Governor Napolitano says tax cuts under Governor Fife Symington’s administration were unwise, but would not otherwise provide a glimpse into whether her new budget will propose any tax relief.
At a briefing with reporters Nov. 16, Ms. Napolitano referred to the $1 billion budget deficit she faced in her first year in office, blaming, in part, tax cuts of $1.5 billion and a lowering of the top income tax rate to 5.2 percent from 8.7 percent under the Symington administration.
“I think we have to manage our affairs so we never return to those circumstances because that was pretty tough,” she said. “There were some very bad decisions in the ’90s with how to manage the long-term fiscal health of the state and where to invest to make sure we grow and grow in a wise way,” she said.
Rep. Russell Pearce, R-18, told Arizona Capitol Times he would like to see a return to the Symington tax cut era, with emphasis on a reduction in state personal income tax. Tax cut talk comes with the news that state revenues are $750 million above projections.
“I’m not going to speculate because there’s a lot of loose talk around the Capitol now,” Ms. Napolitano said when asked if she will propose new tax cuts.
The Legislature this year reduced business property taxes, gave tax breaks to manufacturers and computer-chip makers and provided tax incentives for the film industry, all of which were signed by the governor.
Ms. Napolitano said that work on her new budget includes trying to avoid fiscal maneuvers such as delayed payments to balance the budget.
“One of the things we are looking at is how we cross the fiscal bridges that we had to use to get out of that $1 billion hole,” she said.