Historic tax cut proposal holding up budget process in Arizona

Proposal could lead to huge budget deficits for man of the state’s biggest cities
Published: Jun. 9, 2021 at 6:42 PM MST|Updated: Jun. 9, 2021 at 7:05 PM MST
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TUCSON, Ariz. (KOLD News 13) - The Arizona legislature has not been able to reach an agreement on a $12.8 billion budget and the deadline is ticking.

At issue is a $1.9 billion tax cut supported by Gov. Doug Ducey and all but one of the Republican majority in the House and Senate.

With both chambers one vote apart, 31-29 in the House and 16-14 in the Senate, that one vote in each is enough to keep the budget from passing.

Representative David Cook from Globe is the lone GOP House holdout. He said he believes the recurring tax cut is too large since it’s funded in part by federal coronavirus relief money.

The Democrats can only sit and watch because they have been sidelined by the Republicans during the budget process.

“Because the Republican majority has stated publicly that they do not intend to work with Democrats, all the voters who sent up Democratic legislators to look after their interests, their voices have been cut out of the process,” said Domingo DeGrazia, from District 10.

But because the GOP has not been able to reach an agreement, it’s possible the Democrats could play a role in the budget process for the first time in years, although that’s still an outside chance.

“Based on the history of the legislature, I don’t think that option will happen,” said Randy Freise, a representative from District 9. “But it becomes more viable, a more real option as it becomes clear that they can’t pass the budget as it currently is.”

The lawmakers have until June 30 to pass a budget according to the state constitution, so there is still time to work out whatever changes are needed to get a budget passed.

“I hope the Republicans are holding out to spare the cities and towns these large budget cuts,” said Freise, a member of the House Appropriations Committee.

The cities and towns depend on state shared revenues to pay for services like police and fire but with the largest tax cut in state history, it’s possible they may be cut short.

“Economists looked at this and advised us to be cautious with our revenue adjustments,” he said. “This is not cautious, this is not caution, this is reckless.”

DeGrazia feels the same especially because most of the tax cuts will go to the wealthiest Arizona residents.

Voters passed Proposition 208 in 2020 which imposes a surcharge on individuals making more than $250,000 or couples making in excess of $500,000 annually to pay for teachers, schools and education.

“The voters, by an overwhelming margin, say hey want Prop 208 and they want this to go into effect to support our schools,” DeGrazia said. “So it’s disheartening to see any budget moves that would overturn the will of the voters.”

The lawmakers are in recess until Thursday, but there’s been no indication when they might come back.

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