If you’re reading this, you should know that the UA has an immense budget problem.
Unfortunately, the state — alternately the university’s parent and sugar daddy/mama — doesn’t aim to play much of a remedial role. Gov. Jan Brewer, as indicated in her proposed budget for the 2011 fiscal year, wants to keep state appropriations to the UA’s main campus at precisely 2010 levels.
To be fair, Brewer has a relative Moby Dick to fry in addressing Arizona’s growing deficit, which the Arizona Republic estimates at $3.2 billion. What has seemed to especially captivate the governor of late is boosting Arizona’s sales tax. After failing to do so last year, she succeeded Thursday in convincing state legislators to submit a one-percent increase to voters in May.
If approved, the increase would last three years and raise as much as $2.9 billion over that span, the Phoenix Business Journal reported Thursday. Certain business groups back the increase because it may “”help avoid cuts to education and key services.”” House Speaker Kirk Adams, R-Mesa, also signed on in support.
Only a week earlier, according to the Journal, Adams joined a fusillade of House Republicans who passed a bill cutting a variety of corporate, income, property and small-business taxes to encourage companies to invest in Arizona. The victims included the State Equilibrium Property Tax Rate, formerly known as the County Equalization Assistance for Education Tax Rate.
From 2006-2008, the tax was suspended and the rate set at zero, which prevented the state from reaping more than $200 million in funding for K-12 education in each of those years, according to the Arizona Education Association. The rate was raised to $0.33 per $100 in assessed property value in 2009, which the Arizona Department of Revenue estimated would raise $247 million.
The tax isn’t quite dead yet; the bill must still pass the Senate. But its endangerment raises an interesting question: Given the state’s seeming ambivalence in using taxes to address education generally, why not develop a new tax to definitively fund its universities?
This idea would not be popular. Taxes stand hand in hand with terrorism as America’s contemporary demons. But consider this: Arizona ranked in the top ten in terms of lowest state and local tax rates as of Jan. 1, 2009, according to the Washington D.C.-based Tax Foundation. So there’s room to work with, comparatively speaking. And if you’re going to drum up money for a worthy cause, education at any level must top the list of recipients. What other field, for all its attendant and diverse benefits to society, has been so thoroughly and consistently shafted on the budget sheet?
Keeping in mind the notion of social value, one solution could be to create a “”variable consumption”” tax. Without going into a gaggle of jargon, the idea would be this: Items that provide relatively low benefit to society will be taxed higher, and vice versa. A PDA, for example, does not literally nourish one’s body. So an iPad might feature a 12-percent tax, versus a one- or two-percent tax for a banana.
This system would encourage the purchase of necessities over relatively useless commercial goods. This concept aligns with the purpose of “”junk food”” taxes enacted sporadically across the U.S. — and which Arizona is considering, according to The New York Times. Proponents hope such taxes will deter individuals, especially children, from the negative effects of eating low-priced, low-nutrition food. The tax proposed here would both carry that benefit and broaden it by making more accessible items known to procure physical, mental and emotional health.
The advantages derived from this system would more than offset the costs. As generations of video game systems and Apple products have demonstrated, high price tags don’t necessarily deter people from buying expensive luxury items. And those who do would be providing an important public service. The proceeds from these purchases could be enormous, and perhaps put the UA — not to mention its sister universities — in a stage of unparalleled opulence.
Admittedly, this is a highly subjective exercise, prone to the cries of “”socialism”” and excoriation on cable news networks. That mere fact will probably keep this type of tax from ever gaining traction on the legislative floor. Even so, when there’s clearly nothing to gain, what is there to lose?
—Tom Knauer is a first-year law student. He can be reached at letters@wildcat.arizona.edu.
