Hobbs defends taking credit for entire $1.4B tax cut package

"With this package, I am proud to say that I have lowered taxes every single year of my administration,'' she said Tuesday at a press conference her office organized at the state Capitol.

And if there was any doubt about her message, she made sure to deliver her comments from a podium proclaiming "Hobbs' $1.4 billion middle class tax cut.''

The package of state tax cuts Hobbs signed into law earlier this month, however, pretty much mirrors the federal tax cuts in HR 1, which was approved in Washington last year. Those include a higher standard deduction, no tax on tips or overtime, and an additional $6,000 deduction for seniors.

It also includes various business tax breaks that were not on Hobbs' wish list, such as changes in rules about expense deductions and depreciation.

There are some differences from HR 1, including a new Arizona tax credit starting next year for childcare expenses.

That was not in Hobbs' budget request. But the Republican-controlled Legislature decided, months before there was a state budget deal with Hobbs, that such a credit made more sense for Arizonans than a provision in the federal law of an extra deduction for interest payments on the purchase of a new American-built car.

In fact, when Hobbs first said last November she wanted to have Arizona tax law conform to parts of the federal tax changes in HR 1, she included the tax break on new car interest on her wish list.

But the governor, after detailing Tuesday what she called her $1.4 billion tax cut package — the total tax savings for Arizonans over four years — insisted under questioning that the press conference called by her office wasn't about her.

"Look, I'm really not interested in playing 'who gets the credit' game,'' she said. "The fact is that Arizonans are going to benefit from these tax cuts.''

Yet the press conference featured speakers invited by Hobbs to thank her for the tax breaks, including not just two Democratic lawmakers but also the president of the Arizona chapter of AARP, an acute care nurse, and a vice president of the Valley of the Sun YMCA who is in charge of childcare programs.

Hobbs did acknowledge that pretty much everything in those $1.4 billion in tax cuts for which she is claiming credit actually originated with — and has a similar price tag as — the original proposal by legislative Republicans who sought to mirror what is in HR 1.

That is clearly not what she asked for when she proposed last November a much smaller and focused package of cuts to help the middle class while leaving out all federal provisions she said would help the "billionaires.'' The list of what she didn't want included a measure to increase the tax deduction that could be taken for state and local taxes. Another she didn't want provides some tax relief to businesses by allowing them to write off the costs of their equipment purchases sooner.

GOP lawmakers sent her three separate bills, all with the same tax cuts as in the federal HR 1. All three were vetoed.

Yet the final budget that Hobbs signed earlier this month had pretty much all the same tax cuts for businesses that she previously rejected. 

Hobbs acknowledged Tuesday that she always knew that she wouldn't get just the parts of HR 1 she wanted. "I said ... I was willing to negotiate on the other pieces of tax conformity,'' she said. "That's what this tax cut represents.''

Still, she had no apology for calling it "Hobbs' $1.4 billion middle class tax cut.''

"Well, every single Republican in the Legislature that voted for this budget is also calling it the 'Republican tax cut,' '' she said.

That's true. In fact, Senate Republicans issued their own press release earlier this month proclaiming Arizona "the only state in the nation to deliver President Trump's historic federal tax cuts at the state level.''

Arizona Senate President Warren Petersen said those tax cuts, coupled with other provisions in the new $18.3 billion state spending plan for the coming year, "help Arizonans keep more of their hard-earned money while ensuring our state remains economically competitive.''

Hobbs echoed a similar sentiment Tuesday, albeit with a partisan spin.

"As the politicians in Washington, D.C. raise the cost of living with tariffs, war in Iran that's hiking the cost of gas and groceries, and attacks on affordable healthcare, in Arizona we are taking a different approach,'' she said. "We are putting more money back in your pocket and ensuring you have what it takes to make ends meet at the end of the month.''