If the flat income tax was replaced with the prior graduated system, we would be able to fund obligation items like suspended formulas and even completely cut our child care waiting list

Projected three-year budget balances if we had not passed the flat income tax, met obligations and fully funded child care

Carryforward No Flat Tax Delayed Costs Restore FY2025 Cuts + Fund Transfers Suspended Formulas
Child Care Traditional One-time "Ongoing" Expenses



Notes: AZCenter analysis of sources below.
-- No Flat Taxcalculations are based on ITEP model results of restoring prior personal income tax rate structure
-- Delayed Costs include $801M K-12 rollover + $1M Homeless Youth Assistance Funding
-- Restore FY2025 Cuts + Fund Transfers is larger in FY2025 due to including $333 Water Supply Funding cut
-- Suspended formulas includes $40M Arizona Department of Administration Building Renewal + $241M Universities Building Renewal + $39M Arizona Financial Aid Trust. Amount should be higher but we do not have cost estimates for Maricopa and Pima Community Colleges.
-- Traditional One-time "Ongoing" Expenses are $183M School Facilities Repairs + $140M State Employment Health Insurance Trust Fund that have been included in budget for past 5 years
--Child Care calculations are based on OSPB estimates and assume 6 month cost for FY2025, $30M ongoing funding received from federal funds and no additional one-time federal funding for FY2027 and FY2028
Chart: Arizona Center for Economic ProgressSource: Joint Legislative Budget Committee (JLBC), FY2026 Baseline: JLBC FY2025 Appropriations Report; Office of Strategic Planning and Budgeting (OSPB) FY2026 Executive Budget; and Institute on Taxation and Economic Policy (ITEP) model results December 2024Created with Datawrapper