Arizona Gov. Jan Brewer outlined a five-step budget recovery program last week that included levying temporary taxes to generate $1 billion a year for up to three years and reducing general fund spending by $1 billion in fiscal 2010.
Addressing an unusual joint session of the state Legislature, Brewer challenged the lawmakers to work with her administration to resolve a $3 billion budget shortfall in the next fiscal year, which begins July 1. Without long-term action, she said, the deficit could total $13 billion by fiscal 2014.
“We are here to apply the accumulated lessons of our lives and our faith and to summon the courage to act,” Brewer said. “Now is the time.”
The governor said state revenues are not expected to improve until 2012 at the earliest.
She did not specify how to raise taxes temporarily to generate the additional $1 billion, except to say it could either come about through legislative action or a vote by the public at a special election.
Other parts of the governor’s proposals are budget reforms that include raising the budget stabilization fund from the current 7% of general fund expenditures to 14%, amending the 1998 Voter Protection Act to give legislators the ability to reduce or shift funding from voter-approved programs, and unspecified changes to the state tax code to attract investments and spur job growth.
“This is a multi-year problem, and these five proposals focus our state on the long term,” Brewer said. “We must stop considering only a 2010 budget deal, and we must start considering a multi-year fix that secures our future.”
She told lawmakers not to send her spending bills that did not comply with the five-point program.
Senate Majority Leader Chuck Gray, R-Mesa, said Republicans in the Legislature are not likely to support Brewer’s tax hike proposal. Brewer is a Republican who six weeks ago replaced Democrat Janet Napolitano after she resigned to become secretary of the Department of Homeland Security in the Obama administration.
“I’m not voting for any taxes, and I don’t think that any of the caucus members or the majority of the Republicans are going to vote for new taxes,” Gray said.
Brewer said GOP lawmakers would relent in their opposition to raising taxes when they looked at budget and revenue projections, but Gray disputed that.
“I want to know where she is getting her facts,” he said. “Senate Republicans know that tax increases are bad for the economy. That is our fact.”