Arizona Legislature Nixes Sales Tax Increase

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Arizona Legislature Nixes Sales Tax Increase

By Hank Behar - 08/14/2009
NEW YORK -- Facing a $3.4 billion budget deficit for fiscal 2010, Arizona Governor Jan Brewer pointed to a 1-cent sales tax as the cornerstone of her rescue package—but it was not to be. The legislature failed to include it in its final deliberations on the budget.

Not that it would have had a good chance to make it to the finish line, since the governor, facing the legislature’s reluctance to adopt it, proposed having the tax increase placed on the ballot in November. There its chances, in the present environment, could have only been characterized as slim, if not anorexic.

The proposal, however, isn’t completely off the table. When the budget was submitted to the governor, she signed only a portion of it, vetoing key parts, largely because it didn’t include the 1-cent sales tax. So in July she called lawmakers into special session to work out a budget compromise.

As of press time, the legislature is wrangling with alternate means of raising revenues, among them applying the existing sales tax to more items, and allowing horse and dog tracks to offer casino-style gambling.