The House of Representatives has given its approval to a budget deal that was hammered out with the governor earlier this week, but it is unknown when the Senate will take up the matter as Republican leaders are still one vote shy of being able to pass it.
The budget package includes a provision to allow voters to weigh in on a temporary increase in the sales tax in a special election this fall. That component was absent in a budget lawmakers approved July 1, which led to the bulk of it being vetoed by Gov. Jan Brewer, who has been pushing for the ballot referral since March.
For many Republicans, the decision to support even the ballot referral did not come easy.
“Folks, sometimes being down here is pure hell. And that’s what it is right now: pure hell,” said Rep. Ray Barnes, a Phoenix Republican who supported the budget package. He was among several lawmakers who said they would send the matter to the ballot, but actively oppose it this fall.
Glendale Republican Debbie Lesko said her vote to send the tax increase to the voters was not a reflection of her beliefs, but of the realities of the situation. Brewer has demonstrated she will not accept a budget that does not include a tax increase, there isn’t enough support for deeper spending cuts and inaction will lead to a government shutdown.
“It’s either take this deal, settle on a worse deal or run out of money and leave schools and everyone else in the lurch, and I just can’t do that,” she said.
Republican leaders were able to win support for the sales tax measure by coupling it with other provisions that were palatable to the fiscal conservatives, such as income tax cuts for businesses and individuals and a cap on state spending.
Not all Republicans were persuaded, however. Rep. Sam Crump said the tax cuts weren’t guaranteed and could be reversed by a simple majority vote any time before they take effect in 2012.
“Maybe we’ll end up with a sales tax hike and no tax cuts,” he said.
The sales tax increase will not be the only question posed to voters this fall if the Senate follows the House’s lead. Another component of the budget plan would ask voters to temporarily suspend a constitutional provision that prevents the Legislature from changing voter-approved programs and spending.
But it makes no sense to amend the constitution for only three years, said Rep. Andy Biggs, a Gilbert Republican.
“How absurd is that? We might as well be more like the French and adopt new constitutions willy nilly,” he said.
The bulk of the plan is similar to the budget that was vetoed earlier this month.
The budget was approved mostly along party lines, with Democrats voting against all 10 bills. Minority Leader David Lujan called the proposal “a recipe for economic disaster,” in part because of tax cuts that will lead to even less revenue during a time when the state has seen its tax collections plummet.
“I am ashamed that this is the best that we could come up with after seven months,” he said.
Assistant Minority Leader Kyrsten Sinema said the net effect of the sales tax increase – if it were to be approved by voters – and the tax cuts is a $75 million revenue increase over four years.
“If the governor thinks that’s enough money to protect funding for education, health care and the frail, I suggest she buy a new calculator, because that’s not much more than a nickel over the course of four budgets,” she said.
Another provision of the budget requires all state agencies to reduce the number of full time employees by five percent. That seems counterproductive, said Tucson Democrat Steve Farley, given the Republican arguments that tax cuts are needed to spur job creation.
“You have to actually fire people. You can’t somehow make it hurt less… I am stunned by the callousness of this,” he said.
The Senate, meanwhile, was unable to round up the 16 votes needed to approve the budget. Republican leaders had reportedly secured 15 votes.
Brewer met with Sen. Pamela Gorman, one of the Republican holdouts, for about 90 minutes in the early morning hours of July 31. The governor said the pair discussed governance philosophies and the state’s dire financial straits.
“I felt that she listened and I hope that she will (vote for it),” the governor said after the meeting. “We will get it done. We will get it done.”
The Senate forwarded the bills out of COW, and has decided to meet again today (July 31). The House is not scheduled to meet again until Aug. 4.