The Arizona House of Representatives completed its work on the state budget for the 2022 fiscal year, which includes a record tax cut that cuts tax rates for every Arizona taxpayer, a record reduction in state debt, increases to both K-12 and higher education funding, and hundreds of millions of dollars for infrastructure and water projects.
“It’s a balanced, responsible plan that supports the priorities that Arizonans value, like our schools, public safety, and our veterans,” said House Majority Leader Ben Toma, who authored the tax reforms in the Republican Budget Plan.
The budget moves Arizona towards Governor Ducey’s longtime goal of a flat tax that keeps Arizona competitive compared to neighboring states, while funding important future considerations like Arizona’s water needs. “The historic flat tax rate reform reduces income taxes for every Arizonan and will create a competitive business environment to attract more jobs and keep our economy growing.” said Representative Regina Cobb, the House Appropriations Committee Chairman.
The budget deal was held up for weeks while details were negotiated, and with Democrats set on voting against the bills, it required all 31 House Republicans and 16 Senate Republicans to pass the budget bills. One major stumbling block was debt reduction, which was a key demand of State Representative David Cook, who wanted to use a portion of the state’s record revenues to reduce the state’s debt load. Thanks to Cook, the debt reduction is estimated to save taxpayers $270 million a year in interest expenses.
Not every Republican priority passed however. ESA expansion, which offered needy students the opportunity to move to better schools was blocked by State Representatives Joanne Osborne, Joel John, and Michelle Udall. Representative Osborne, perhaps the Legislature’s most liberal Republican, had threatened to vote against conservative efforts, including school choice, in a tweet the day before the votes. The bill had passed the Senate but with Udall, John and Osborne voting with the Democrats, efforts to expand school choice died in the House.
The Legislature is expected to Sine Die in the next few days, ending the legislative session for the year.
Big Red State tax cut: Arizona passes Gov Ducey tax reform lowering top tax rate from 8 to 4.5%. Every income group gets tax cut. 250,000 new jobs for AZ
— Stephen Moore (@StephenMoore) June 25, 2021