State Capitol News
9:46 am
Thu July 30, 2009

Latest budget fix includes one cent tax

Phoenix, AZ – The plan includes Gov. Jan Brewer's demand to ask voters to hike
the state 5.6 percent sales tax by a penny in 2010 and 2011, and
just a half cent in 2012 before going away. It also would
permanently cut corporate income tax rates by 30 percent
beginning in 2011 and individual income taxes by 6.6 percent. And
it would repeal the currently suspended state property tax.
Brewer acknowledged that approving the tax cuts now, which are
not subject to voter approval, will leave the state in a bigger
financial hole if Arizonans reject the temporary tax hike.

"It is imperative, I believe, it is absolutely imperative that
the voters support the temporary sales tax to turn us around," Brewer said. "If
they don't, we will have no other alternative than to go in and
to cut more services."

But Brewer said the tax breaks, some of which are a bigger
benefit to business than homeowners, are justified.

"We're going to work very, very hard for economic development and
to be able to grow businesses here, provide new jobs, and reward
those employers here in Arizona that have stuck it out with us
during the hard times."

As of this morning, though, Senate President Bob Burns admitted
he doesn't have the necessary votes for the plan.