GOP-led Arizona legislature cut income tax by $ 1.8 billion

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PHOENIX (AP) – Arizona House on Thursday approved a $ 1.9 billion income tax cut plan that mainly benefits the wealthy as majority Republicans began pushing through a budget plan for the State opposed to Democrats and filled with a Tory wishlist for policy changes.

The House joined the Senate in approving tax cuts and another bill protecting high-income taxpayers from the effects of a new 3.5% tax surtax approved by voters in November to increase funding education.

In total, they had approved four of the 11 bills that make up the $ 12.8 billion budget plan by late afternoon. The party line’s 31-29 votes came after majority Republicans, angered that House Democrats did not show up for work earlier in the week, limited debate on the budget plan.

House Speaker Rusty Bowers announced that the majority party would change the rules and allow only 30 minutes of debate on each of the 11 budget bills. Such debate usually takes hours on each bill.

“It was clear, was clear then, by the absence of an entire caucus… that procedural obstruction and delays were instituted instead of civility,” Bowers said.

Republicans say the state is overflowing with cash and the tax cut is necessary to keep Arizona competitive and prevent the tax increase contained in Proposition 208, which adds the new Arizonans tax high income. They argued that it would help businesses create jobs and that it would help the middle class.

“I think we have a historic tax cut here that will have a significant positive impact on everyone, everyone in the state,” said Peoria representative Ben Toma, the majority leader and the one of the main architects of tax cuts. “It’s a tax cut that helps small businesses and helps us be more competitive as a state compared to our neighbors.

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

“Now is the time to make meaningful investments in the future of our state instead of this massive giveaway to people who really aren’t struggling,” said Democratic Representative Kelli Butler of Paradise Valley. “And there are a lot of people in Arizona who are really struggling.”

The $ 1.9 billion tax cuts will be phased in when revenue targets are met, starting at $ 1.3 billion this year. When fully implemented, the plan would reduce tax rates for most taxpayers to 2.5%, 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.

According to Legislative Budget analysts, the average taxpayer earning between $ 75,000 and $ 100,000 will save $ 231 per year in state income taxes, while the average taxpayer earning between $ 500,000 and $ 1 million $ per year will save over $ 12,000.

Governor Doug Ducey praised the passage of the tax reduction bill and the provision protecting people earning over $ 250,000 or couples earning over $ 500,000 from the new Proposition 208 tax. An estimated $ 827 million in new money per year will still go to schools, but come out of the general fund, preventing the state from funding other programs.

“Every Arizonan – no matter how much they earn – wins with this legislation. They will be able to keep more of the money they earn under this tax plan, ”said Ducey. “It will protect small businesses from a devastating 77% tax hike, it will ensure that working families and all Arizona taxpayers can spend their money the way they want, and it will help our state stay competitive in order to that we can continue to attract good paying jobs. “

The changes brokered by a pair of GOP refractories protect the city’s revenue by increasing the percentage of income tax shared with municipalities and increasing state debt repayments to $ 1.9 billion.

The new rules have eliminated most of the usual debates, questions and forced roll-call votes on amendments that can take hours. Holding 29 of the 60 seats, the Democrats’ only power is to slow the movement of bills through full debate.

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

Representative Charlene Fernandez de Yuma called the limits “absolutely ridiculous” and said Republicans lost 26 session days to involve their own members in the budget deal.

The Senate has packed the budget with conservative political 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 plethora of articles aimed at enforcing restrictions on coronaviruses.

He also embraces the baseless theory that former President Donald Trump lost in Arizona to 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 Senate, meanwhile, reintroduced and passed 22 bills that Ducey vetoed last month, when he said he would not sign any new measures until lawmakers approve a budget. The unexpected action infuriated many lawmakers.

Senators also made the extremely unusual decision Thursday to vote to overturn one of Ducey’s vetoes, which requires a two-thirds vote. Republican Senator Tyler Pace said they chose a bill making technical changes to state laws that had already been passed unanimously to send Ducey the message that lawmakers will not overturn.

The last time the legislature overruled a governor’s veto was in 1981.


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