With Economy In “Limbo” Arizona Republicans Begin Work On State Budget Framework

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Small businesses are the backbone of the nation’s economy, and a report released last week found that small business owners are struggling to remain optimistic. They are holding out hope however, that the work being done in the Arizona Legislature could improve their outlook.

On Thursday, the Majority Leadership of the Arizona House of Representatives and the Arizona State Senate announced they intend to work “diligently” over the next several weeks to produce a continuation of the budget that passed last session.

 “With the state of the national economy in limbo, a continuation budget is the fiscally prudent, conservative approach for Arizona to safeguard essential governmental services. Last year, the Legislature passed a state budget with historic infrastructure investments, tax relief, and debt pay-downs.

 “In order to continue state programs without fear of an irresponsible fiscal cliff, the Legislature seeks to provide certainty that at a minimum, we have a fiscal year 2023-2024 budget in place.

 “We intend to build on last session’s successes and craft a budget that continues to champion fiscal responsibility, funding for key services, and relief for Arizonans. We anticipate a legitimate and spirited debate with the Governor’s office on new spending, but that debate should not happen with a loaded weapon pointed at essential services.”

Small business owners have little hope that a bill sponsored by State Representative David Livingston to lower the state’s corporate tax rate will ever be signed by Governor Katie Hobbs, who announced her plans last week to cut only sales taxes.

Livingston’s bill, HB 2003, won committee approval on Wednesday.

HB 2003, if passed, would step down the rate at which businesses are taxed from the current 4.9 percent to, over four years, a new low 2.5 percent starting on December 31, 2025.

 “With growing uncertainty from a shaky national economy and President Biden’s weak leadership in Washington, it’s more important than ever to ensure an environment where Arizona businesses can thrive – Arizona jobs and families depend on it,” said Livingston, who also serves as Chairman of the House Appropriations Committee. “Cutting the corporate rate continues the state’s commitment to creating a low tax environment. We’ve done great work to lower the rate on personal income and now we must take the next step to equalize our rate for C-Corps to make them even with other businesses who file via the personal income tax, such as S-Corps and partnerships. It is a matter of fairness and sound tax policy.”

 HB 2003 received the unanimous support of Committee Republicans, while Democrats voted against it. The bill now moves on to be heard by the House Committee of the Whole.

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