(AP Photo/Ross D. Franklin)
PHOENIX (AP) — The Arizona House late Tuesday night approved nine bills to implement most of a compromise budget negotiated with Gov. Jan Brewer but omitted two controversial tax proposals, including a sales tax increase that Brewer has insisted on.
The Senate followed by giving the same Republican-drafted bills preliminary approval as lawmakers approached the midnight deadline to approve a new budget for the fiscal year starting Wednesday.
The bills, which the Republican-led House mostly approved party lines, 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.
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.
Democrats said the budget would hurt schools and working families.
“We have failed our state,” said Rep. Chris Deschene, D-Window Rock.
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.”
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Associated Press writer Jonathan J. Cooper contributed.
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Copyright 2009 The Associated Press.
“a one-cent sales tax increase” hey?
How about an 18% increase in the sales tax rate? Supposedly they are the same thing but some people tell me that reporting a “a one-cent sales tax increase” is somewhat deceptive and inaccurate?