Arizona Senate Passes Budget, Tax Cut

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Arizona taxpayers are one step closer to keeping more of their earnings.

 

As they have nearly every year, Arizona lawmakers worked through the night into the next day, passing their annual budget legislation packages. The series of bills passed Tuesday evening and Wednesday morning after multiple amendments to ensure all Republicans supported the proposal.

One of the amendments includes an expansion of the state’s program that allows students to essentially take their allotted state funds with them to the school of their choice. If enacted, the Empowerment Scholarship Account program would apply to nearly two-thirds of students in the state if the change is enacted.

Another would ban controversial topics in schools, including a new philosophy called “critical race theory.”

Gov. Doug Ducey released a statement of support Wednesday.

“My thanks goes out to Arizona State Senate President Karen Fann, Senate Appropriations Chairman David Gowan, and their colleagues for working together to pass this historic budget,” Ducey said. “This balanced and fiscally responsible plan is a win for all Arizonans – it delivers unprecedented tax relief to working families and small businesses, it pays down state debt, and it continues to invest in our schools and infrastructure so we can keep Arizona competitive. I look forward to signing this budget once the Arizona House of Representatives votes and it reaches my desk.”

Facing a budget surplus compared to COVID-19 pandemic projections, lawmakers have opted to reduce income taxes, flattening the state’s four-tier progressive income tax down to one 2.5% rate over the next two years. The 3.5% income tax surcharge on single filers with income over $250,000 remains, but all filers would see their tax rate capped at a total of 4.5%.

Democratic senators spoke against the budget bills, saying the extra funds should be used to increase spending on their preferred state allocations such as education and expanding health care for low-income residents.

“This is welfare for the wealthy,” Sen. Rebecca Rios, D-Phoenix, said.

It was only senators who participated in the all-night process. House Democrats left the floor Tuesday, forcing leadership to postpone their votes since they lacked the required quorum to pass bills. Republicans had four lawmakers attending virtually, which was allowed via a recent rule change but did not count toward their quorum requirements.

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This article was published on June 23, 2021 and is reproduced with permission from The Center Square.

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