Originally Published: March 6, 2009 12:03 a.m.
PRESCOTT - Gov. Jan Brewer said Thursday that she doesn't see any way around a temporary tax increase to solve the state's budget woes.
The governor took her five-point budget plan on the road to Prescott Thursday, repeating the stance she made to the Legislature Wednesday.
"We must be willing to consider passage of a temporary tax increase," the governor told citizens and local elected officials at the Prescott City Hall.
While the governor called the tax increase a "very last resort" during her speech to the Legislature, during a Daily Courier editorial board meeting Thursday she said the time for the last resort already has arrived.
"There is no other way to resolve it if we want to save Arizona," Brewer said. Otherwise, the state's core education, health care and public safety services will suffer cuts that would hurt too many people.
While she wouldn't say what kind of tax increase would be best, she said it needs to raise $1 billion of the projected $3 billion shortfall in the state's next budget year that starts July 1.
That could mean a one-cent sales tax increase, or a property tax increase that would add $350 per year in taxes on a $250,000 home, said Tom Manos, the governor's deputy chief of staff for finance who joined Brewer during The Daily Courier meeting.
The Legislature or the voters could decide on the tax increase.
The Legislature should make a decision on the tax increase this month because it would take three months to get the question on the ballot, Brewer said.
She also wants another question on the ballot, asking voters to allow the state during crises to use revenues that past voter initiatives have earmarked for specific uses. The 1998 Voter Protection Act now prevents putting the money to other uses.
She estimated a special election would cost $10 million.
The governor proposed coming up with another $1 billion through more budget cuts, alongside $1 billion the state expects to get next year from the federal economic stimulus package. Her staff estimates that next year's revenues will be about $7.25 billion.
State Sen. Steve Pierce and Rep. Lucy Mason, both Prescott-area Republicans who represent Legislative District One, joined Brewer and Secretary of State Ken Bennett of Prescott on the governor's plane ride from Phoenix to Prescott.
While Mason said she's open to a tax increase "after we've exhausted every other option," Pierce said he won't consider it at any time.
"I ran on the promise I wouldn't raise taxes, and I'm not going to raise taxes," the freshman senator said.
Bennett, a former Arizona Senate president, said the governor's tax increase idea has to be on the table.
"I think it's refreshing to see her be honest about where the state's financial condition is, because the last two years the state ignored or tried to cover up what was happening," said Bennett, referring to Janet Napolitano's Democratic administration. "It's totally unfair Gov. Brewer had to inherit this situation."
House Majority Whip Andy Tobin, R-Paulden, who had to stay at the capitol Thursday for hearings, said the governor's call for a tax increase is premature.
The appropriations committees won't finish budget hearings until late next week, and the state has other options to raise $1 billion such as selling buildings or expanding gaming to racetracks, Tobin said.