Tax on the rack in 30-30 Arizona House

Failure of Arizona flat-tax proposal sparks talk of other options for state budget

By Mary Jo Pitzl | Arizona Republic

But its most ardent proponents — legislative Republicans and Gov. Doug Ducey — say the defeat Monday in the Arizona House of Representatives is just round one. They are prepared to stick with the plan as it is.

Meanwhile, the failure of the plan to create a 2.5% rate for most taxpayers has put new light on other ideas for what lawmakers should do with an estimated $2.6 billion surplus as they try to enact a new state budget before the July 1 constitutional deadline.

Suggestions include delaying the start of the lower rate, nudging up the rate and stirring gambling revenues into the mix.  

Other proposals have found new life, at least theoretically: reducing the size of the tax cut to something less than the current estimate of $1.9 billion, paying down more state debt, and using the surplus dollars for one-time expenditures, such as infrastructure projects from roads to school building repairs.

A 30-30 tie vote in the House on Monday killed the bills that were key to revamping Arizona’s tax structure. Lawmakers return to work on Thursday, although budget votes are not expected.

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