KNAU and Arizona News
11:12 am
Fri August 21, 2009

Brewer contemplating budget

Phoenix, AZ – The package is virtually the same one that Brewer vetoed more than a month ago, calling the plan -- quote -- fatally flawed --unquote -- because of the $630 million in new spending cuts. But the governor subsequently agreed in negotiations with Republican legislative leaders to approve those cuts, but with one condition: They had to give voters the chance to temporarily hike the state sales tax to restore some of the funding. As it turned out, the Senate couldn't come up with the votes. So lawmakers on Thursday sent her the budget anyway. Gubernatorial press aide Paul Senseman was noncommital about what his boss is going to do next.

(She's in the process of making some final determinations about
what she'd like to do with the legislation. The governor
continues to have meetings with legislators and discussions. And
I suspect that will continue throughout this day and into
tomorrow.)

Those discussions center around whether lawmakers will eventually
give Brewer that sales tax referral she wants. What did become
clear on Thursday is that special election won't happen on Dec. 8
as the governor had sought. State Elections Director Jim Drake
said the last legal day to call an election would be Sept. 8. But
Maricopa County Elections Director Karen Osborne said she talked
to the people who supply the special paper for the 1.8 million
ballots that would be needed.

(What's the very last minute that we can order it so you can go
do whatever it is to manufacture this paper? And they just said
if we can't do it by the 21st then it is not do-able for the
8th.)

Today is the 21st. But lawmakers don't come back until Tuesday.
Brewer wants an election as early as possible: The sooner there
is a vote, the sooner the proposed one-cent surcharge on the
state's 5.6 percent sales tax can be collected. Each month of
delay loses the state about $80 million. House Speaker Kirk Adams
said Brewer needs to sign the budget bills despite the failure of
lawmakers to approve that sales tax election.

(I do believe that this is the worst fiscal crisis the state has
ever faced. We are in a major cash flow crunch. And there are a
lot of very good reasons to sign these bills.)


He said the state needs a line of credit to pay its debts that
come due before tax collections come in. But the banks won't
provide that without a balanced budget. Adams said if Brewer
signs the budget bills he and Senate President Bob Burns promised
to keep working to find the votes to put the sales tax issue on
the ballot. That, however, could require a leap of faith by
Brewer -- and not a lot of time to make that decision. The
Arizona Constitution gives Brewer until end of the day Wednesday
to decide whether to sign or veto each of the bills or allow them
to become law without her signature. And that deadline does not
change if lawmakers haven't approved the tax referral by then.
But even if Brewer approves the budget, she still has some cards
to play. One of the bills now on her desk would permanently
repeal the state's property tax. Suspended in 2006 when Arizona
had a surplus, it will automatically be included on the tax bills
going out next month unless Brewer signs the repeal. The governor
had agreed to do that -- but only if she also got that sales tax
referral. Without that, Brewer may be unwilling to forego the
$250 million a year the property tax levy would generate if
reinstated. Second, Republican legislative leaders want to act
now to cut corporate and individual income taxes beginning in
2011. Brewer's feelings on that bill, which has yet to gain final
Senate approval, could be contingent on the sales tax referral.
For Arizona Public Radio this is Howard Fischer.