Legislative Update

Aug. 12, 2009

Transcript:

Ted Simons:
The state senate voted down an attempt to get a temporary sales tax hike on the ballot. The measure fell short by a couple of votes. What's next in the budget battle? Here to help us find an answer is "Arizona Guardian" reporter Dennis Welch. Good to have you.

Dennis Welch:
Thanks.

Ted Simons:
This vote, was it a surprise?

Dennis Welch:
There were two votes technically, today. First there was the latest incarnation of this, in which they were voting on a bill that would just include -- referring the tax increase to the ballot along with a spending cap on state spending. That was a couple of votes short. And then they moved to reconsider the prior bill, with the referral on there that failed in the legislature before and it failed again.

Ted Simons:
So what does this mean in the grand scheme of things? November 3rd, adios. December 8th, adios?

Dennis Welch:
That was the earliest they can possibly hold an election. November 3rd, voters will be deciding both bond issues and these kinds of things and it takes about a month afterward to recount -- they have to hold the machine in case someone wants to challenge the election and then have to go through routine maintenance, such as a -- inspections to make sure they work right, so it takes about a month between elections before they can go out there again.

Ted Simons:
And the thought for a December vote, it wouldn't look good for the sales tax because that's a time when a lot of folks aren't interested in politics. You're Christmas shopping and not interested in paying more for something else. That can't help the governor there.

Dennis Welch:
It doesn't, if you're going to be voting in between Thanksgiving and Christmas, for a lot of those reasons, people aren't interested. The people interested in this are those who are passionate about this issue and people more passionate about something like this would be someone who doesn't want to pay for taxes and they're the ones who are going to be more passionate. Not folks who are going to want to vote a tax increase that really isn't going to fix the budget problem altogether. You still have gaping budget deficits in the future even with a $2.5 billion tax increase.

Ted Simons:
And I want to get to those numbers in a second. We've talked a lot about this on the program. Are there still two avenues here? One designed to get Senator Caroline Allen on and the other to get Senator Gorman on? Are those tracks out there and are they headed out anywhere at all?

Dennis Welch:
I don't know. They've tried repeatedly, specifically over the past couple of weeks to get them on board the budget. There may be room to go off maybe democrat votes. It depends on how the governor plays this. She hasn't said anything right now, which I think is to her advantage to play her cards close to the vest. She hasn't said she's going to veto if they send the budget package up again. But they could offer a couple of things to the Democrats to get them on board.

Ted Simons:
We've heard the name Miranda as someone who might go across the aisle there. What would make a move?

Dennis Welch:
Word today he was the magic vote. Was the guy who was going to cross over and give them the final vote they needed for passage of this thing. They offered a couple of things. One of which was they were going to take a provision out that would allow the legislature to get at voter-approved spending money. The prop 105 money, voter mandated and protected stuff that the legislature would like to get at and be able to get us through these tough times.

Ted Simons:
The next deadline looks to be Monday, regarding the state equalization rate, the state property tax. If that comes and goes, that property tax returns?

Dennis Welch:
Yes, on Monday. Again, this puts a little bit of pressure too on negotiations moving forward this week. No Republican I think out there wants these tax statements to go out there. It's a $250 million -- they look at it as a $250 million tax increase. They don't want that and would like to permanently repeal it.

Ted Simons:
You refer to numbers regarding the state revenue projections in the coming years. Some sobering numbers even with the sales tax hike, even a temporary three-year deal, those numbers don't look good.

Dennis Welch:
No, I think it underscores the level of the problem out there. With revenues dropping so much, even an extra billion a year isn't going to help you. Republican lawmakers will say, listen, these tax cuts are going to help to spur the economy, bring jobs and companies out here and it's going to grow the state coffers. So these numbers in the future aren't going to be as bad as they are. But what we have to go off right now, it doesn't look good for the state moving forward.

Ted Simons:
And Democrats saying tax cuts don't make sense when you don't have a lot of revenue to begin with. The governor doing what she's doing, which is not all that clear, because you're not quite sure where she is on all of this. In terms of who she is talking to and what kind of negotiations are going on.

Dennis Welch:
We heard she was talking to Democrats in an effort to get them on board. But what does she do? The legislature, although they didn't pass the sales tax today, they passed basically the same budget they passed way back on June 30th. Now, they could send -- it appears they're probably sending that budget package up to her in the next couple of days. She's already vetoed this thing. She called it irresponsible -- detrimental to the state.

Ted Simons:
Last question, quickly. What happens the rest of the week?

Dennis Welch:
I think there's going to be a lot of negotiations going on. A lot of arm twisting and deal making, going on behind closed doors and those are really private conversations and I think some Democrats are going to be targeted by the governor's office to try and bring them in line because it's clear that, you know, the Republican votes just aren't there. That they need to deal with some Democrats.

Ted Simons:
All right. Dennis, good stuff. Thanks for joining us, we appreciate it.

Dennis Welch:
Thank you.