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Taxes vs. Spending Cuts: AZ Lawmakers Continue Budget Standoff

June 1, 2009

Phoenix, AZ – Arizona lawmakers have only 30 days to avoid a state government shutdown by passing a budget that fixes a $3 billion shortfall. Republican legislative leaders say the biggest deficit in state history must be erased with more spending cuts and no tax increase. But Republican Gov. Jan Brewer favors some sort of tax hike.

House Democratic leader David Lujan sides with the governor.

"I believe that we need to invest in education and invest in those programs that are going to make our state stronger. We have to look at the revenue side of things. We can't just cut our way to a solution."

A Democratic budget proposal unveiled last week hikes local property taxes and broadens the sales tax to include most services. Republican Appropriations Committee chairman John Kavanagh says this plan would "push Arizona from recession to depression and drive more families out of their homes and jobs."

Rep. Chad Campbell, a Democrat representing Phoenix, acknowledges the Democrats' proposal would boost local property taxes, but every dime would go to education.

"This would result in an increase of about $140 per year on a $150,000 home."

Democrats also would expand the sales tax to include services, while lowering the tax rate.

Lujan sees support for higher taxes if it means fewer cuts to programs that benefit children, seniors and the disabled.

"If you look at poll after poll taken recently, the people of Arizona have said they would be willing to pay a little bit more in their taxes if it will protect education and these important programs."

Although Republicans control the legislature, Lujan doubts the majority party has enough votes to pass a budget without some sort of tax increase.

"I think if they had the votes to pass, we would already have seen them come up for a vote on the floor. It's time we stop playing games and get serious about negotiating a budget."

Doug Ramsey, Public News Service - AZ