Senate sinks plan for business tax cuts - East Valley Tribune: News

Senate sinks plan for business tax cuts

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Posted: Monday, April 26, 2010 6:49 pm | Updated: 3:45 am, Sat Oct 8, 2011.

Senate Republicans drove the final nail Monday into a House-passed package of tax cuts for business.

Several members of the GOP caucus said they could not go along with a package to sharply cut corporate income taxes, phase out the state property tax and give other breaks to businesses. The plan, as approved earlier this year by the House, eventually would have slashed state revenues by $950 million a year.

A compromise offered by House Speaker Kirk Adams, R-Mesa, to trim the package to $600 million and delay the effective date of some of the cuts proved no more acceptable.

With Democrats balking, the failure of Senate Republicans to line up behind the package means it is dead — at least in its current form.

But Adams told Capitol Media Services Monday night he is not giving up. In fact, he and Burns were scheduled to meet late Monday to see what can be salvaged.

But coming up with a package that can get the necessary votes could prove difficult.

In some ways, the Senate Republican opposition is anticlimactic.

Last week Gov. Jan Brewer released her own tax-cut plan. But its pricetag, when fully implemented, was just $47 million.

The House-passed package includes a 28 percent cut in corporate income taxes and other changes in how companies figure what they owe the state. It also includes eliminating the state property tax.

One change that is causing some consternation among Senate Republicans would change how businesses are assessed for tax purposes to pay off voter-approved bonds and overrides. But in reducing what businesses pay, the change shifts the burden to homeowners, a move some find politically unacceptable.

Adams said the state has no choice but to cut taxes — and soon.

He called the amount of early tax cuts in his revised plan “incredibly modest considering the impact that bill will have on the economy.” He said the state needs this kind of financial shot in the arm, what with job losses since the recession began now topping 300,000.

But Senate President Bob Burns, R-Peoria, said businesses are less concerned with tax cuts and more concerned with seeing how Arizona plans to resolve its deficit.

In fact, the only reason the budget adopted for the coming year is “balanced” is that it’s built on the assumption voters will approve a temporary one-cent hike in sales taxes in May and two other ballot measure in November to divert other cash. If any — or all — fail, then the spending plan is out of whack.

Adams said some of the fault in rounding up support for his package of tax cuts belongs to Brewer.

“Without executive leadership on the economy, this bill or any other bill just simply isn’t going to happen and won’t be ultimately successful,” the speaker said. “My hope is the governor will understand the importance of addressing the job losses.”

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