A top aide to Gov. Jan Brewer hinted Friday the governor might veto a package of tax cuts for business if they reach her desk in its current form.
Eileen Klein, the governor’s chief of staff, said Brewer wants no overlap between the higher sales taxes she is pushing voters to enact and lower taxes for businesses.
KPNX-TV (Channel 12) reporter Brahm Resnik, who interviewed Klein for Sunday Square Off, pushed her for a more definitive answer, asking if that means no business tax cuts until after 2013. “Correct,” Klein responded.
But House Speaker Kirk Adams, R-Mesa, who crafted the legislation awaiting final Senate action, said he has no intent at this point to alter the measure from its current form.
Adams pointed out that HB 2250 already was amended to have the bulk of the tax cuts take place starting in mid 2013. That would coincide with the expiration of the temporary one-cent hike in state sales taxes — assuming voters approve.
The legislation, however, still includes $12.1 million in corporate income tax cuts that would take effect for the calendar year beginning Jan. 1, a figure that would rise to more than $25 million the following year.
It also includes $34 million in capital gains tax cuts for small business, also this coming year, and an accelerated schedule for businesses to depreciate the value of equipment for tax purposes, cutting state revenues another $8 million.
The totals are small in comparison to the approximately $950 million the sales tax would raise its first year. But collecting higher taxes from consumers while letting businesses pay less at the same time becomes a public relations and political problem for Brewer as she tries to convince voters to approve the levy at a special May 18 election.
That possibility already has been pointed out by Democrats, who voted against even asking voters for higher taxes.
Klein said Brewer remains in favor of “strategic reductions” in taxes to help promote job growth, “but in the long run, not in the short run.”
“Her interest isn’t in taxing consumers to give tax reductions to other people,” Klein continued.
“We’re interested in the long run in making refinements in the tax code to make sure we have a competitive state,” she said. “Because ultimately we do recognize it’s going to be the private sector and the creation of jobs that’s going to bring our state back.”
That’s also the assessment of Adams. The difference is that he doesn’t think the tax cuts can wait.
“We need the economic recovery now,” he told Capitol Media Services. “Waiting until 2014 doesn’t make much sense while we’ve got continuing job losses now.”
No date has been set for a Senate debate on the measure.