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Report: Gov’s sales tax plan may hit general fund

Arizona Gov. Jan Brewer listens during a bi-partisan meeting of governors hosted by President Barack Obama in the State Dining Room of the White House in Washington, Monday, Feb. 28, 2011. (AP Photo/Charles Dharapak)

A study by the Arizona Legislature’s independent financial analysts shows Gov. Jan Brewer’s proposed overhaul of the state’s sales tax collection system could cost the general fund nearly $140 million a year. A second new study by an outside group puts the number at $125 million.

Both studies raise questions about whether the state can risk the overhaul as currently proposed. The lawmaker carrying the bill in the House of Representatives said Thursday the questions raised by the Joint Legislative Budget Committee review may force revisions. Possibilities include a phase-in of the overhaul or “circuit-breaker” language that would kick in if revenues dropped precipitously.

The new reports come as lawmakers and Brewer’s representatives continue to negotiate with cities and towns concerned that the plan will hurt municipal revenues.

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