Gov. Jan Brewer outlined a recovery plan for the state’s economic crisis, including a temporary tax increase, to both houses of the state Legislature Wednesday afternoon in her first State of the State address.
Brewer said her plan is to cover the projected $3 billion budget deficit in 2010 and help bring businesses and jobs into the state.
One of the governor’s proposals is to reduce spending by up to $1 billion by 2010. Brewer said the cuts are necessary in the face of an economic downturn that could last years.
“The truth is, we cannot afford the size of government we have now,” Brewer said. “We cannot expect state revenues to improve until 2012.”
Brewer also argued for increased flexibility in using state revenues. This would mean amending the Voter Protection Act, which mandates that money allocated for voter-approved initiatives cannot be used for any other purpose by the Legislature.
Brewer argued that much of that money could be used instead for certain core services, such as health care and education. Many of those initiatives passed when the state was experiencing growth and voters had different priorities, she said.
“Times have changed, and it makes no sense to have large sums available for program enhancements when we can’t afford the core services,” Brewer said. “One example, $20 million is mandated this year to stop urban sprawl … We do not have an urban sprawl problem this year.”
The most controversial proposal put forth by the governor, a staunch conservative, is a temporary tax increase. She said the increase is absolutely necessary to preserve vital state programs, such as health care and public safety, while also cutting the deficit. The increase would generate an additional $1 billion in revenue over the next year, she said.
“You would not hear me utter these words if I did not firmly and confidently believe [a tax increase] is absolutely necessary,” Brewer said. The comment was applauded by observers in the gallery, but was not acknowledged by legislators.
Rep. John Kavanagh, R-Fountain Hills, said he disagreed with Brewer’s proposals to temporarily increase taxes in order to cover the shortfall.
“I think it’s too early to play the ‘T’ card,” Kavanaugh said, referring to Brewer’s tax increase proposal. “I’d rather keep our taxes low and get new jobs [from companies] fleeing California because of their high taxes.”
Kavanagh said he doubts any legislation to raise taxes would pass on the floor of the state House of Representatives. A bill to put such an initiative on the ballot for voters might pass, he said.
“I would be very surprised if it were voted off this floor,” Kavanagh said. “A bill to bring it to a vote might get out of here.”
Rep. Cloves Campbell, D-Phoenix, said he would only support tax increases as a last resort, when other measures to balance the budget fail. The increases would also have to include provisions that would channel the increased revenue towards the core services Brewer mentioned in her speech.
“Before I would talk about supporting a tax increase, I think we can find some other places we can trim, outside of education and health care,” he said. “There [would have to be] a lot of caveats to it before I would agree to it.”
Brewer spoke to legislators as thousands of people marched on the Capitol lawn outside in protest of cuts in state funding to education. Democrats in both houses took advantage of the situation by taking the stage set up at the demonstration and slamming Brewer’s proposal to change the Voter Initiative Act.
“The one thing I can tell you that she wants to do is put something on the ballot to ease restriction on voter-protected funds,” said Rep. David Lujan, D-Phoenix. “Those are funds that are dedicated to education, and we cannot let that happen.”
Reach the reporter at derek.quizon@asu.edu.
