Businesses may have to wait past 2012 for tax cuts

By Howard Fischer
Capitol Media Services
Published/Last Modified on Wednesday, October 21, 2009 2:32 PM MDT


TEMPE — Arizona businesses may have to wait a bit longer than 2012 for the tax cuts she promised, Gov. Jan Brewer said Monday.


Brewer, speaking to members of the Tempe Chamber of Commerce, complained about the refusal of lawmakers to adopt her plan to ask voters for a temporary hike in the state sales tax to help balance the budget for this fiscal year and the next two.

“The will wasn’t there to send it out to the people,’’ she said. “So now I’m a year behind in our plan to get this all kind of squared away and get us onto the path of prosperity and kind of turn the engine around,’’ Brewer continued. She said that leaves the financial situation in limbo until the Legislature comes back with some acceptable alternative.

But Brewer noted later that her five-point plan for returning the state to prosperity, outlined in March, was built on the assumption of the temporary boost in revenues now. Then, in 2012, the state could actually reduce business taxes in an effort to jump start the economy.

And the governor said she assumes that the delay in the first part of her plan means a commensurate delay in the last.

Brewer on Monday repeated some of the same themes from her March plan, notably her belief that the way to long-term state fiscal stability is encouraging more businesses to locate and expand here. And that, she said, is going to require revamping the state’s tax structure.

Some of that Brewer said, relates to the corporate income tax which is now just a hair less than 7 percent. But Brewer also said the state needs to look at its property tax system.

That has come under fire because companies not only pay proportionately more than homeowners but also that they are taxed, annually, on the value of their equipment. That, in turn, makes the state less attractive to manufacturers.

“I was willing to do that,’’ Brewer said, even to the point of enacting tax cuts now that would take effect in future years. But Brewer said she wasn’t willing to pursue that course once her proposal to put the temporary sales tax hike on the ballot failed to get the necessary votes.

And she even was willing to sign legislation to permanently repeal the state property tax entirely.

“I couldn’t see doing tax cuts,’’ she said, saying that repeal amounted to “making things worse.’’

Brewer said she remains committed to pushing through those tax cuts — when the time is right.

“I think it’s important that we reach out and we really work on our economy,’’ she said. “And we can only do that by making things good for businesses to function here.’’

Brewer pointed to figures showing construction employment at about half of what it was at its peak.

“We need high-tech, high paying jobs (and) industries in the state of Arizona,’’ she said. “By reducing taxes, that’s going to bring them here.’’

Brewer said, though, she is willing to listen to arguments that the state still can afford tax cuts in 2012.

 

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