Advocacy

Budget Update: Breakdown in the Senate

As of last night, the Senate continued having problems getting sixteen votes for the latest version of the budget plan. On the evening of July 29, the Senate and House adjourned until the next day. While media reports indicate that Senate Leadership will continue lobbying for support from their members, its unclear whether those negotitions will prove fruitful. Additional factors are also at play: House leadership, Senate leadership and Governor have agreed on the package as written and the House appears to have enough support to pass the measure in its current form. If it must be modified to be amenable to the Senate, the new proposal will have to again be reveiewed by the House. Also, attendance issues are at play in the Senate, as some members have vacation plans and other pressing commitments that may take them away from the Capitol. Its not yet clear how many will be able to adjust their plans and whether those leaving will further reduce support in that chamber.

The plan has also been modified to restructure the temporary sales tax increase to address the Governors desire that the one-cent sales tax be over the full three-year period. The new structure includes a one-cent increase for the first two years followed by a reduction to one-half cent in the third year and then a full repeal in the fourth year.

After a month of negotiations and reducing the remaining unsolved deficit to about $500 million, Democrats appear open to beginning negotiations anew, but only with their original budget as a starting point.

The current budget plans includes a number of provisions similar to the budget vetoed by Governor Brewer at the beginning of July, as well as a number of additional items:

A referral to the voters of a temporary one-cent sales tax increase for FY10 (as described above)
A referral that Prop 105 (voter-protected funding) be suspended for the next three years;
State spending will be frozen for the next three years;
Permanent repeal of the state equalization property tax; and,
Reducing corporate and personal income taxes beginning in FY12 by about $200 million each.

Look for CSA's detailed analysis of the budget later this week.

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