PHOENIX — In theory, Republicans in Arizona should be the happiest Republicans in the nation. Democrats failed in their insurgent bid last November to flip the Legislature — even as Democrats in other states succeeded — and the governor’s office is now occupied by a Republican on a fluke when Gov. Janet Napolitano, a Democrat, left town for the Obama administration. But hard fiscal realities can put a strain on any marriage, and the new governor, Jan Brewer, is finding that life with the Legislature and a $3.4 billion budget deficit is several feathers shy of paradise. Republican lawmakers have insulted the governor in the local news media and rejected her budget proposals, and on Tuesday some even refused to vote on her latest budget. The governor’s plan includes tax increases for shoppers, cuts in the personal income tax and the corporate tax, and sharp reductions in state spending. At the center of the conflict is the governor’s proposalthat the state dig out of its shortfall — equal to a third of Arizona’s operating budget — with a 1 cent sales tax increase, to be put before voters on the November ballot. This request enraged Republican lawmakers, whose leaders have been unable to reach a budget deal with Ms. Brewer. She vetoed most of the bills in an earlier budget package, saying the cuts were too injurious to the poor. (The Democratic minority in the Legislature remains disenchanted with all of the budget proposals.) The House passed a budget largely in line with the governor’s request, but the plan has stalled in the Senate, where four crucial lawmakers have refused to go along. One of them, Senator Carolyn S. Allen of Scottsdale, said she disliked the cut in the income and corporate tax that was negotiated by her fellow Republicans in the House in exchange for the sales tax increase. “I think the governor has made a drastic error in judgment,” Ms. Allen said in a telephone interview. “I like her, but I think she is too desperate.” On Tuesday, Senator Pamela Gorman resigned as majority whip, saying in an e-mail message to the Senate president, Robert Burns, that the tax battle was “taking on a life of its own that is not healthy for our caucus, nor our party.” The entire budget process has been two parts pain and one part folly, including a moment in June when lawmakers, facing a midnight deadline, tried to metaphysically halt the fiscal year by taking the clock down from the Senate wall. They are also considering mortgaging the state Capitol as well as a historically significant limestone cave system owned by the state. Ms. Brewer’s reputation as a conservative has been damaged by her proposal to raise the sales tax, and some of her colleagues in the party, which is dominated by conservatives, have whispered about challenging her in the 2010 Republican primary. “The economic downturn has created a very difficult scenario for any elected official who is a fiscal conservative,” Paul Senseman, Ms. Brewer’s director of communications, said in an interview. Arizona finds itself in a worst-case scenario among states that have been hammered by the foreclosure crisis. One of the fastest-growing areas in the country for years, the state has seen its population — and needs — explode over the last decade, and development has more than helped cover the costs. The state’s principal revenue source is its 5.5 percent sales tax (with city tax added on, the average tax is about 9 percent), followed by the personal income tax and the corporate tax. Counties and school districts collect property taxes. With the number of new building permits plummeting, revenues from the big-ticket items associated with new homes, which had fueled much of the state’s budget in recent years, also fell. As secretary of state, Ms. Brewer was first in line to take over when Ms. Napolitano left to become homeland security secretary in January. Ten days after her ascension, Ms. Brewer had to face her first budget crisis, and she made it clear that big cuts to schools and health care were not going to fly, and that she thought the state would need to raise the sales tax. Thinking they could avoid a governor’s veto of their plan, which had deep cuts, by running out the clock, Republicans wrangled over the budget for the 2010 fiscal year until the last minute. But the governor vetoed most parts of the budget except those needed to keep the state running, and then called legislators back for a special summer session to clean up the rest. Ms. Brewer has found no succor among Democrats, whom she largely edged out of budget negotiations in the spring. They, too, are upset about her proposed cut to personal and corporate taxes, which they say will wipe out almost all the money gained with a three-year sales tax increase. Democrats say they are baffled by the inability of the majority party to make a deal with the Republican governor. “They have shown complete and total failure to govern,” said Representative Kyrsten Sinema, a Democrat and the assistant leader of the party’s caucus in the House. “They have had seven months, and they can’t get this done.” If any of this spells trouble for the Republicans, their leaders are not saying so. “That just speaks to how diverse our state party is,” said Matt Roberts, a spokesman for the Arizona Republican Party.
Photo from the original article, taken by Ross D. Franklin (Associated Press).
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