Gov. Jan Brewer said she believes the state can balance its budget next session without another tax hike, but she didn’t rule out the possibility.
“I am hoping that we do not,” Brewer said at a Sept. 30 press conference on the steps of the Executive Tower. “I would say today that I believe we can find other ways that we can figure out how we’re going to balance the budget.”
Brewer noted that she has already cut $2.2 billion from the budget since taking office in January 2009, and said she hopes her new Committee on Privatization and Efficiency will find ways to further streamline government and cut costs.
But the governor didn’t say where the money would come from if additional cuts are needed to eliminate Arizona’s growing deficit. The Joint Legislative Budget Committee on Sept. 29 announced that the current state budget could be out of balance by as much as $825 million. That number assumes the rejection of two Nov. 2 ballot propositions intended to sweep about $450 million from voter-approved funds into state coffers.
One possibility for finding money is that the state would fall back on the contingency plan the Legislature drafted to cut the budget if Proposition 100, a temporary one-cent sales tax, failed in its May special election. The plan called for nearly $900 million in cuts, about half of which would come from K-12 education.
Brewer’s comments were reminiscient of a December 2009 press conference in which Brewer, who had not yet been sworn in as governor, said a tax increase was on the table as a potential solution to Arizona’s budget crisis.
At the time, few observers believed that Brewer would push for a tax hike and Republican lawmakers who advocated a cuts-only approach to the budget deficit believed Brewer would be on the same page. Several months later, however, Brewer called a joint session of the Legislature and proposed a temporary, one-cent sales tax increase that eventually became Prop. 100.
Rather than focus on a potential tax increase, Brewer reiterated her commitment to cutting corporate and business taxes in the 2011 legislative session.
“We have got to be competitive with California and Nevada. I am particularly, personally looking at corporate income tax to get some kind of reduction there, and certainly the personal business tax to make us more competitive,” she said.
House Speaker Kirk Adams pushed a similar bill in 2010, but Brewer helped keep it on the sidelines after concerns were raised regarding how much the bill would cost the state in lost revenues. Many observers also said it would have put Brewer in an untenable position to cut business taxes while asking voters to pay a higher sales tax.
Brewer made the comments at a press conference where she announced that International Rectifier Corporation, a California-based semiconductor manufacturer, was expanding its operations in Arizona. The company, which already operates a facility in Mesa, is bringing 80 new high-wage jobs to a facility in Chandler.