Candidates consider closing tax loopholes, cuts to solve budget crisis

Editor's Note: Four candidates are running for the two open seats in reapportioned District 3 of the state House of Representatives, and two candidates are running for the new Senate seat in District 3.

The district covers most of Mohave County and portions of La Paz and Coconino counties.

Candidates for the House are Democrats Matt Capalby and Richard Glancy, both of Kingman, and Republicans Bill Wagner of Bullhead City and Joe Hart, a former state representative who lives in Kingman.

Republican state Rep.

Linda Binder of Lake Havasu City and Democrat Jacquie Jessie of Bullhead City are running for the Senate.

The Miner began a four-part series Tuesday on how the candidates stand on the issues.

The series concludes today with a story covering the state's budget crisis.

Whoever is elected to the state House of Representatives and Senate Nov.

5 will inherit a state budget crisis with a projected shortfall of more than $400 million for the current fiscal year.

The District 3 candidates said they will consider two approaches to reducing the shortfall: cutting the number of sales tax exemptions the Legislature granted to various businesses and slashing spending for some state programs and services.

No one suggested raising taxes as a remedy.

"You are looking at a Catch-22," House candidate Richard Glancy said.

"Economic development is designed to increase revenues.

The problem we have is the conservatives have this mantra of 'Let's cut taxes.'"

Arizona has five to six times as many exemptions as other states, Glancy said.

He added one of the reasons for the exemptions is that it takes a simple majority vote to approve them and a two-thirds vote to eliminate them.

"You have to look at every one (of the exemptions) and determine their validity," Glancy said.

"If they are still valid, keep them."

House candidate Matt Capalby called for closing the loopholes, saying the exemptions increased from 22 in 1990 to 172 today.

"I pay my taxes," Capalby said.

"These are tax exemptions that the general taxpayer does not enjoy.

We need to close some of them.

We need to review all of that.

We need to revamp the tax because the burden has continuously been pushed more and more on the small-business owner and the wage earner."

Joe Hart, who was elected to the first of four terms in the House in 1992, said some loopholes need to be closed, but he believes exemptions should continue to apply to personal services such for attorneys and chiropractors.

Candidates Linda Binder, Jacquie Jessie and Bill Wagner said a review of the exemptions is in order.

"I think we've got to take a total look at our entire revenue system," Binder said.

"It has not been reviewed in years."

Wagner said he wants to see a list of exemptions.

"I would want to know who and why are these tax exemptions in place," he said.

"These exemptions took time to put in place.

To do away with them is also going to take a scrutiny."

Wagner, a retired fire chief from Bullhead City, said he favors a source of revenue that Congress so far has exempted from sales taxes: merchandise purchased online.

He described the exemption as being unfair to Arizona businesses that sell their products the old-fashioned way.

He also criticized unfunded federal mandates for adding to the costs of state government and supports obtaining more revenue sharing from the federal government.

Hart said the options are limited: raise taxes or cut spending.

"If I am elected, I'll work to cut the spending," he said.

"There is so much duplication in state government and waste."

Hart said he thinks Child Protective Services, which is part of the Department of Economic Security, should face cuts because of duplication of services provided by other state agencies.

Glancy said he wants to eliminate duplication and believes the Legislature should examine government operations to determine whether some services should be contracted out to the private sector to save money.

Capalby said he supports cutting or eliminating programs that are antiquated.

Binder said that if she would not cut any programs if she had her way.

Her opponent, Jessie, said she would not know what government agencies and programs to cut until she joins the Legislature.

Candidates disagree over what agencies should be spared from the budget ax.

Jessie described the decision as a tough one and said the 10 percent cuts ordered by the Legislature hurt people.

"When they cut revenue-sharing, they hurt the towns and cities," she said.

"You've got to take a look at the programs.

The cities depend on that (state-shared) revenue."

Wagner said spending in the classroom should be spared from any cuts, adding he believes spending for that purpose should be increased.

Capalby said he would protect certain health care and humanitarian programs from budget cuts.

"But then again," he said, "it is a matter of review."

Binder said she wants to spare public health, public safety, education and health care.

She added the state should consider charging for some services or impose impact fees.

Hart said he would not spare any program.

"Everybody should expect to have some kind of cuts," he said.

Hart suggested cutting costs for the Department of Corrections by establishing different schedules for inmates for working and sleeping.

Glancy said any program that meets a serious need should be maintained.