A four-term senator agreed Thursday to support putting a controversial sales tax hike on the ballot in exchange for four new spending cuts in the state budget — including a 5 percent cut in state employees.
Sen. Jack Harper, R-Surprise, had previously said he would not vote for a proposal by Republican Gov. Jan Brewer for a three-year increase in the state sales tax. Harper refused even to support sending the question to voters.
"As long as others are driving up the spending in state government, it’s not my responsibility to provide them the revenues," he said.
But Harper relented and agreed to support the referral when he got four changes.
The most significant is a requirement for a 5 percent reduction in state employment by next June.
Harper said that does not require an identical cut at every agency. Instead, he said, Brewer will have the ability to decide whether some agencies can absorb a bigger cut while sparing others.
All totaled, he said, about 1,700 positions would be eliminated.
How many actual workers will lose their jobs, though, remains uncertain.
Harper said agencies are free to meet the goals by eliminating positions that are currently vacant. But he said that still accomplishes his goal because it prevents those slots from being filled when the economy gets better.
“Businesses are cutting their work force by 30, 40, 50 percent,” he said, to deal with the economic slump. Now, Harper said, the state wants to raise sales taxes.
“We have to show them that we are tightening our belts in state government as well,” he said.
Other changes Harper negotiated are:
• Taking $1 million from the Arizona Automobile Theft Authority.
• Reducing staffing at the Auditor General’s Office.
• Curtailing the ability of Tucson to divert state sales tax revenue for its Rio Nuevo redevelopment project.
“You sold your vote for a tax referral for those four items?” asked Sen. Rebecca Rios, D-Apache Junction.
That brought a sharp rebuke from Sen. Russell Pearce, R-Mesa, who chairs the Senate Health Committee.
“Negotiations go on all the time,” he said. “He negotiated for some things that were important to him in order to support a budget deal.”
Rios, chastised, recrafted the question to ask Harper about the negotiation. Harper said it was a fair trade: providing the necessary vote for the sales tax referral in exchange for shrinking state government.
With Harper’s support, the package was approved by the Senate Appropriations Committee late Thursday. The House Appropriations Committee had given its blessing to the plan — without the changes Harper inserted — on Wednesday.
Harper said later he does not intend to vote for the tax in November. But that is irrelevant to the budget negotiations as he needed only to vote to send the issue to voters.
It remained unclear, though, whether Harper’s negotiated change of heart provides the necessary 16 votes in the Senate for approval of the package — and, in particular, sending the sales tax plan to the ballot.
The deal seeks to ask voters to hike the current 5.6 percent state sales tax by a penny for two years beginning in January, dropping back to 6.1 percent in 2012 before going away entirely. Brewer said the state needs the additional revenue — estimated at up to $1 billion a year on the full penny increase — to help get through the current deficit.
Sens. Ron Gould, R-Lake Havasu City, and Pamela Gorman, R-Anthem, both have said they will never support sending the issue to the ballot. And no Democrats back the plan.
But Harper’s vote provides the necessary margin — assuming the other 15 Senate Republicans also go along.
Harper said he targeted the Automobile Theft Authority because he sees much of what it does as unnecessary.
“When we have an economic downturn, we can’t afford to be giving grants out to local agencies, we can’t afford to buy 'club’ anti-theft devices to give out to people just because they drive a Honda and live in apartment complexes, which is what the auto theft authority seems to be doing,” he said.
The deal with Harper comes as Brewer and the Republican legislative leaders who negotiated a budget deal are under increasing pressure to do something — and quickly — and not just because the budget year actually started at the beginning of the month.
Lawmakers have to approve the package by the end of the week to have the election for the proposed temporary sales tax hike on the Nov. 3 ballot.
Failing to meet that deadline, required by a combination of federal and state election laws, pushes any vote back later into the month or possibly into December. And that creates different problems if voters reject the tax hike, as it would put the budget out of balance.
The same ballot measure also would ask voters to cap spending for three years at $10.2 billion, the amount of the state budget before the economy tanked and cuts had to be made.
Rios said Democrats don’t like many of the spending cuts in the plan. But she said they cannot support the tax hike.
She pointed out the package also would immediately repeal the state property tax regardless of the outcome of the sales tax election. The state property tax was suspended in 2006 as part of a budget deal when the state had a surplus but will return automatically this fall unless lawmakers act first.
The package also would cut corporate income taxes by more than 30 percent and individual tax rates by about 6.6 percent beginning in 2011, a move that would reduce state revenue by another $400 million.
Brewer has defended the tax cuts, saying they are necessary to stimulate economic growth. But Rios said the experience of the last 15 years — including reducing individual income taxes by about a quarter — did not save Arizona from the slump.