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Changes discussed in House as budget deadline looms

With a shutdown of all non-essential state services only hours away, Republican leaders are still wondering where they will find support among the rank-and-file for a compromise budget agreement reached last week with the governor.

“We’re still a few votes short in terms of the governor’s (sales tax increase) referral to the ballot, so we’ll keep working our members,” House Speaker Kirk Adams said just after 9 a.m. this morning. “We’ll be doing that all day.”

His comments followed the second day in which GOP leaders aborted a push to get the budget bills out because of a lack of support among Republican lawmakers. Much of the resistance has been to the one component that Gov. Jan Brewer has identified as critical to the package: a special election this fall that would allow voters to decide whether to implement a temporary 1-cent sales tax increase.

Most Republican lawmakers bristled when Brewer raised the issue in a March speech and fiscal conservatives have continued to voice their opposition to the move, which they say would ultimately slow Arizona’s economic recovery.

Also, there are concerns regarding a proposal to modify flat-income-tax system that was included in the budget package at the last minute. Adams, who has championed the idea, said there were some problems with the proposal that need to be “ironed out” and would likely be changed.

He said possible changes include accelerating the implementation date, which right now is slated for 2012, and clarifying that the tax would be based on a person’s federally adjusted income.

House Majority Leader David Lujan said he heard that a move was afoot to remove the flat-tax component of the budget in favor of a set of fiscally conservative spending guidelines known as the Taxpayer Bill of Rights, or TABOR.

TABOR’S provisions include limiting year-over-year state revenue collections to a rate that equals inflation-plus-population-growth, unless larger increases are approved by voters.

Adams, though, said no such change was in the works.

House Assistant Minority Leader Kyrsten Sinema said she believes Republicans will simply tack the TABOR provisions to the budget, in addition to the flat-income tax proposal.

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