Brewer wants more tax cuts for business

In her State of the State speech, Brewer said Arizona is on the mend. The state budget is balanced and more money is flowing into the treasury than is being paid out for services.

"Too many Arizonans remain unemployed or underemployed," the governor said. "This economic downturn has been tough for them and their families. I haven't forgotten about them."

The answer, Brewer said, is luring more firms to the state. And doing that means enacting even more tax cuts than the $538 million package of business tax reductions approved last session, which, phased in over several years, will cut corporate income taxes by nearly 30 percent and business property taxes by 10 percent.

"Together, just like last year, let's continue to lower taxes, cut regulation and tell all employers that Arizona means business," the governor said. "We need to make Arizona the free-market beacon to the nation and the world, where you have the opportunity to prosper."

Brewer's premise drew derision from Senate Minority Leader David Schapira. He said Arizona has a balanced budget not because of better economic development but because the state slashed aid to schools and health care for the poor.

House Minority Leader Chad Campbell said there's nothing wrong with wanting to restructure the state tax code in a way that makes Arizona more attractive to business, but it cannot be done in a vacuum.

Campbell offered his own - unsuccessful - proposal to cut business taxes last year, "but I paid for them" by closing other tax loopholes, he said. "That's the difference: You have to pay for your tax cuts."

He said there is no way the state can create enough jobs to make up for the amount of money lawmakers already have voted to forgo.

But House Speaker Andy Tobin said he believes tax cuts, by themselves, do work. He said the jobs added in the last year prove that.

The speaker said it is "a good time to review and see if there's maybe more we can do" for business

Tobin also disagreed with Campbell's assessment about whether those tax cuts pay off. He said every 1,000 jobs created generates $1 million in state income tax revenues.

It will take a lot of jobs, though, to get Arizona back to where it was before the recession. The most recent figures show the number of people working in the state now is nearly 269,000 less than it was at its peak in December 2007.

Brewer provided no specifics on exactly where she wants to cut taxes, promising more details later this week. She did say, though, that she wants to "aid small businesses by simplifying the state tax code."

Brewer, in a separate package of priorities released after her speech, also said she will spur economic development through creation of a community college scholarship program to help adults retrain and transition into new careers, and a requirement that individuals enrolled in tax-funded job-training programs undergo drug testing.

The governor also boasted about the fact the temporary 1-cent-per-dollar sales tax she persuaded voters to enact in 2010 will disappear at the end of May 2013. Brewer said that shows voters she is keeping her promise.

The ballot initiative was crafted as a constitutional measure, with a specific three-year life. That means it automatically self-destruct, with or without legislative action.

There has been some discussion about a new tax among groups concerned about the loss of the approximately $1 billion a year the levy raises. But that would require an entirely new vote. Brewer has so far been noncommittal about whether she would support such a levy.

But the governor made it clear she does not believe that, with a recovering economy, the state budget should go back to where it was before the recession - and before many state programs were scaled back or eliminated entirely. Instead, she promised a "refashioned government."

"It will be a limited, efficient, nimble government," Brewer said.

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