Arizona Governor’s Tax Hike Attempt Riles Lawmakers

Published October 22, 2009

Arizona Governor Jan Brewer (R) has come under intense political fire for proposing to raise the state’s sales tax during a recession.

Things have become so heated that Brewer sued the state legislature in June. She filed the suit after lawmakers passed and then withheld a budget bill that would not have raised the sales tax. Brewer wanted to veto the bill because it cut funding for many state government programs.

The Arizona Supreme Court stepped in and compelled the legislature to give Brewer the budget bill. She promptly vetoed it.

Byron Schlomach, director of the Center for Economic Prosperity at the Goldwater Institute in Phoenix, said he thinks Brewer has handled the state’s budget crisis poorly.

Vetoed Her Own Cuts

“[The governor] seems to want to have it both ways,” Schlomach said. “Her veto and rhetoric in June pandered to the spending crowd, and so does her insistence on a sales tax increase. At the same time she was willing to agree to some hefty long-term tax cuts to get that referral, and she actually vetoed her own agreed-to cuts, criticizing them as if she hadn+t agreed to them.

“Even so, spending has not been cut that much-less than 10 percent-yet her rhetoric makes it sound as if cuts have been truly draconian,” he added.

Arizona State Senate President Bob Burns (R-Peoria) said he believes the governor needs to engage with state legislators and Arizonans more fully to explain why she thinks a sales tax hike to close the state’s $4 billion budget deficit is a good idea.

Accused of Poll Watching

“The legislature had hoped to avoid negatively impacting our fragile economy with a record tax increase in the midst of a recession,” Burns said. “We have more questions [for the governor] than answers, but – again — we will continue to work towards a responsible budget for Arizonans.”

Schlomach believes the governor wants to raise taxes to “pander” to various special interests.

“I can only think that she proposed a sales tax increase as a way to pander to various spending interests in the state,” he said. “I know that part of this issue was polls. She appears to govern by the all-powerful poll, and her polling seemed to say that people were willing to pay more taxes in order to avoid cutting public education, and some other services.”

He added, “Her five-point plan for dealing with the budget was really a one-point plan: The sales tax increase. Everything else she mentioned was non-specific and/or was clearly intended as a long-term reform that could not possibly help in the current situation. . . . Remember that the governor of Arizona has a cabinet-style — almost imperial — governmental structure. Most of the state’s bureaucracy is answerable to the governor. Because of this, the governor can garner powerful and vocal allies based on her behavior and no one else’s.”

House Speaker Perplexed

The Speaker of the Arizona State House, Kirk Adams (R-Mesa), says he does not understand why the Republican governor is trying so hard to raise taxes.

“To expect citizens to fund additional government spending by imposing the largest property tax increase in Arizona’s history will not only exacerbate the current economic crisis but also will result in an additional burden to families,” he said.

Sen. Ron Gould (R-Lake Havasu City), who left California because of its high taxes, refuses to vote even for Governor Brewer’s compromise tax proposal, in which the voters of Arizona will decide in a state-wide election whether to raise their sales tax rate.

“The people that make millions of dollars off of taxpayer spending will dump millions of dollars into the campaign,” Gould said. “And me and my friends will be scrounging old pieces of plywood to paint ‘No New Taxes’ signs up to run our campaign.”

Political Ramifications

Schlomach says Brewer’s insistence on raising the sales tax has weakened her politically.

“I think if a credible candidate runs against her in the Republican primary, she will lose. Given the election is in a non-presidential election year and Republicans are going to be energized, that candidate will win the general election,” he said.

Brewer’s office declined multiple requests for comment.

Thomas Cheplick ([email protected]) writes from Cambridge, Massachusetts.