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AZ Legislature OK $1.9B Income Tax Cut 06/25 06:03

   The Arizona House on Thursday approved a $1.9 billion income tax cut that 
mainly benefits the wealthy as majority Republicans pushed through key pieces 
of a state budget plan opposed by Democrats and packed with a conservative wish 
list of unrelated policy changes.

   PHOENIX (AP) -- The Arizona House on Thursday approved a $1.9 billion income 
tax cut that mainly benefits the wealthy as majority Republicans pushed through 
key pieces of a state budget plan opposed by Democrats and packed with a 
conservative wish list of unrelated policy changes.

   The House joined the Senate in approving the tax cuts and another bill 
shielding high-earning taxpayers from the effects of a new 3.5% tax surcharge 
voters approved in November to boost education funding.

   In all, nine of the 11 bills that make up the $12.8 billion budget were 
ready to send to Republican Gov. Doug Ducey, who negotiated the spending plan 
and will sign it. The 31-29 party-line votes came after majority Republicans, 
angered that House Democrats failed to show up to work earlier in the week, 
limited debate on the budget plan.

   House Speaker Rusty Bowers announced that the GOP would change the rules and 
allow only 30 minutes of debate on each bill. Such debate typically takes up 
hours on each measure.

   "It is clear, was clear then, by the absence of an entire caucus ... that 
procedural obstruction and delay have been instituted in lieu of civility," 
Bowers said.

   Republicans say the state is flush with cash, and the tax cut is needed to 
keep Arizona competitive and prevent the tax increase contained in Proposition 
208, which added the new tax on high-earning Arizonans. They argued the tax cut 
will help businesses create jobs and that will help the middle class.

   "I think what we do have here is a historic tax cut that will result in 
significant positive impact for everyone, everyone in the state," said Peoria 
Rep. Ben Toma, the majority leader and a key architect of the tax cuts. "It's a 
tax cut that helps small businesses, and it helps us be more competitive as a 
state relative to our neighbors."

   Democrats vehemently oppose the tax cuts, saying without them the state 
could finally fully fund schools and social programs that were never completely 
restored after the Great Recession.

   "This is the time to make meaningful investments in our state's future 
instead of this massive giveaway to folks who are really not struggling," 
Democratic Rep. Kelli Butler of Paradise Valley said. "And there are plenty in 
Arizona who are really struggling."

   The $1.9 billion in tax cuts will be phased in when revenue targets are met, 
starting at $1.3 billion this year. When fully phased in, the plan would lower 
tax rates for most taxpayers to 2.5%, down from a range of 2.59% to 4.5%. 
Wealthy taxpayers would, in effect, be spared from the tax hike approved by 
voters last year to pay for schools.

   The average Arizonan earning between $75,000 and $100,000 will save $231 a 
year in state income taxes, while the average taxpayer earning between $500,000 
and $1 million a year will save more than $12,000, according to the 
Legislature's budget analysts.

   Ducey hailed the passage of the tax cut bill and the provision shielding 
individuals earning over $250,000 or couples making more than $500,000 from the 
new Proposition 208 tax. The estimated $827 million a year in new money will 
still go to schools, but it will come out of the general fund, preventing the 
state from funding other programs.

   "Every Arizonan -- no matter how much they make -- wins with this 
legislation. They will get to keep more of the money they earn under this tax 
plan," Ducey said. "It will protect small businesses from a devastating 77% tax 
increase, it ensures working families and all Arizona taxpayers get to spend 
their money how they choose, and it will help our state stay competitive so we 
can continue to attract good-paying jobs."

   Changes negotiated by a pair of GOP holdouts protect city revenues by 
boosting the percentage of income tax shared with municipalities, and boost 
state debt payoffs to $1.9 billion.

   The new rules eliminated most of the usual debate, questions and forced roll 
call votes on amendments that can eat up hours of time. Holding 29 of 60 seats, 
Democrats' only power is to slow the movement of bills by extensive debate.

   Democrats were enraged, saying they did not show up Tuesday because 
Republicans had introduced a slew of last-minute budget amendments, and noted 
that it was absent Republicans who prevented a quorum.

   Rep. Charlene Fernandez of Yuma called the limits "absolutely ridiculous" 
and said Republicans wasted 26 days of the session getting their own members on 
board with the budget deal.

   The Senate packed the budget with conservative policy priorities, including 
a big expansion of the state's private school voucher program, a ban on 
teaching so-called critical race theory in K-12 schools, and a host of items 
targeting the enforcement of coronavirus restrictions. They include bans on 
cities requiring vaccines or ordering mask mandates if the pandemic again 
surges and similar restrictions for schools and state colleges and universities.

   Republican Rep. Bret Roberts of Maricopa said he would not have voted for 
the health budget bill without those items and told members that he was glad 
they were included.

   Democratic Rep. Lorenzo Sierra of Cashion, who survived a severe case of 
COVID-19 that left him on a ventilator for days, was flabbergasted. "Arrogance 
is not an effective vaccine against COVID-19," Sierra said.

   It also embraces the unfounded theory that former President Donald Trump 
lost in Arizona because of voter fraud, creating a $12 million election 
integrity fund to pay for election security updates and other priorities.

   While Republicans appear to have the votes to pass the overall budget, some 
of the items added by the Senate could end up being dropped by the House. The 
lower chamber adjourned at about 10:30 Thursday night after skipping debate on 
the voucher expansion, which some House Republicans oppose.

   The Senate, meanwhile, re-introduced and passed 22 bills that Ducey vetoed 
last month, when he said he wouldn't sign any new measures before lawmakers 
approved a budget. The unexpected action infuriated many lawmakers.

   Senators also took the extremely unusual step Thursday of voting to override 
one of Ducey's vetoes, which requires a two-thirds vote. Republican Sen. Tyler 
Pace said they chose a bill making technical changes to state laws that had 
previously passed unanimously to send Ducey the message that lawmakers won't 
roll over.

   The last time the Legislature overrode a governor's veto was in 1981.

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