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Ducey signs bill to pay off debt

Posted by   /  June 6, 2019  /  No Comments

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The state borrowed $1B during the recession.

By Howard Fischer | Capitol Media Services via Arizona Capitol Times

Gov. Doug Ducey signed legislation Thursday to pay off about $190 million in debt, a payment he had originally opposed.

The funds are part of the more than $1 billion borrowed by the state during the recession, largely by selling off state buildings in a lease-buyback program, when state revenues plummeted. That borrowing, pushed by Ducey predecessor Jan Brewer, was designed to prevent even deeper cuts in spending than the $1 billion that had to be instituted.

Brewer also oversaw a temporary 1-cent hike in state sales taxes to generate another close to $1 billion a year.

With the payment, the remaining debt is now in the $550 million range.

What helped with the prepayment was an unexpected windfall of more than $150 million in state income tax revenues due to changes in federal tax laws that is increasing the obligation on some Arizona residents.

Lawmakers eventually enacted offsetting tax cuts for future years. But that still left the question of how to deal with the cash that already was coming in.

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