Repeal of property tax passed

By Howard Fischer
Capitol Media Services
Published/Last Modified on Wednesday, April 9, 2008 3:06 PM MDT


 PHOENIX — Arizona lawmakers voted Tuesday to prevent the return of a property tax but postponed approving a plan to let them cut voter-mandated spending if there isn’t enough cash.


 The 16-14 Senate vote to repeal the levy came over the objections of two Republicans who chided colleagues for renouncing future revenues even before they know how they will finance the state’s needs. “Call me silly, call me crazy,’’ said Sen. Carolyn Allen, R- Scottsdale. “But it doesn’t seem very prudent to me without the long big picture of knowing what this budget and what we’re going to be asked to do, to dump another $250 million on top of it with no plan.’’

 And Sen. Tom O’Halleran, R-Sedona, said the business groups pushing hard for repeal are the same ones lobbying to improve education, pave more roads and keep the state from shifting health care costs onto the private sector. “I guess they want a tax cut and they want money to deal with these programs,’’ he said.

 But the other 15 Republicans, joined by Democrat Ken Cheuvront of Phoenix, provided the margin to send HB 2220, which already has been approved by the House, to the governor.

 Napolitano has signaled she might veto the legislation, calling it “premature.’’ She noted the levy, suspended as part of a 2006 budget deal, does not return until late 2009, making it unnecessary to deal with it now.

 Sen. Ron Gould, R-Lake Havasu City, said it makes just as much sense to kill the tax now as any time. “I made a promise to the taxpayers of my district that I would cut property taxes,’’ he said. “Property taxes are egregious,’’ Gould continued. “Essentially what you’re saying is, you pay your tribute to the government or we’re going to take your property.’’

 And Sen. John Huppenthal, R-Chandler, said cutting taxes will make the state more attractive for business, ensuring that Arizona’s youngsters have access to high-paying jobs — or jobs at all.

 The timing comes as the current $10.6 billion state budget currently is running about $1.2 billion in the red.

And without action, next year’s proposed spending exceeds anticipated revenues by a figure approaching $2 billion.

 Shortly after voting to repeal the tax, the Senate Appropriations Committee debated how to deal with future deficits.

 A 1998 constitutional provision bars legislators from tinkering with programs approved at the ballot by voters.

 That has barred legislators from altering a voter-approved formula that annually boosts state aid to schools — now more than $4 billion a year — to account for inflation. And lawmakers cannot ignore another ballot measure which requires the state to provide free health care to everyone below the federal poverty level, now about one out of every seven Arizonans.

 Sen. Bob Burns, R-Peoria, said the result is that the budget grows automatically by more than $500 million each year. Burns, who chairs the Senate Appropriations Committee, said that causes a crunch in years like this when state revenues don’t keep pace - - or, as they have this year, actually decline.

 HCR 2044 would ask voters to let lawmakers make spending adjustments in those programs in years there is a state deficit.

It even would let them take money that voters approved for special purposes, like higher tobacco taxes for health programs, and instead use it for other spending.

 But Sen. Paula Aboud, D-Tucson, said that language is far too broad.

She said it could open the door to wholesale destruction of voter-approved programs simply because expenses exceeded revenues by even a dollar.

 Burns conceded the point as he postponed a vote on the measure. “I do think we need to be more clear on what constitutes a situation where the trigger could be pulled and we would have the authority to make change,’’ he said.

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