond override that will further increase property taxes. There is also talk of another property tax increase next year to fund the large park being built southwest of Queen Creek Road and Higley Road.
Supporters of these funding mechanisms, for state and municipal governments, argue that each one is just a minor increase. However, when you add them all up, while factoring in the rising cost of living, these new fees and taxes are quite significant. What happens when our economy slows and we enter an inevitable recession? Taxpayers will struggle even more to make ends meet as they pay for this unsustainable government spending.
That concern was voiced by Gilbert Town Councilmember Aimee Yentes as she voted against the town’s bloated budget. Councilmember Jared Taylor also opposed the budget, arguing against the property tax increase and $80 million spending increase. The remaining five members of the council disregarded these concerns and approved the budget.
Arizona’s economy is doing well, but incomes are not keeping up with the rising cost of living. This trend will only get worse when the economy slows down. Given these circumstances, it is unacceptable that governments continue to increase spending and raise taxes at unsustainable rates. Arizonans don’t need more costly government programs. We need more of our money to stay in our pockets so we can pay our bills.
Let’s keep our elected officials accountable for the excessive burdens they impose on us taxpayers. If they ignore our concerns, vote them out; and elect more fiscal conservatives like Senator Mesnard and Councilmembers Yentes and Taylor.