The House Ways and Means Committee last week voted to permanently repeal a suspended statewide property tax in a party-line vote that Democratic Gov. Janet Napolitano called “irresponsible.”
The repeal measure, HB 2220, could be heard by the full House this week.
Arizona’s county-equalization property tax levee was suspended for three years by the 2006 Legislature in a budget deal with the governor. The tax will automatically return in late 2009 unless the full Legislature approves the repeal bill supported by the Republican leaders in both chambers.
The Senate Finance Committee has endorsed an identical measure.
Legislative officials said the tax would generate about $250 million a year if it were imposed again. The suspended tax rate is the equivalent of about $76 a year on a $200,000 home.
Rep. Steve Farley, D-Tucson, and other Democrats on the committee voted against the bill. It was passed on to the House with a 6-to-3 vote.
The tax was suspended when state revenues exceeded expenditures, Farley said, but permanently repealing it would limit Arizona’s options in dealing with future revenue declines. The state is facing a $1 billion revenue shortfall this fiscal year and economists are predicting a fiscal 2009 shortfall of up to $1.7 billion.
The bill is sponsored by House Speaker Jim Weiers, R-Phoenix, who said the repeal would provide some relief for homeowners in a worsening economy.
“We can pay for the state’s needs without raising property taxes,” Weiers said. “As people fight to stay in their homes, the last thing they need is a tax increase.”