SCOTTSDALE β With the state potentially sitting on $1 billion, Gov. Doug Ducey put down his marker Friday to use some of that to cut income taxes.
In a speech to the Arizona Tax Research Association, Ducey boasted of signing legislation earlier this year that indexed the stateβs income tax brackets. The net effect was to ensure that someone whose salary increased no faster than inflation was not bumped into a higher tax bracket.
But he said heβs not done.
βThis was an important first step to our mission to reduce income taxes in the state of Arizona every year,β he told the business-oriented organization.
Speaking to reporters afterward, Ducey said the move makes economic sense, both for those already here and those he hopes will come.
βIβm here to represent the taxpayer,β the governor said. βWe want to have an improved tax code that attracts businesses and individuals to the state of Arizona.β The governor cited a report that said Arizona is one of the top three locations for firms that leave California.
βWe want to stay that way,β he said. βThis is a way to improve the lives and prosperity of Arizonans.β
And the governor insisted that pushing through a tax cut would not undermine efforts to get voters to agree in May to dig into the state education trust account to settle a lawsuit with schools instead of using the funds Arizona already has on hand.
Ducey isnβt the only one looking at the stateβs improved finances. But key Republicans, addressing the same conference, had some other thoughts on the best way to use that money.
Senate President Andy Biggs, R-Gilbert, said he agrees with Ducey that there is money to cut taxes. But his priority for relief is elsewhere.
βI believe the most onerous tax that we have in this state is property taxes,β he said.
βA person could never fully own their home (just) because you can have your house paid off,β Biggs explained. βBut if you make a mistake, forget, donβt pay (the property tax), lose your income, you can get in trouble and lose your home.β
But thereβs one big hurdle to what Biggs wants to do: The state does not levy a property tax.
That is reserved for local governments, schools and improvement districts. So thereβs no statewide property tax for lawmakers to reduce or eliminate.
Biggs did not dispute that point. But he insisted theyβre not insurmountable. βThere are ways to do it, and Iβm kicking them around,β he said, providing no specifics. He conceded, however, that the complexity of that may make it politically unworkable, leaving Duceyβs income tax cuts as a simpler alternative.
βLetβs just face it: It is easier to revamp an income tax system than it is a property tax system,β Biggs said.
Rep. Justin Olson, R-Mesa, said heβs more focused on using the cash to pay down the stateβs βstructural deficit.β
