Home / budget / AZ Republicans can’t seem to agree — especially on taxes

AZ Republicans can’t seem to agree — especially on taxes

The day after Republican Gov. Jan Brewer released her budget proposal, a conservative senator excoriated her on his chamber’s floor, accusing her of lying to voters when she signed a no-tax pledge in 2006.

“Apparently, with this governor, it is only a pledge to get elected because, when push comes to shove, she is willing to institute a tax increase,” Sen. Ron Gould, a Republican from Lake Havasu City, said June 2.

Republican legislators objected to a tax increase when Brewer first broached the subject in March, and they remained just as resolute when Brewer made her budget plan public. They are so opposed, in fact, that they have scrambled for months to plug the budget gap with any and every solution they could think of.

But just seven months ago, those same Republican lawmakers were overjoyed that their party would be taking over the Governor’s Office. The announcement that then-Gov. Janet Napolitano, a popular Democrat with whom GOP lawmakers constantly feuded, was taking a job in the Obama administration meant Brewer, then Secretary of State, would become governor.

The news came just a few short weeks after the November elections had increased GOP majorities in both the House and Senate.

At that time, most Republicans thought addressing the state’s looming budget crisis would be a breeze with Brewer on the Ninth Floor, at least when compared to the struggles of solving budget deficits with Napolitano as governor.

But all that has changed. What had been a relatively silent battle between the lawmakers and the governor has erupted into a full-scale conflict. In reality, the hopes of a harmonious solution were dashed months ago, though few were willing to admit as much while the relationships among Republicans were just starting to go sour.

Now, at the pinnacle of acrimony, Brewer has announced her support for a plan created by her political allies to launch a media campaign pressuring lawmakers into supporting her budget proposal, which calls for more than $1 billion in tax increases.

In response, the House and Senate have worked feverishly to pass their own budget — one that didn’t contain a tax increase — to send a message to Brewer about the Legislature’s resolve and to force her to veto it.

Negotiations on a spending plan have never really materialized, and the periodic meetings between the two sides that had been taking place — meetings that, according to legislative leaders, have never yielded much information — have all but ceased.

Republicans are left scrambling to make sense of what has happened since they learned Brewer would become governor.

“I had every reason to believe that we would be on the same page and moving towards the same goal,” Senate Majority Whip Pamela Gorman said. “So, to say I was shocked and dismayed would be an understatement. I would liken it to being released from prison, only to walk across the street and get hit by a bus.”

Late last year, a list of chief priorities for GOP lawmakers included repealing a statewide property tax that had been suspended in 2006 and was set to come back this year if legislators didn’t permanently repeal it. Napolitano vetoed a repeal of the tax last year, but many assumed Brewer would be more amenable to ending the tax.

Brewer, though, signaled almost immediately that she might not be on the same page as her legislative counterparts. She said in a December press conference that all options — including a tax increase — were “on the table,” which was interpreted initially by some as a slip of the tongue. But it would come to be the company line from the Governor’s Office for the next few months.

By the time Brewer addressed a rare joint session of the Legislature on March 4, the alliance between was on shaky ground. Lawmakers had grown weary of her refusal to rule out a tax increase, the lack of communication with legislative leaders and what many characterized privately as a lack of leadership.

Fear of a push for higher taxes was evident at a press conference two days earlier when Senate Republican leaders had said a tax hike would be in “direct opposition” to GOP efforts to lower business taxes and stimulate Arizona’s economy. The media briefing was a preemptive warning to Brewer that calling for a tax increase would be met with resistance.

Brewer’s speech was light on details, but she did lay out the framework for a budget. Her five-point plan was met with applause by Republicans as she talked about cutting spending, ratcheting up savings to cope with future deficits and reforming the state’s tax code. But that quickly came to a screeching halt on the final point of her speech.

It was an attempt by Brewer to align herself with Arizonans, not a political party, as she offered a compromise designed to bring the state out of a financial crisis while looking ahead to statewide elections in 2010.

The governor proposed tax reforms and some spending cuts that Republicans have been championing. But she also called for the temporary tax increase, which was immediately condemned by most of her GOP colleagues.

There is no silver bullet, she told lawmakers, and no single approach to repairing the structural imbalance in the state’s budget that will erase the deficit in the upcoming year or the financial problems that are anticipated for years to come.

“We cannot balance this budget on cuts alone, nor on taxes alone, nor on federal stimulus dollars alone,” she said, explaining the need to protect spending for education and social programs. “We cannot be penny-wise and pound-foolish.”

Minutes after the speech ended, Republican leaders stood in a Senate hearing room and blasted Brewer’s remarks. There was no way a proposal to increase taxes, either directly or by a vote of the people, would win support at the Legislature, they said.

“Read my lips: no new taxes. I’m not voting for any taxes and I don’t think that any of the caucus members — or a majority of Republicans — are going to vote for new taxes,” said Senate Majority Leader Chuck Gray.

That “reactionary, emotional” press conference signaled the end of any hope of a working relationship Republicans may have had with Brewer, said lobbyist Mitch Menlove. The governor has a reputation for holding a grudge, he said, and the statements to the media were cause for resentment.

“If you tick her off, she does not forget,” Menlove said. “I think she wrote them off right there. She said, ‘Screw those guys. I’m going to do it my way.’”

By that time, Brewer had laid the foundation to push her tax increase proposal. Immediately after her speech, Brewer was joined by Arizona Republican Party Chairman Randy Pullen, who said the party backed a tax increase to balance the budget. And her longtime political consultant, HighGround’s Chuck Coughlin, had organized a coalition of business groups that commissioned a poll showing strong support for a sales tax increase in order to support education.

Late last month, that business coalition, Building a Better Arizona 2012, designed a multi-platform campaign to publicly pressure lawmakers to support Brewer’s budget. Her budget hadn’t yet been released, but was ultimately unveiled June 1.

Many Republican lawmakers, who made up the majority of targeted legislators identified in a confidential memo that leaked to the press, took personal offense at the campaign. Consensus opinion among Capitol observers was that Brewer was openly attacking the Legislature.

Former Arizona Republican Party Chairman Mike Hellon said one word came to his mind when he learned of the plan to undermine lawmakers in their own districts: “Unbelievable.”

Hellon, who managed Brewer’s first legislative campaign in 1982, said he considered a political party’s might and ability to be dependent on four factors: a Congressional delegation, legislators, a governor and the grassroots support of district and precinct committee people.

“In a perfect world you have all of these entities at least moving in the same general direction,” he said. “What we have now, frankly, is open warfare on all sides. I think that is exceedingly harmful to the party.”

If push comes to shove, Hellon said most of the targeted lawmakers will adopt the defiant bring-it-on invitation that has been issued by House Appropriations Committee Chairman John Kavanagh, who publicly taunted Coughlin’s group to spend all of its money in his Fountain Hills and Scottsdale district.

“If the governor wants to go around the elected legislators, to their constituents, and argue for a tax increase, I think the general consensus is, ‘Go for it,’” said Hellon. “They’re (lawmakers) willing to wage that fight, and I think they are going to win it.”

Tension is natural between the Legislature and the Governor’s Office. The unique problems facing policymakers this year has exacerbated the acrimony that is built into the checks-and-balances built into Arizona’s government.

The Governor’s Office is responsible for actually managing state government, said Mike Haener, who served as Napolitano’s chief lobbyist.

“Legislators don’t necessarily see that,” he said.

While most Republican lawmakers attributed the strife during the past six years to the opposing philosophical views between them and Napolitano, Haener said the reality is that the Legislature has been controlled by Republicans for decades, and there have always been battles with the governor, even when Republicans such as Fife Symington and Jane Hull occupied the executive branch.

Throw in a historic budget problem, and this is what you get, said Tom Farley, CEO of the Arizona Association of Realtors.

“I really think what has turned the notches up here is the size of the budget deficit,” he said. “The $3 billion-to-$4 billion deficit can test the best of minds and patience.”

But Republican consultant Chris Baker believes the problems run deeper than just natural tensions and the size of the budget deficit.

“Both sides had expectations that were totally out of whack with reality,” he said. “It’s a recipe for disaster. It’s a recipe for conflict.”

On top of that, both sides have different goals and wildly differing constituencies. While Brewer doesn’t want to be seen as the governor who slashed funding for education, health care and social services, the Republican lawmakers don’t want to be tarred for raising taxes.

“She’s playing to the general election in 2010. They’re playing to Republican primary voters,” Baker said.

Brewer, in the estimation of many observers, expected GOP lawmakers to follow her lead and support her initiatives by virtue of her being the governor and the de facto head of the Republican Party. Some said she may have felt as though she had been shown up by Republican legislators after their vitriolic press conference.

Likewise, Republican lawmakers believed they would be included in the governor’s plans. They envisioned a cooperative process in which they would work hand-in-hand with Brewer to craft a budget. But that collaboration was never forthcoming, and GOP leaders were rarely able to get any sense of what Brewer wanted, much less specific details, which led to a feeling they were being slighted.

In reality, the type of relationship both sides wanted was unrealistic, Baker said. Brewer’s job as chief of state requires she view things differently than legislators do.

“She is the governor. She has her own concerns and political goals, and they don’t always line up (with the Legislature’s),” he said.

It was equally impractical for the governor to expect Republican lawmakers would fall in line behind a tax increase, especially given the conservative makeup of the House and Senate GOP caucuses. Plus, Brewer didn’t have much political capital, Baker said.

“That was never going to happen…because she was an appointed governor,” he said. “She had no mandate whatsoever.”

Many Republican lawmakers consider the attempts by Brewer and her staff to push for her tax increase as strong-arm tactics. Among those moves, Gorman said, is a general push-back against legislators from the Ninth Floor. She cited repeated assurances from Brewer and her staff that they were all working together, followed shortly by press releases that “threw the Legislature under the bus.”

The perception is that Brewer has worked overtime to undercut the budget ideas Republicans came up with that were designed to avoid a tax increase.

“It just seems like the spirit of cooperation is not there, and there is no other reason that we can see, other than by (the governor) not cooperating and limiting the options as times goes on, then you are left with her tax increase, or so she believes,” Gorman said.

Paul Senseman, a spokesman for Brewer, said the rift between the governor and Republican lawmakers is not that deep. No major disagreements have come out of four of five points of Brewer’s proposed budget plan.

The head-butting is essentially over $1 billion, which amounts to about

10 percent of the estimated budget, and it also signals that Brewer and Republican lawmakers fully agree with 90 percent of budget issues, he said.

“That, to the governor, is, I think consistent with her approach for the entire party in that it’s a big tent,” Senseman said. “There is room in that Republican Party tent for a lot of differing viewpoints. But one thing that she has been consistent on is her responsibility as governor. She has to operate the state, and she has to operate the state for people of all parties and non-parties. That’s really the only sticking point that we see is this billion dollars worth of difference.”

If Brewer expects voters to help her overcome that difference by approving a ballot referendum asking for a tax increase, the governor may be in rude awakening, Hellon said.

“I can’t envision the voters of Arizona approving a tax increase,” he said. “I just don’t think it’s in the cards. If you go there and lose, then where are you? In my opinion, that is a political risk not worth taking. If I had to bet, I think the Legislature is going to prevail in this. But who knows?”

Meanwhile, Democrats were watching smugly from the sidelines as the relationship deteriorated.

“After all the effort they put on blaming Napolitano for everything, after all the effort they put into fighting with Napolitano, lo and behold, it wasn’t about a Democratic governor,” said Senate Assistant Minority Leader Rebecca Rios. “This was just in their nature. They are now fighting with their own governor.”

The fallout of the fighting remains to be seen, but the state of affairs is abysmal: both sides seem unwilling to budge from their positions on a tax increase, and both have gone to extreme lengths to embarrass their opposition. A budget likely will be in place by the June 30 constitutional deadline, but the extent to which Republican lawmakers will be involved isn’t known.

“The collateral damage, it’s probably going to irreparably damage the relationship with Republican leadership,” Baker said. “And I think it’s only going to get worse before it gets better.”

That could mean Brewer has to court Democratic lawmakers for votes, a move that would certainly require her to make large concessions that would raise Republican ire even more.

And that’s to say nothing of what next year will be like, when policymakers will once again be face to face with a massive budget deficit, and any solutions will have to overcome the bad blood generated this year.

“The sad thing about it is it didn’t have to be this way,” Baker said.

Reporters Luige del Puerto, Christian Palmer and Jeremy Duda contributed to this article.

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