Arizona Conservative Breaks Ranks on Tax Hikes

Posted on February 08, 2003 | Type: In the News
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One of Arizona's most prominent conservative Republicans told her colleagues Friday it's time to consider new taxes to end the state budget crisis and avoid a political trouncing by Democratic Gov. Janet Napolitano.

Most Republican state officials have rejected any new taxes in light of a predicted $1.4 billion budget shortfall for fiscal years 2002-03 and 2003-04. They want to erase the gap instead by spending less and by eliminating low-priority programs. But former state treasurer Carol Springer broke from those ranks Friday while speaking to about 100 people at the Goldwater Institute in Phoenix.

Napolitano delivered a budget plan in January that includes no general tax hikes while proposing elements that conservatives oppose such as heavy borrowing and accounting moves that push spending into future years. Springer said Napolitano has moved into a strong position to criticize Republican budgetcutting alternatives.

"The governor's budget has taken our pledge of no new taxes and shoved it down our throats," Springer said.

Republican critics claim Napolitano's plan would force the state to raise taxes by $1 billion next year to keep up with spending. Springer, a former state senator, said a coalition of moderate Republican and Democrat lawmakers will thwart any significant departures from Napolitano's approach, making a tax increase all but inevitable.

But Republicans could seize an opportunity to link new sales taxes with the elimination of individual and corporate income taxes, Springer said. Income taxes bring in about $2 billion a year, she said, while extending the state sales tax rate to cover most services would raise $4 billion to $6 billion annually, she said. In general, Arizona's policy is to tax only retail goods.

"When you're being pushed toward a cliff, you start building bridges," Springer said. "Over the past two decades, both Democrats and Republicans have greatly increased the role of government and we still have to pay for it."

The Goldwater Institute sponsored a series of panel discussions Friday on the state's budget problems, with the slate of speakers expected to tilt toward limited government, free market approaches to the budget crisis. Springer is well-respected among con servatives for overseeing a series of tax cuts in the 1990s while she was chairwoman of the Senate Appropriations Committee. Springer also was among the first to predict the depth of the state's budget woes during her unsuccessful bid in the Republican governor's primary last year.

Napolitano has appointed a 31-member task force to review the state's tax structure, and the governor has said she would listen to recommendations that include new tax revenue. One of her policy advisers said he hopes Springer's comments will encourage Republicans who control the Legislature to be more open minded as well.

"A little bit of dialogue is almost worthless," said George Cunningham, the governor's deputy chief of staff for finance. "A great deal of dialogue is much better for the future of Arizona."

But the odds are stacked in favor of balancing the budget without new tax revenue, as two-thirds of the Legislature would have to approve any plan. Sen. Carolyn Allen, R-Scottsdale, said residents aren't interested in sales tax proposals.

"We would have the business community coming down on us," Allen said. "My doctors would be there, my dentists . . . It would be wild."

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