DALLAS — Arizona Gov. Janet Napolitano asked lawmakers to put on the ballot a transportation tax proposal that would finance highway and transit projects statewide. She made the request in her wide-ranging state of the state address yesterday, the first day of the 2008 Arizona Legislature.

The Democratic governor acknowledged the pressures created by a budget deficit estimated at close to $1 billion for fiscal 2008 and up to $1.8 billion for fiscal 2009, but said the state’s current economic downturn is only a temporary problem.

“We must remember that Arizonans years from now won’t ask how we balanced the budget,” Napolitano said yesterday afternoon in her sixth session-opening speech. “Instead, they’ll ask how we improved education, ensured their safety, built a prosperous economy, and planned for explosive growth.”

Napolitano repeated her call for the state to issue $393 million of long-term debt to finance school construction during fiscal 2008, and to take $264 million from the state’s $685 million budget stabilization fund to help balance the fiscal 2008 budget.

The governor did not specify how to finance her transportation construction program but instead urged legislators to hold hearings on how to create transportation corridors to link communities throughout the state. She suggested that voters be presented with a transportation plan referendum at November elections in 2008 or 2009.

“It will not be cheap, but we are already lagging, and to continue to wait — to play catch-up — as opposed to planning ahead will only make the whole thing cost more,” she said. “By this spring, the critical studies will be near enough to completion for you to act.”

State highway officials have estimated the state’s transportation infrastructure needs over the next 20 years at $20 billion. Each one-cent increase in the state’s 18 cents per gallon gasoline tax and 26 cents per gallon diesel tax would generate $37 million a year, while a one-cent increase in the state’s 5.6% sales tax would bring in almost $1 billion annually.

Napolitano said any statewide transportation plan must include significant public transit projects “because we simply cannot out-freeway the problem. Imagine expanded freeways, more local transit, plus a Tucson-to-Phoenix rail line, and you’ll see how we need to write our transportation chapter.”

She called for a “transportation infrastructure second to none” to serve a population of 10 million to 12 million, up from the current estimates of 6.2 million residents.

“Arizonans need relief from the ‘time tax,’ ” she said. “People need to get from work to home, to their places of worship, to the store, and to school to pick up their children, without constantly having to sit, breathing bad air, stuck in a traffic jam.”

To help resolve the subprime mortgage problem in the state, Napolitano said she has been meeting with home mortgage lenders to help residents having problems meeting their monthly payments.

“We have agreed that buyers should have the chance to work out their loans with lenders and to stay in their homes, yet, they must still meet their obligations to the businesses that lent them money,” she said. “Now, it’s our job to keep this mess from happening again.”

To avoid future situations, she asked legislators to pass the Arizona Home Equity Theft Protection Act, which would license equity purchasers.

“There are some in this category who prey on vulnerable homeowners and use deceptive practices to cheat them out of their homes,” she said. “Let’s pass the bill and put the bad guys out of work.”

Napolitano also called for state licensing of mortgage loan officers.

“Once they’re licensed, that license can be removed for behavior that violates the law or the ethical rules of the profession,” she said. “Our state’s lenders want high standards in their field, so let’s work with them and get this done this year.”

The governor said she would deliver a proposed budget for fiscal 2009 next week that will be balanced without the need for new taxes.


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