Wednesday, 12 January 2000
By Howard Fischer
Capitol Media Services
PHOENIX - State lawmakers took preliminary steps yesterday to cut taxes - even though no one is sure whether there's enough money in the budget to do it.
Members of the House Ways and Means Committee voted for a 5.2
percent reduction in individual income taxes. If that becomes
law it will cost the state more than $100 million - money even
the bill's sponsor concedes the state lacks.
That didn't stop the same committee from then voting to make every
Feb. 14 a sales tax holiday, with no state or local taxes to be
collected on any item sold that day. That bill would cost the
state another $10 million.
Committee members also voted to amend the state constitution,
giving voters the power to override tax increases approved by
cities, counties and the state.
Sponsor Bill McGibbon, R-Green Valley, said that plan is designed
to give voters a voice where they lack one now. He pointed out
that a proposed referendum to kill a property tax increase in
Pima County fizzled after county officials said such a move is
now illegal.
The tax-cut plans come as legislators attempt to figure out how
to balance the budget for the coming year.
Gov. Jane Hull said it can be done - assuming the state borrows
$125 million to finance needed school repairs and renovations.
A legislative budget forecast unveiled yesterday says borrowing
isn't needed because more tax money will be collected this coming
fiscal year than anticipated.
Even with that, legislative analysts predict there will be only
$36.2 million to divide up once lawmakers fund all necessary programs.
McGibbon, who also is sponsoring the income-tax cut, said he doesn't
know if that is the real number. Whatever it is, he said, taxpayers
deserve a break.
Under his plan the average taxpayer would save $53 a year.
So eager were lawmakers to approve his plan that they refused
to even consider an alternative that would have cut taxes by only
half that much.
Any plan to use excess proceeds for a tax cut will run into opposition
from Hull. She told senators yesterday that any extra money they
have should go toward funding education needs.
The sales tax holiday is also McGibbon's idea. He chose the date
because that is the day in 1912 that Arizona became a state.
``We're going to rival the day after Thanksgiving for shopping
if this is enacted,'' he said, as Arizonans take advantage of
the fact they would not have to pay the 5 percent state sales
tax and any local sales taxes.
The timing worried Rep. Barbara Leff, R-Phoenix, who noted that
Feb. 14 also is Valentine's Day. She said shoppers might save
their expensive jewelry purchases for that day, costing the state
even more revenues.
Rep. Marilyn Jarrett, R-Mesa, agreed. She said someone buying
a $150,000 motor home is bound to wait until the tax holiday to
save $7,500 in state taxes.
The tax referendum measure is aimed largely at Pima County, where
supervisors just enacted a primary property tax increase of 39
cents per $100 of assessed valuation.
``This merely gives the taxpayers a remedy to override a tax increase
they feel is inappropriate,'' McGibbon said.
The concept alarmed Deputy Pima County Administrator Martin Willett.
He said a petition drive could paralyze the county, forcing it
to halt services and lay off workers even if voters subsequently
ratify the higher taxes.
That is because a successful referendum drive - in this case,
one that has the signatures of 20 percent of voters - bars a measure
from taking effect until the next election. And that might not
take place for more than a year, long after the city or county's
fiscal year has ended.
``Most of our services are mandated,'' said Willett. ``Do you
lay off cops? Shut down your hospital for three months?''
McGibbon said that was not his intent. He said he simply wants
voters to have an opportunity to rescind tax increases after they
have been enacted.
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Find information on pending bills, state legislators, and Arizona
laws at the Arizona Legislative Information System.
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