Brewer: Keep budget fix simple

Gov. Jan Brewer warned legislators Monday not to try to come up with anything too complicated as they look for ways to bring in more revenues to balance the budget.

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Brewer, addressing participants at the Arizona Town Hall, acknowledged that she was unable to get the votes earlier this year for a temporary one-cent hike in the state sales tax. A handful of Republicans and all the Democrats were in opposition to the package.

Other ideas for generating cash have emerged. But Brewer said that, at least from her perspective, they are nonstarters because they don’t meet the goal of a tax hike.

“It needs to generate revenues immediately,” the governor said. “The crisis is upon us now. Proposals that involve totally upending our current tax system to produce extra revenues will take too long to address our cash emergency.”

And Brewer said that any plan “needs to be simple and clear for the voters so it can pass.”

That is the virtual mirror image of what was crafted by House Democrats.

They want to alter the system to require sales taxes to be collected not just on products but also on services that are now exempt. That would require a major rewrite of the tax code, something Brewer said is a recipe for defeat at the polls.

“Voters want a clear choice, and they should have it,” the governor said, citing the refusal of California voters earlier this year to enact a plan to not only extend a sales tax surcharge but also to redirect money from tobacco taxes, mental health programs and childhood development funds.

“One of the lessons from California’s failed ballot effort earlier this year was to keep it simple,” she said.

For some of the same reasons, Brewer said she did not think much of a proposal by some lawmakers to allow race tracks to have casino gaming, with the state taking a large share of the proceeds — at least, not to deal with the immediate problem.

The governor said she hasn’t been fully briefed on the plan being spearheaded by Rep. Andy Tobin, R-Paulden.

“But I don’t think it would help us for the problem we are facing today,” Brewer explained after her speech.

“Nor will it be ready for the 2011 budget. We need to fix the deficit now.”

At this point, though, Brewer’s continued call for new revenues remains unfulfilled.

The governor wants a special session later this month to put the issue on the ballot. But Brewer said there is no date yet because she has yet to come up with a plan with Republican legislative leaders that they can sell to their members.

But the governor is counting on getting some Democratic support this time around for her sales tax hike.

There are signs that, given the deteriorating economic picture, that will happen. Rep. Tom Chabin, D-Flagstaff, said he and other party members recognize the need for additional revenues to maintain state services.

But Chabin warned that Brewer needs to take her own advice and keep the plan simple.

He said Democrats would not vote for the sales tax referral earlier this year because it was part of a larger package that included immediate repeal of the state property tax and future tax cuts for business. Chabin said the result was that, after the temporary sales tax hike expired, the state would have ended up collecting $800 million a year less than it does now.

But Brewer said Monday she remains wedded to the idea that Arizona businesses need tax relief. She said that is particularly important in attracting aerospace, defense and other manufacturing jobs that pay high wages.

“We must rethink areas of our tax structure that unduly burden our employers, particularly those who require large capital investments,” the governor said, saying she wants to look at both their property tax burden as well as whether the state needs to cut its capital gains taxes.

And Brewer said there’s also only so much she’s willing to do to corral votes from Democrats for a tax hike. The governor said she’s not willing to plug the deficit, which legislative budget staffers peg at $2 billion, solely by increasing revenues.

“Proposals that increase taxes to avoid any substantial budget cuts may sound good to some, but they are unrealistic,” she said.

More to the point, Brewer said there is little chance of getting such a plan out of the Legislature, even if it is referred to the ballot.

“I support — and I believe the public wants — a balanced approach of budget cuts and a modest temporary tax increase,” she said.