The budget agreement between legislative leadership and Gov. Doug Ducey is in jeopardy in the Senate, where four Republicans say they plan to vote against the plan.
GOP Sens. Paul Boyer, Heather Carter, J.D. Mesnard and Michelle Ugenti-Rita have drawn lines in the sand over a handful of issues that they said will keep them from supporting the $11.9 billion budget plan after lawmakers learned the details on Monday.
Republicans have 17-13 advantage in the Senate, meaning that they can’t afford to lose more than one GOP vote without turning to Democrats, a move that would jeopardize the deal with Ducey.
Ugenti-Rita said she’s opposing the budget because of its failure to swiftly end a controversial vehicle license tax. The Scottsdale Republican had vowed to vote against any budget that didn’t repeal the fee, which the Arizona Department of Transportation set at $32 per vehicle, rather than the $18 estimated last year.
The budget plan includes repeal of the fee, but over five years; it would drop to $26 in fiscal year 2020, eventually reaching zero by 2024. Ugenti-Rita said that’s not fast enough, and wants to see the tax be phased out in no more than two years. She said it would be inappropriate to spend several extra years collecting money on a tax that should have never happened in the first place.
“I think that gives us enough time to prepare, but then also shows the public that we mean business and we are going to take care of this,” Ugenti-Rita said.
For Mesnard, the disagreement is tax conformity, an issue he’s been working on for much of the past two legislative sessions.
The budget plan conforms Arizona’s income tax code to the 2017 federal tax cuts, which would eliminate a handful of itemized deductions. Ducey and GOP leadership’s agreement would use the extra revenue that generates to more than double Arizona’s standard income tax deductions so that they match the federal deductions, and would slightly reduce income tax rates, as well.
The conformity plan that Ducey and leadership agreed to, which was championed by Rep. Ben Toma, R-Peoria, would also reduce the number of tax brackets from five to four. The plan incorporates the taxation of online goods ordered from out of state and pays off $155 million in state debt, which generates additional annual savings and makes the proposal revenue-neutral.
Supporters have touted the plan as a tax cut for most Arizonans. But Mesnard, R-Chandler, said he’s still troubled by the tax hike it would impose on some people. While the Toma plan raises taxes on people who earn more than $100,000 per year, Mesnard said the plan he supports would “really close to break even for them.”
“While we certainly were never going to be able to reach a perfect arrangement where every single individual is held harmless, just like the feds didn’t, (I had) a proposal where everybody nearly is, within 1 percent of their pre-conformity tax liability,” Mesnard said.
Mesnard said there are other Senate Republicans who won’t vote for the current conformity proposal, though he wouldn’t name them.
Boyer’s problem has nothing to do with the budget. Rather, the budget is becoming collateral damage in his fight to extend the statute of limitations for victims of childhood sexual abuse to sue their abusers or others who allowed the abuse to occur.
The current statute of limitations lasts for two years after a victim turns 18 years old. Boyer, a Glendale Republican, wants to extend that by at least seven years, and to give others who have exceeded that limit time to sue, either through a two-year window for all victims after the law goes into effect or by giving people time after they learn they were abused or disclose that abuse to a mental health professional.
House Speaker Rusty Bowers has touted an alternative plan that would extend the statute of limitations until victims are 30 years old. And if criminal charges are brought, the limit is extended to one year past the final disposition of the case, regardless of when the abuse occurred.
Boyer said that proposal, House Bill 2746, is insufficient, and held a press conference on Monday with childhood sexual abuse victims and Democratic lawmakers to denounce it. He says he won’t vote for a budget until his earlier proposal, which was blocked in committee, gets a vote.
Sen. Heather Carter, R-Cave Creek, has stood with Boyer on his ultimatum over the statute of limitations bill. She said on Monday that “some issues transcend everything else we do down at the Capitol, and I think protecting and giving a voice to children who have been assaulted is a priority that this legislature should undertake,” and said she’s still a “no” vote on the budget.
Carter said she has numerous other issues with the budget, which is “so far off anything I would vote for at this point,” though she didn’t provide any specifics.
“I don’t understand why things that went through Appropriations (Committee) with incredible support were cut out of the budget and things that were never heard are in the budget proposal,” Carter told Arizona Mirror in a text message.