Brewer puts state budget hole at $4B, unveils tax increase, budget plans - Minneapolis / St. Paul Business Journal:

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Brewer has talked about a five-point budgeft plan for months, but has not officially laid out her The Republican governor sent a budgety outline to the Legislature on It includes asking voteres to approvea 36-month, 1-cent increase to the state’s 5.6 percent sales tax. She does not want to extende the sales tax to currently exempted servicesand items. A Democrati plan unleashed last week would lower the salestax rate, but extensd it to various services not alreadt taxed. The governor’s budget plan puts the fiscal 2010 deficitat $4 up from previous estimateds of $3 billion.
Brewer’s budget also calls for a three-yeat phase-out of the $250 million state equalizationj rateproperty tax. That tax has been on hiatus, but will come back at the end of the year withoutrfurther action. Business and real estate groups favo r a full repeal of theequalization tax. “While the governor’s budget regardint state equalization repeal is a step our organization cannot accept multiplwe historic tax increases without requisite spending cuts that approacj what the private sector hasalreadhy endured,” said Tim Lawless, Arizona presideny of the National Association of Industrial and Office Propertie real estate group.
“Noqw is especially not the time to raise property taxees withthe Prop. 13 movemenyt lurking. We are however, to a ballot referral that lets the peopld decide whether they want the sales tax rates increasecd along with a future ballot measure to adjust automaticspending increases.” Lawless warnec that bringing back a property tax that hits both homeownerse and businesses could help spur 2010 ballot measure that impose California Proposition 13-styl restrictions on property taxation. Brewerr said the sales tax increase wouldsbe temporary, and she would like to see some reductiones down the road to corporate and business taxeas to help attract investments to the state.
Antitac advocates and conservative lawmakers oppose the sale s tax increase and want to try to solved the fiscal 2010 budget without raising Brewer has promised to veto budgets that rely too much on federao stimulus money and program cuts to balancethe budget. The governor’s budgetr also looks to protect university and public health funding via federapstimulus money, and wants voters in 2010 to undo current restrictionzs that keep the Legislature from cutting voter-mandatesd spending. Teachers unions and Democrats opposethat idea.