(AP Photo/Ross D. Franklin)
PHOENIX (AP) — Hours away from a possible partial state government shutdown, the Arizona House omitted two controversial tax proposals while giving preliminary approval Tuesday night to nine bills to revise a legislative budget approved June 4 but not sent to Gov. Jan Brewer.
The Legislature faced a midnight deadline to approve a new budget. The Senate had not begun considering the bills.
The measures considered Tuesday night didn’t include the Republican governor’s proposal to ask voters to approve a one-cent sales tax increase that Brewer wants to help close the state’s multibillion dollar budget shortfall.
The omission created uncertainty about what Brewer would do with the budget bills, which would produce an $8.4 billion compromise she negotiated with top Republican legislative leaders.
Arizona has never had a budget-induced shutdown, and Brewer has said it would be “a disaster.” But she also has said the sales tax increase was needed to avoid damaging cuts to education and other services under the June 4 budget.
A bill to reduce and flatten the state income tax from five rates to one also was not considered by the House. It had been added to a package negotiated by Brewer and Republican legislative leaders in a bid to win votes from conservative Republicans who opposed the sales tax increase.
House Appropriations Chairman John Kavanagh, R-Fountain hills, said neither tax measure was considered because they lacked the votes to pass. “The leadership worked very hard but you can’t get blood from a stone,” he said.
Legislative leaders said they did not know whether Brewer would sign or veto the nine bills if they reached her desk.
However, “these are all bills that she’s negotiated and we’re assuming that she’ll sign them,” said House Majority Leader John McComish, R-Phoenix.
Brewer spokesman Paul Senseman said he would not speculate. But he said Brewer still wanted the sales-tax measure.
Without it, “it would be an incomplete budget,” he said.
Rep. Steve Yarbrough, R-Chandler, left, and Rep. Steve Montenegro, R-Litchfield Park, talk on the house floor during the continued budget impasse at the Arizona State Capitol Tuesday, June 30, 2009, in Phoenix . (AP Photo/Ross D. Franklin)
Brewer’s office has declined to spell out what services would continue and what wouldn’t without a budget, but Senseman said Brewer has directed public safety agencies for police and prisons to maintain normal operations Wednesday.
Lawmakers have said they could pass emergency legislation for temporary spending authority, but there was no action on that by late Tuesday evening. Like many states, Arizona lacks any mechanism to continue government without a shutdown.
The state faces a projected $3.2 billion shortfall.
The recession has shredded many states’ finances, with Arizona’s tax collections hammered by rising unemployment, dampened consumer spending and the housing industry’s collapse.
The emergency legislation would provide one month of funding to keep state funding going, plus possibly authorize Brewer to use a second month’s funding, Kavanagh said.
Kavanagh said the funding would track reduced levels of a Republican legislative budget that was approved June 4 but not sent to Brewer, who has said that spending plan wasn’t adequate.
“This way the government continues funding at a more responsible cost, but all services would resume for the most part,” he said. “It beats a shutdown.”
Besides the sales tax increase, other budget-balancing steps in the negotiated package included $630 million in spending cuts, $262 million of transfers from special-purpose funds, use of $1.1 billion of federal stimulus money and $730 million from refinancing prisons and other state buildings.
Republican state Sen. Carolyn Allen, of Scottsdale, said some fellow Republicans appeared willing to “play chicken” with Brewer, gambling that the governor would accept a budget without the sales tax and not force a shutdown.
“I think they’re playing chicken with the wrong woman,” she said.
A shutdown would not only hurt state workers but also ripple throughout the entire economy, Allen said.
Sen. Ron Gould, R-Lake Havasu City, said it would be worth forcing a shutdown to avoid a tax increase and restore the state to fiscal health.
“I cannot tolerate $800 million of additional borrowing,” Gould said. “We’re not curing the problem. All we’re doing is passing it along to next year.”
___
Associated Press writer Jonathan J. Cooper contributed.
___
On the Net:
Arizona Legislature: http://www.azleg.gov
Copyright 2009 The Associated Press.
This is totally absurd on all accounts, the Gov, the House and the Senate. To hold the State hostage over who is the strongest and most powerful is hurting a lot of families, the workers of the State of Arizona as well as recipients of many good programs under the State. Why has no one brought up the fact that many positions are not totally funded by the State budget. Many positions are partially funded by Federal monies, some are 50% Fed funded, some less, some more, with matching State funding. If the State doesn’t match, the Federal funding will go away. Also, why doesn’t anyone bring up the fact the July 2 payroll deposit is for the Pay Period in June which is covered under the prior budget. Even the last week of June will go on the next July payroll payment. There are 3 pays in the month of July so there is no reason not to pay employees on July 2 or July 16. That one will have one week from June, one week from July.
Also, as far as the Sales Tax. From what I’ve been told by some in the Legislature and Senate, there isn’t really much that Arizonans pay Sales Tax on. Vehicles, Houses, food eaten at restaurants, some grocery items depending on what City ones lives in. There isn’t enough Sales Taxable items to create that much of a ‘fix’. If that’s what it takes, then put it to the voters and let them decide. Smart voters won’t vote for a tax increase. Last thing anyone needs in bad economic times is a tax increase of any kind. Personally think everyone is all hung up on who is right and who is wrong vs looking out for what is good for the people, the families of Arizona. Shutting down State Services hurts everyone. Doesn’t help anyone, and the State Employees will have to be paid anyway, so what has anyone saved? Nothing. They will have to be back paid. 2010 is an Election year and as Republicans who want to win big and become the majority again, this is not the way to do it – fighting each other and not standing beside each other or backing each other when they say they will. It’s all about give and take on all sides for everyone to win. I do hope they all put their little ‘special items’ aside and come together in agreement of a budget that will work for everyone.