Plan to Provide Big Tax Cuts for Business Could Cause Governor Problems

Phoenix, AZ – The legislation cuts corporate income taxes by 28 percent. It
also contains a provision that would virtually eliminate income
taxes for firms who sell most of their goods outside of the
state. And the state property tax would be phased out. Only thing
is, the move comes just ahead of a May 18 election where the
governor wants voters to hike their own taxes on everything they
buy to help balance the budget.

(Certainly we can't go in and ask the voters for a temporary one-
cent sales tax and then turn around and give that all away in tax
cuts. So it has to be implemented properly. But we have got to be
competitive with those surrounding states in order to get those
businesses to come here to do jobs.)

Senate President Bob Burns said he agrees that some elements of
the state's tax code make Arizona less attractive to firms
seeking to relocate or expand here. But he is concerned about
passing large tax cuts now.

(I think the priority we have to worry about is the deficit. If
we do something that will increase the size of the deficit,
that's wrong, becuase I don't know who comes here as a business
if they look at our financial situation and see that we're X
number of dollars in deficit and not closing that gap.)

The measure already has been approved by the House and awaits
Senate action. For Arizona Public Radio this is Howard Fischer.