State Capitol News
4:32 pm
Wed May 6, 2009

House panel approves new budget balancing plan

Phoenix, AZ – A House panel approved a plan of spending cuts and other
maneuvers Tuesday to balance next year's budget.

Lawmakers say there's about a $3 billion gap between revenues and
anticipated expenses. But part of the plan pushed through the
House Appropriations Committee includes permanent repeal of the
state property tax. That levy, known as the county equalization
tax, was suspended in 2006 as part of a political deal when the
state had a surplus. And without legislative action it returns
automatically later this year. Democratic Rep. David Schapira
said that's fine with him, saying it would bring in about $250
million the state needs.

(I'm advocating that we do nothing. I'm advocating that we follow
the deal that was made years ago with regard to the county
equalization tax and we do nothing.)

But Republican Rick Murphy said the state's jobless rate, 4.1
percent when the 2006 deal was struck, is now 7.8 percent.

(Unfortunately, we're likely to pass the national average pretty
soon. This is not the time to go back to higher taxes, or to
increase taxes, when, in fact, we have twice as many people
without jobs.)

The GOP plan actually does include a tax hike of sorts: It alters
a formula that determines school district tax rates, a move that
saves money for the state -- and raises local property taxes by
$85 million.