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In the August 14, 2009 CSA Update:
A number of Republicans, including Senator Pam Gorman (R-6) and Senator Ron Gould (R-3) continue to oppose the tax package, and Senator Jim Waring (R-7) also voted no on the plan. Talk around the Capitol indicated that leadership began asking Democrats for support on Tuesday. Senator Richard Miranda (D-13) reportedly asked for two items: the removal of a referral to unlock voter-protected spending and an assurance that revenue from the proposed tax increase would be used for education and health care, not to backfill income tax cuts. Senate President Burns agreed to offer the first item as a floor amendment but would not agree to the tax restrictions. Without that agreement, Miranda continued to oppose the package and was not present for the floor vote. He explained on Thursday that he was visiting an ill brother and could not return in time. On Thursday, Senator Waring, having voted on the prevailing side of the failed tax increase bill, moved to reconsider it. That reconsideration was approved, although Waring explained that he had not changed his mind on the package but was moving the reconsideration as a favor to President Burns so he could "continue negotiations." If it were to pass, the earliest a special election to approve a tax increase could be held is December 8. The Joint Legislative Budget Committee has reported that June sales tax receipts continued to decline, with "revenues down 14.4% compared to last June, and were $58.1 million below the budget forecast. The June decline marked the 17th consecutive month of year-over-year reductions, and the 8th consecutive month of double digit declines compared to the previous year."
The House and Senate are scheduled to reconvene on Monday. With No Action, Equalization Property Tax Returns With the Senate unable to reach an agreement on broader tax policy, the legislature missed an opportunity to reform the state equalization property tax rate. A provision suspending the tax expired this year, meaning that without additional legislative action, the tax would automatically return. The statutory deadline for counties to adopt property tax rates is the second Monday in August (August 16 this year). The statewide property tax will cost an additional $33 per $100,000 in assessed value or $363 for a $500,000 business. Republicans throughout the session have stressed the importance of repealing the tax as a counter-recessionary measure, while Democrats have insisted the state needs the tax revenue to fund essential programs. Governor Brewer has proposed a phase out of the tax over a number of years. Legislative staff is reportedly investigating the prospect of a refund if the equalization tax is repealed at a later date.
JLBC: Large Deficits Loom in 2012, Tax Increase or Not
If the legislative plan negotiated this week were enacted, the proposed tax increase would begin at 1 cent for 2 years and then reduce to 1/2 cent for the final year. This would leave the state with a positive cash balance of approximately $367 million in FY10, before running deficits of $892 million in FY11, $2.2 billion in FY12, and $2.7 billion in FY13. Without the tax increase, the state would begin with a positive balance of $624,900 in FY10 and deficits of $ 1.9 billion in FY11, $3.0 billion in FY12, and $3.1 billion in FY13. None of those estimates account for a projected unsolved shortfall of $200 to $300 million in FY09 which "when finally determined, will carry forward into FY10." After visiting Apache and Navajo counties last week, CSA will head to western Arizona with visits to Yuma and La Paz next week.
 Additional dates include:
August 17, 2009 -
August 19, 2009 - Pinal County
August 25, 2009 -
August 26, 2009 -
September 1, 2009- Cochise County
September 15, 2009- Graham and Greenlee Counties
September 21, 2009- Yavapai County
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After weeks of negotiation, the Senate returned a series of House budget bills passed on a close, party-line vote on Wednesday. Despite long talks with both Republicans and Democrats, Senate leadership was unable to muster enough support for a tax reform package, including a sales tax increase and income tax reductions. Without those revisions, the package is essentially the same package vetoed by Brewer on July 1. 
A report from the Joint Legislative Budget Committee on the state's balance sheet through 2013 indicates more bad budget news for |
County Supervisors Association of Arizona
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