DALLAS - Arizona lawmakers tried to hurry a budget compromise through the Legislature before today's deadline, but legislative leaders and Gov. Jan Brewer prepared for a partial shutdown of the government in case the measure does not pass.
A full 25 days after all nine budget bills were approved, GOPHouse and Senate leaders appeared uncertain about making changes in the spending plan along the lines of a compromise with Brewer reached on Saturday.
Citing a growing crisis, Brewer, also a Republican, sued Senate President Bob Burns, R-Peoria, and House Speaker Kirk Adams, R-Mesa, two weeks ago in the state Supreme Court seeking an order that they send her the budget immediately. The court ruled that the leaders had violated the constitution by withholding the budget but that the court could not do anything about it.
To keep the government's critical functions operating temporarily, the Republican leaders drafted emergency legislation that would serve in place of a budget when the new fiscal year starts tomorrow.
The conflict centered on how deeply to cut into government services and on withholding money from local governments to cover a $3 billion state budget gap. Brewer wanted a $1 billion sales tax increase over three years while lawmakers refused that option.
In the compromise, the sales tax increase would be submitted to voters. In return, the state would replace its progressive income tax with a flat tax beginning in 2012.
The flat tax would create one rate between 2.6% and 3%. Rates are currently between 2.59% and 4.54%. The plan could include cutting the state's corporate income tax rate of 6.97%.
A vote on the temporary sales tax increase of 1 percentage point could come this year or next, lawmakers indicated.
As a percentage of its total budget, Arizona has the largest revenue shortfall of any state except California. Despite repeated spending cuts, revenues continue to lag projections, particularly sales taxes.
After the April 15 tax filing deadline, the state had to issue warrants to borrow money. In a normal year, the state would be flush with cash, but tax collections fell far short of expectations.
Under the plans for a partial shutdown of the government, half of the Highway Patrol staff would be furloughed, suspending routine road maintenance and canceling visitation at state prisons.
Brewer spokesman Paul Senseman said constitutionally mandated critical services such as prison operations would continue on a very limited basis.
For Brewer, who took over the governor's office after then-Gov. Janet Napolitano joined President Obama's cabinet, the showdown with her own party represents a shaky start to her administration. While she has sought to blame the state's problems on her Democratic predecessor, the GOP legislative leaders have resisted her attempts to lead the recovery from the deep recession.
