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7:23 AM Thu, Nov. 15th

Bennett offers views on how to salvage state budget

Arizona Secretary of State Ken Bennett

Arizona Secretary of State Ken Bennett

Arizona Secretary of State Ken Bennett doesn't believe Gov. Jan Brewer will lose her bargaining power for her proposed sales tax ballot referral if she goes ahead and signs the budget the Legislature has sent her.

Bennett said Wednesday that he opposes the governor's proposed sales tax increase and thinks the voters will, too.

But he still wants to see the voters decide.

"I think people deserve the opportunity to decide if that's the best way to increase revenue," said Bennett, a long-time Prescott resident and former Arizona Senate president.

And Bennett still wants the governor to sign the budget that the Republican majority in the Legislature sent to her. Brewer has until the end of next week to sign or veto it.

The Daily Courier incorrectly stated Wednesday that because Bennett said Tuesday he wants Brewer to sign the 2009-10 budget that does not include the sales tax ballot referral, Bennett opposes putting the sales tax question to voters.

Signing the budget won't necessarily kill the ballot referral, Bennett explained Wednesday.

So far it hasn't worked for the governor to hold off on signing the budget until she gets her sales tax ballot referral, Bennett noted. The governor already vetoed one legislative budget proposal because it didn't include the sales tax question.

Bennett doesn't think Brewer would lose her bargaining power with the Legislature by signing the budget.

On the contrary, "If she vetoes the budget again, it will be 10 times harder to get either the sales tax referral or a budget," Bennett predicted.

Bennett says the governor still has bargaining power because everyone in the Legislature knows they'll have to cut another $1 billion in the 2010-11 budget year and several years beyond that. The Legislature's proposed 2009-10 budget uses one-time gimmicks and federal stimulus money to close the final $1 billion gap in the current budget year that began July 1.

There is no way the economy will recover enough to produce another $1 billion in state revenues in the 2010-11 budget year, Bennett said. That would require a 15 percent increase in sales tax revenues, for example.

"So I absolutely believe there is a reason for negotiations to occur successfully on the sales tax referral," Bennett said.

He said he has offered to help the governor negotiate with legislators in an effort to get the sales tax question on the ballot.

Bennett doesn't see getting the three Republican holdouts to change their minds and vote to send the sales tax question to voters.

However, he believes some Democrats would change their minds if they get something they want in return. So far, no Democrats have voted for the sales tax referral or Republican-controlled budget.

For example, the Democrats have a good idea to expand the state sales tax to cover more items such as extended warranties on big-ticket items, Bennett said. Right now, the tax revenues swing too much because they are too dependent on sales of new cars and homes, he said.

Expanding the sales tax base would allow the state to reduce its sales tax rate and boost consumer spending, he predicted.

It's too late to get the sales tax question on the November ballot, but it could happen around Dec. 8 if Brewer signs the Legislature's proposed budget by the end of next week, Bennett said.

Otherwise, it could happen in the early spring.