House ends session; sales tax vote set for May 18

2010-02-12T05:00:00Z House ends session; sales tax vote set for May 18HOWARD FISCHER Capitol Media Services Arizona Daily Sun
February 12, 2010 5:00 am  • 

PHOENIX -- Arizonans will get to vote on May 18 whether they want a temporary hike in state sales taxes.

The vote was assured Thursday after House Republicans gave up on their demand to link part of a plan to balance this year's budget to future tax cuts, mostly for business. Rep. Steve Yarbrough, R-Chandler, the House speaker pro-tem, said it has become obvious that the Senate is not going to agree to the House demand.

That conclusion allowed the House to vote to formally end the special legislative session it convened last month, concurrent with the regular session, specifically to try to deal with the approximately $1.5 billion deficit that remains this fiscal year.

More to the point, shutting down the session ensures that legislation authorizing the special election can take effect before May 18.

While the action does pave the way for the election, it still leaves the state far short of the dollars necessary to actually balance the books.

Lawmakers had previously agreed to borrow $750 million for the next 20 years in a pair of transactions, one borrowing against future lottery proceeds and the other by selling off $300 million of state buildings and leasing them back.

But the dispute between the House and Senate resulted in the death of another bill that would have deferred into next budget year $450 million in payments that actually are due to public schools and universities this fiscal year.

And the sales tax hike, even if approved by voters in May, won't begin generating dollars until after the current budget year ends June 30.

Paul Senseman, press aide to Gov. Jan Brewer, said she is not worried. Senseman said there is plenty of time during the regular session to enact the maneuver shifting the funding.

That still leaves the question of the tax cut package, which the House had approved last month, the one that state senators refused to tie to the fund shift.

Under that plan, the state would begin in 2011 to reduce the corporate income tax rate, slicing it by about 28 percent by 2016. Individual income tax rates also would be reduced over the same time period by 10 percent.

The measure also would phase out the state's property tax. And it would reduce the basis on which businesses have their land, buildings and equipment assessed for local property tax, a move that would shift some of the burden to homeowners.

Senate President Bob Burns, R-Peoria, said he is in support of the concept as are most Republican legislators. But Burns said he is unwilling to bring that issue to the floor until lawmakers first resolve not only the hole in this year's budget but also a deficit for the coming fiscal year now estimated at more than $3 billion.

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