The state legislature worked through Thursday night and into Friday morning with the goal of adopting a budget that would address the state’s estimated budget shortfall of approximately $3.2 billion. The budget being considered this week was nearly identical to the vetoed package from July 1, except for the inclusion of both a temporary sales tax increase and a delayed income tax reduction.
By 2:15 a.m. on Friday morning, the House approved a budget package acceptable to the Governor and the legislative leadership. The following terms of the budget impact cities and towns:
a $22 million vehicle license tax fund shift (a $5-6 million reduction to Phoenix revenues)
a gradual decrease in the assessment ratio for commercial property from 20% to 16% beginning in 2012, which may lead to an increase in residential property taxes
a two-year freeze on impact fees
a two-year building code moratorium
a temporary sales tax increase (1-cent in 2010, 2011, 0.5-cent in 2012)
a delayed income tax reduction of $400 million ($200 corporate/$200 personal). The income tax cuts would result in loss of shared revenues to cities and town.
When the budget bills passed the House, the Senate moved swiftly to follow suit. After the bills were approved in the Senate Committee of the Whole and ready to have their final vote, Senate action came to an abrupt halt without the necessary votes to pass the budget package. This unexpected turn of events led Senate President Bob Burns (R - Peoria) to stop activity by suspending Floor action at 4:30 a.m.
The Senate will reconvene at 1 p.m. on Tuesday, August 4. It is unclear as of this writing whether there are sufficient votes to approve this budget package. To watch live proceedings on Tuesday, go to http://azleg.granicus.com/Mediaplayer.php?publish_id=5.
Stay tuned . . .
Source: P.L.A.N.
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