The Arizona Republic
May. 26, 2006
The House and Senate passed
substantial - and conflicting - tax-cut
proposals late Thursday after breaking off
budget negotiations with Gov. Janet Napolitano.
Not only do House and Senate Republican leaders differ sharply with Napolitano over tax cuts, education and other key parts of the budget, but they also apparently no longer agree with each other.
Senators upped the ante on tax cuts first. They voted for a 10 percent reduction to the state income tax and eliminated a state-levied property tax. The actions would send back $500 million to Arizona taxpayers in the 2006-07 budget year. The 10 percent income-tax cut would return about $120 to a person with a $50,000 salary, and the property tax cut would save about $100 a year for the owner of a $250,000 house.
Napolitano has balked at a Republican plan for two years of tax cuts, so the Senate packed the entire plan into one year. Senate President Ken Bennett said new revenue numbers, which are expected to push the $1.2 billion surplus up to about $1.4 billion, make the larger tax cut affordable.
If the tax-cut package makes it to Napolitano's desk and she vetoes it, Bennett said Republicans would put the measure on the November ballot. "The governor said she would never ever ever do a multiyear tax cut so the only other option is to do it in one year," said Bennett, R-Prescott. "We're going to give her an opportunity to sign it. If she won't do that, we're going to go to the voters."
But that's a big if because House Speaker Jim Weiers went in a different direction late Thursday. The House gave preliminary approval to a two-year income- and property, tax cut as part of a $9.9 billion overall budget plan. The Senate did not vote on the rest of the budget and does not appear to have support for the plan coming from the House.
So while both houses took significant steps Thursday, an ultimate resolution to the budget standoff and a chaotic 140-day legislative session seems hazier than ever. Bennett said he is confident the House and Senate can work out their differences. But with the upcoming holiday weekend, and some members heading out of town, the earliest the budget impasse can be broken is Wednesday.
Senate Minority Leader Linda Aguirre said she sensed that House and Senate Republicans were not in total alignment during recent budget talks, and Thursday's actions proved it to her.
"They clearly weren't negotiating as a team, and that's why they couldn't respond to us when we had counteroffers," said Aguirre, D-Phoenix.
House leaders said they met many of Napolitano's demands for increased pay for corrections officers and teachers, and more money for universities. But they said they could not garner a majority from their 38 Republican members for all of Napolitano's spending wishes, nor for her insistence on just a one-year, 5 percent income tax cut.
Napolitano also wanted her request for $105 million to implement voluntary full-day kindergarten across the state to be paired with another $90 million for teacher pay raises and to help blunt rising pension costs for school employees. The House budget spends $105 million for full-day kindergarten, but allows school districts to spend the money elsewhere if they wish. The House added an additional $41 million to help teachers cope with retirement costs.
Napolitano spokeswoman Jeanine L'Ecuyer said Napolitano would not comment on the larger tax package until it reaches her desk, if it ever does. But L'Ecuyer said Napolitano had bent significantly during budget negotiations.
On Thursday, before the House and Senate took separate paths, a coalition of seven business groups endorsed the -tax cuts proposed by legislative leaders and urged Napolitano to support the two-year tax cut plan.
The groups include the National Association of Industrial and Office Properties, the Arizona Tax Research Association, the Arizona Association of Industries, the Arizona Retailers Association and the state, Tucson and Greater Phoenix chambers of commerce.
Not only do House and Senate Republican leaders differ sharply with Napolitano over tax cuts, education and other key parts of the budget, but they also apparently no longer agree with each other.
Senators upped the ante on tax cuts first. They voted for a 10 percent reduction to the state income tax and eliminated a state-levied property tax. The actions would send back $500 million to Arizona taxpayers in the 2006-07 budget year. The 10 percent income-tax cut would return about $120 to a person with a $50,000 salary, and the property tax cut would save about $100 a year for the owner of a $250,000 house.
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Napolitano has balked at a Republican plan for two years of tax cuts, so the Senate packed the entire plan into one year. Senate President Ken Bennett said new revenue numbers, which are expected to push the $1.2 billion surplus up to about $1.4 billion, make the larger tax cut affordable.
If the tax-cut package makes it to Napolitano's desk and she vetoes it, Bennett said Republicans would put the measure on the November ballot. "The governor said she would never ever ever do a multiyear tax cut so the only other option is to do it in one year," said Bennett, R-Prescott. "We're going to give her an opportunity to sign it. If she won't do that, we're going to go to the voters."
But that's a big if because House Speaker Jim Weiers went in a different direction late Thursday. The House gave preliminary approval to a two-year income- and property, tax cut as part of a $9.9 billion overall budget plan. The Senate did not vote on the rest of the budget and does not appear to have support for the plan coming from the House.
So while both houses took significant steps Thursday, an ultimate resolution to the budget standoff and a chaotic 140-day legislative session seems hazier than ever. Bennett said he is confident the House and Senate can work out their differences. But with the upcoming holiday weekend, and some members heading out of town, the earliest the budget impasse can be broken is Wednesday.
Senate Minority Leader Linda Aguirre said she sensed that House and Senate Republicans were not in total alignment during recent budget talks, and Thursday's actions proved it to her.
"They clearly weren't negotiating as a team, and that's why they couldn't respond to us when we had counteroffers," said Aguirre, D-Phoenix.
House leaders said they met many of Napolitano's demands for increased pay for corrections officers and teachers, and more money for universities. But they said they could not garner a majority from their 38 Republican members for all of Napolitano's spending wishes, nor for her insistence on just a one-year, 5 percent income tax cut.
Napolitano also wanted her request for $105 million to implement voluntary full-day kindergarten across the state to be paired with another $90 million for teacher pay raises and to help blunt rising pension costs for school employees. The House budget spends $105 million for full-day kindergarten, but allows school districts to spend the money elsewhere if they wish. The House added an additional $41 million to help teachers cope with retirement costs.
Napolitano spokeswoman Jeanine L'Ecuyer said Napolitano would not comment on the larger tax package until it reaches her desk, if it ever does. But L'Ecuyer said Napolitano had bent significantly during budget negotiations.
On Thursday, before the House and Senate took separate paths, a coalition of seven business groups endorsed the -tax cuts proposed by legislative leaders and urged Napolitano to support the two-year tax cut plan.
The groups include the National Association of Industrial and Office Properties, the Arizona Tax Research Association, the Arizona Association of Industries, the Arizona Retailers Association and the state, Tucson and Greater Phoenix chambers of commerce.