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State Capitol News

State lawmakers wary of sales tax proposal

By Howard Fischer

Flagstaff, AZ – State lawmakers from both parties are taking a guarded -- if not
outright wary -- stance to a possible special election this
spring for a temporary hike in the sales tax.

Governor Jan Brewer is considering all options to balance next year's
budget according to her press aide. One idea being floated would
hike the state's 5.6 percent sales tax by a penny for one to
three years. That could bring in up to $1.1 billion a year, going
a long way to making up next year's anticipated $2.4 billion
deficit. House Speaker Kirk Adams said he's not anxious to go
down that road.

"Raising taxes, particularly that substantial an increase during
a time of deep recession, could be dangerous for the economy. And
so I think it's incumbent upon us to proceed very carefully."

The idea would send the issue to voters later this spring, taking
lawmakers off the political hot seat of hiking taxes themselves.
But some legislators, like Sen. Ron Gould from Lake Havasu City,
don't like even that idea. Gould noted his district borders
states which already have lower sales taxes.

"The sales tax on those major purchases won't be coming to the
Department of Revenue here in Arizona. It'll be going to the
Department of Revenue in Nevada. My merchants won't be able to
make a living because a bad decision by the Legislature will have
driven their business into other states."

Brewer's office has given no indications when the governor will
unveil her budget-balancing plan.