PHOENIX — Arizona lawmakers voted Tuesday to prevent the return of a suspended property tax.
The 16-14 Senate vote to repeal the levy came over the objections of two Republicans who chided colleagues for renouncing future revenues even before they know how they will finance the state’s needs.
“Call me silly, call me crazy,” said Sen. Carolyn Allen, R-Scottsdale. “But it doesn’t seem very prudent to me without the long big picture of knowing what this budget and what we’re going to be asked to do, to dump another $250 million on top of it with no plan.’’
Allowing the levy to take effect again in 2009 would produce an estimated $250 million annually for the state and raise the property tax on a $250,000 home by about $100 a year.
Sen. Tom O’Halleran, R-Sedona, said the business groups pushing hard for repeal are the same ones lobbying to improve education, pave more roads and keep the state from shifting health care costs onto the private sector.
“I guess they want a tax cut and they want money to deal with these programs,’’ he said.
But the other 15 Republicans, joined by Democrat Ken Cheuvront of Phoenix, provided the margin to send HB 2220, which already has been approved by the House, to the governor.
Gov. Janet Napolitano has signaled she might veto the legislation, calling it “premature.’’ She noted the levy, suspended as part of a 2006 budget deal, does not return until late 2009, making it unnecessary to deal with it now.
Sen. Ron Gould, R-Lake Havasu City, said it makes just as much sense to kill the tax now as any time.
“I made a promise to the taxpayers of my district that I would cut property taxes,’’ he said. “Property taxes are egregious,’’ Gould continued. “Essentially what you’re saying is, you pay your tribute to the government or we’re going to take your property.’’
According to the business-backed Arizona Tax Research Association, savings from the repeal would be split roughly 50-50 between owner-occupied homes and all other types of property. The largest individual benefactors of the repeal would be businesses that own major properties, such as utilities, manufacturers and large retailers.
If the tax takes effect again, “it will be seen as a tax increase because they will not have been paying it for the three year of time,” said Sen. President Tim Bee, R-Tucson.
The bill is supported by numerous business groups but opposed by major schools groups who argue that repeal would sacrifice tax dollars needed for public schools and other priorities.
Napolitano has voiced reservations about the repeal, citing the state’s fiscal troubles and saying that lawmakers don’t have to — and shouldn’t — take up the issue yet.
It wasn’t immediately known how soon the bill reach Napolitano’s desk because as a matter of routine it first must return to the House for paperwork reasons.
The House approved the repeal on a 32-28 vote largely along party lines.
Bee said repealing the tax now would provide certainty about future tax burdens, a step that would help encourage business recruitment and retention efforts. “Providing this permanency of this tax (cut) will help provide that certainty,” he said.
The timing comes as the current $10.6 billion state budget currently is running about $1.2 billion in the red. And without action, next year’s proposed spending exceeds anticipated revenues by a figure approaching $2 billion.
The Associated Press contributed to this report.