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Arizona Daily Star
PHOENIX — Even with the addition of a three-year cap on how much money the state can spend, Republican legislative leaders are still working to garner support from rank-and-file lawmakers to send a sales-tax increase to the ballot.
The issues are part of a budget agreement they announced Wednesday with Gov. Jan Brewer.
Just hours after the compromise was formally announced, Senate President Bob Burns pulled the plug on any plans to push the package through Wednesday night, acknowledging that it doesn't yet have the necessary votes from Republicans.
"We need to stop the train and get things back on ground zero here so we know where we're at," he said after adjourning for the night.
If they can wrangle support, Republican leaders are poised to send a measure to the ballot in November asking voters to raise the sales tax, as Brewer has requested. But it would also cap state spending for the next three years — an addition designed, Republicans say, to get conservatives on board.
A separate measure would ask voters to let lawmakers dip into spending that voters have previously approved for programs ranging from publicly financed elections to early childhood education.
In its current form, and if approved by voters, the GOP proposal would raise the sales tax by a penny on the dollar for two years. In the third year, it would be only a half-cent-per-dollar increase. Then it would go back down to its current rate, 5.6 percent.
In turn, Brewer would approve about $1 billion in state spending cuts, a permanent repeal of the state property tax — valued at $250 million this year — and $400 million in income tax cuts that would take effect in 2012.
On Wednesday afternoon, Brewer and House Speaker Kirk Adams stood side by side at a press conference after budget talks in her office.
Brewer recalled the "difficult times" between her, Adams and Burns that led to this latest agreement: intense disagreements over her call for a tax increase, line-item vetoes of much of her own party's budget, passed July 1 and harsh — often personal — criticism of each other.
Brewer, though, said the compromise reflected the priorities of both sides.
She called it a "long-term plan to turn Arizona around and right the ship."
But Brewer did acknowledge that if the three-year tax boost fails at the ballot, the state would be in an even deeper financial hole with the tax cuts Republicans are planning to pass in the Legislature.
"We all know what we're headed into if it doesn't pass," Brewer said.
Adams, who wouldn't say if he'd support the sales-tax increase on the ballot, said the tax cuts are sound policy either way. In the long term, he and other Republicans argue, state revenue will grow because the cuts will lead to economic development.
"If Arizona is going to get out of the worst recession that we are in, we've got to produce an economic environment where people can hire again, they can build buildings again, and they can get the economy moving again," said Adams, R-Mesa.
Democrats, however, called the entire approach irresponsible, and they speculated that the spending cap was added to the tax-increase measure in an effort to kill it at the ballot. Polls have shown that voters generally support a sales-tax increase to pay for schools, health care and public safety.
"If I were folks who cared about funding — like, for instance, the governor — I would be scared," said Assistant House Minority Leader Kyrsten Sinema, D-Phoenix.
There is also opposition from some key Republicans.
Burns said that, even coupled with the spending cap — set at $10.2 billion, basically the 2009 spending level for the state — some conservatives are still having difficulty supporting the sales-tax ballot referral.
They include Rep. Frank Antenori, R-Tucson, who said he would agree to support the tax referral only if the governor agreed not to use the money to backfill budget cuts made by the Legislature — a key reason she wants the tax revenue.
"We have to cut," Antenori said.
Burns, Brewer and Adams planned to meet again this morning in hopes of finishing and passing the package.
"We've got state government on life support, and what we're trying to do is a transfusion," said Burns, R-Peoria. "This doesn't cure the patient. We've got a lot of work to do yet."
Contact reporter Daniel Scarpinato at 307-4339 or dscarpinato@azstarnet.com.
