The Arizona Republic
More than half a million working, low-income Arizonans could get a tax credit worth an average of $128 a year if lawmakers approve a proposal pushed by Republican Gov. Doug Ducey to establish a new tax credit.
The key word: If.
A bill that would make the tax relief a reality has advanced in the Senate, where a similar proposal got bipartisan approval last year in a 26-3 vote. But passage remains uncertain, with gatekeepers unwilling to shed light on whether they’d support this piece of Ducey’s final spending plan, and the only tax aid targeted at low-income Arizonans in Ducey’s eight years in office.
Senate Bill 1018’s sponsor, Sen. Sean Bowie, D-Phoenix, said he hoped bipartisan backing — evidenced by Ducey’s announcement in January supporting the earned income tax credit — would mean passage of the plan.
“I didn’t know the governor was going to include it in his proposal until the day of, so that was a nice surprise,” Bowie said. While most other states offer a similar credit, Arizona does not.
A similar bill Bowie backed last year died in the House, apparently out of concern about piecemeal tax reform. But supporters say the focus should now shift to aid for low-income Arizonans on the heels of a giant tax cut last year that largely benefited higher earners.
“The idea is getting more dollars back to low-income working families,” Bowie said. “Over the years, the Legislature has passed a lot of tax cut bills that primarily have helped folks at the higher end of the income scale and corporations. This is a good idea to help those who are young or struggling.”
Even with the state’s bank accounts flush with cash, it’s unclear if lawmakers will coalesce around the proposal that would add about $74 million annually to the amount of income the state gives up in tax credits. In 2020, for example, credits for individual taxpayers cost the state an estimated $620 million, according to the Department of Revenue.
