Howard Fischer
Capitol Media Services
The state House refused Monday to require that individual income tax rates be cut automatically any time the state runs a surplus.
As crafted SB 1577 would have required an annual determination of the “structural surplus.” That’s the amount of ongoing state revenues above anticipated ongoing expenses, adjusted for population growth and inflation.
Then the Department of Revenue would have to reduce the state’s income tax rate equal to half that figure. Automatically. And permanently.
That bothered Rep. Matt Gress, who said it would put tax policy “on autopilot.”
The Phoenix Republican, who was the budget director under former Gov. Doug Ducey, said the flaw is that it looks only at what were prior revenues. What it does not consider, he said, is future obligations, potentially creating future budget deficits.
More problematic, Gress said, is it ties the hands of future lawmakers.
He said that it is crafted to cut only individual income taxes. And being automatic, it would not leave wiggle room for cutting other levies.
