City Revenue Unaffected by Tax Cut

Posted on June 01, 2006 | Type: In the News
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Phoenix Mayor Phil Gordon and other mayors throughout the state are telling residents that police and fire service will have to be cut if the legislature approves an income tax cut. These claims don't square with the facts.

"We have to wonder what balance sheets Mayor Gordon is looking at to draw these conclusions," says Darcy Olsen, president of the Goldwater Institute.

If the state legislature reduces income tax rates by ten percent, revenues to cities and towns will still increase an estimated 50 percent by 2009. A 50 percent increase in shared revenue is not a cut. Cities like Phoenix will share $425 million from state income tax revenue collected this year. This amount will increase every year to $684 million by fiscal year 2009.

Reducing the budgets of police and fire should always be a last resort. The city has plenty of room to cut pork from its budget:

The city of Phoenix is building a Sheraton hotel at an estimated cost of $20 million a year for the next 34 years.

Phoenix just approved a bond package at a cost of $1.8 billion that included such non-essential spending as $8 million for a shooting range, $6.5 million for the opera, and $16 million for a theater.

This $300 million in spending for private purposes will cost the public $24 million in annual interest payments alone. The city could hire 625 policemen a year just with the interest taxpayers will pay for the pork included in the recent bond package.

The Goldwater Institute has raised the question: Where is the priority, police or pork?

Starlee Rhoades, director of communication, (602) 462-5000 x 226.

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