O'Neil Associates

Cut Spending and Raise Taxes?

As the legislature convenes its 2005 session, a just-released survey of Valley business and community leaders shows that they see a need to take traditionally unpopular measures. The Valley Influentials Poll, which surveys members of Valley Leadership, East Valley Partnership, Greater Phoenix Leadership, and Westmarc, asked, “Which of the following measuring should the state government adopt to reduce budget deficit: borrow money, cut spending, raise taxes, or none of these?”

Over half (53%) of our Valley leaders support a tax hike. Cutting spending receives the support of a similar proportion of our Valley’s leaders (56%). Borrowing money and doing nothing are clearly less popular solutions, with borrowing supported by just 16% of our leaders and taking none of these actions suggested by a mere 6%.

One year ago our Valley leaders were asked this same question. Over the past year, their proposed solutions have changed only modestly. The differences between the current iteration’s figures and those obtained in July of 2003 do not significantly differ.

Democrats Recommend a Tax Hike –

Not All Republicans Oppose

Although Democrats are far more willing to back a tax hike than are Republicans, fully one-third (34%) of Republicans do support some form of tax increase. There are strong partisan differences, but one-third (34%) of Republicans is a proportion not to be dismissed. Clearly there is significant sentiment towards a tax increase, even among republicans.

Among Democrats, of course, the proportion supporting a tax increase (75%) is considerably greater. Such partisan differences in perspectives about how to manage deficits, however, are typical. The real surprise with these results is the sizeable proportion of Republican respondents backing a tax increase. The poll’s director Dr. Michael O’Neil commented on this uncharacteristic response, “Our state has a long history of avoiding tax increases and instead opting to cut spending. The surprise in this poll is that many Republicans are coming to the conclusion that although a tax increase is not desired, it may be necessary.”

About the Poll. The O’Neil Associates Valley Influentials Poll is a web-based survey that was sent to all members of Greater Phoenix Leadership, Valley Leadership, East Valley Partnership, and Westmarc. As such, this survey does not purport to be a random or representative sampling of the general population of the Phoenix metropolitan area. It would be difficult, however, to conceive of a more comprehensive representation from which to draw inferences about the opinions and sensibilities of business and community leaders than the combined membership of these organizations, although, inevitably, any definition of influentials is somewhat subjective. The persons surveyed are likely to exert disproportionate influence on and be an early indicator of community opinion by virtue of their position, community involvement, and political participation. The O’Neil Associates Valley Influentials Poll was not sponsored or paid for by any outside organization. 308 participants completed the survey between July 15 and Aug. 2, 2004, yielding a margin of error of ±5.7%. O’Neil Associates, Inc. is a Tempe-based public opinion research firm specializing in client-focused attitude and awareness studies for a wide variety of industries and organizations.

Legislative Agenda:

Cut Spending and Raise Taxes?

Democrats Recommend a Tax Hike –