Gov. Jan Brewer has made it known to lawmakers that she wants them to delay a host of corporate tax cuts until 2013 when her temporary tax increase would expire, though she stopped short of saying she would veto the bill sponsored by House Speaker Kirk Adams.
“I’ve always said from the beginning that in order to achieve the kinds of tax cuts that would probably be good for the economy that it would have to be delayed,” Brewer said. ”I will review the bill and see exactly in what form it comes to me.”
Brewer noted that lawmakers are still working on H2250, which has not yet passed the Senate. When asked if the elimination of that overlap was necessary for her support, Brewer said, “We’ll see.”
Brewer’s Chief of Staff Eileen Klein was a bit more definitive in a recent interview with KPNX’s Brahm Resnik. During an April 16 taping for “Sunday Square Off,” Klein said there would be no overlap between the proposed tax cuts and the sales tax increase that will go into effect if Proposition 100 passes on May 18.
“Gov. Brewer has called for strategic reductions to help promote job growth, but in the long run, not in the short run. So our interest isn’t in taxing consumers to give tax reductions to other people,” Klein said.
Klein’s statement came on the heels of Senate President Bob Burns’ comments that Brewer may have issues with the tax cuts bill.
“I think it’s my understanding also that the Governor’s Office has some concerns about some of the provisions in there,” Burns said, though he said he’s not certain what those concerns are.
Sen. Steve Pierce, the majority whip, told the Arizona Capitol Times that the bill “isn’t complete yet.”
“Right now, we are still working on it,” Pierce said.
H2250 would phase in corporate tax cuts that would be fully implemented in 2018, but as it is currently written the state would cut those taxes by $60 million in the fiscal year 2012 and $80.9 million in 2013. The temporary one-cent sales tax increase, which goes before voters on May 18, is estimated to raise about $900 million a year.
If the tax cuts in H2250 are not delayed until May 2013, when the sales tax increase expires, it could put Brewer in a tough spot politically.
Democratic lawmakers and Attorney General Terry Goddard, the Democrats’ presumptive nominee for the 2010 governor’s race, have called for Brewer to give voters a guarantee that she will not sign a bill that will give tax cuts to companies while increasing the sales tax paid by all Arizonans. But a veto would almost certainly hurt Brewer in the Republican primary, where her three challengers have attacked her over her support of the temporary sales tax increase.