Arizona’s Democratic Gov. Janet Napolitano has offered a $100 million tax-relief package focused on school children, health care insurance and fuel-thrifty vehicles — a dramatic contrast from broader and bigger tax cuts on Republican lawmakers’ wish-lists.
Napolitano used her State of the State speech to sketch out proposals for new tax credits for businesses that provide health insurance for workers, a subsidy for low-income workers’ health-insurance premiums, a three-day back-to-school sales tax holiday for purchases of supplies, schools and computers, and Vehicle License Tax savings for higher-mileage vehicles.
“It’s a helping hand to those already doing the right thing, and it’s an incentive that will make it easier for businesses that want to, but are struggling themselves,” Napolitano said of the health-insurance proposal.
Republican legislators are pushing proposals for substantial cuts in income and property taxes, and GOP leaders have promised a tax-relief package totaling $250 million.
House Speaker Jim Weiers, R-Phoenix, called Napolitano’s proposed health-insurance credit an “interesting idea.”
However, he said Napolitano’s VLT proposal would penalize large families who require large vehicles and poor families who can’t afford to buy newer, fuel-efficient vehicles. “This truly smacks of class warfare,” Weiers said.
Rep. Laura Knaperek, a Tempe Republican proposing a 10 percent income tax cut with a $400 million price tag, also was critical of the VLT proposal, calling it “social engineering.”
Asked why she didn’t suggest general tax rate cuts like those sought by Republicans, Napolitano said she shaped her tax-relief packages in ways that would address policy goals while helping families and businesses afford necessities.
With limited dollars available, “targeted tax relief makes a lot more sense,” she said.
Senate President Ken Bennett, R-Prescott, said Republicans might be able to embrace or at least consider some of Napolitano’s tax-relief proposals once she provides specifics.
Napolitano also used her fourth State of the State address to the GOP-led Legislature to urge lawmakers to punish companies that hire illegal immigrants, to provide pay raises for teachers and state employees and to accelerate the phase-in of state funding for all-day kindergarten.
Napolitano won’t release her proposed 2006-07 budget until next week, but her address included a proposal for a $100 million package to enhance border security and combat illegal immigration.
Key elements would impose new fines and other penalties on businesses that knowingly employ illegal immigrants, seek federal funding to deploy National Guard troops on the border and add Department of Public Safety personnel for related duty.
On education, she called for expanding state funding for all-day kindergarten to complete the previously scheduled five-year phase-in in one year instead of three. She also urged lawmakers to increase higher education funding, including more financial aid for students.
Along with an unspecified raise for all state workers, she called for providing a pay raise for all public school teachers, with a minimum salary of $30,000. The average starting pay for teachers with a bachelor’s degree was $28,218 in the 2004-05 school year, with only Maricopa County having an average above $30,000, according to Arizona Education Association data released by Napolitano’s office.
“We need to bring teacher pay in line with teacher responsibility,” Napolitano said. “Teaching shouldn’t be the ‘last resort’ for students as they enter college and begin to think about future careers.”
Napolitano’s prepared remarks did not include a court-imposed deadline for lawmakers to act on an education funding issue which has divided Napolitano and Republican lawmakers, but she later told reporters she and Republicans were negotiating in hopes of reaching a compromise.
A federal judge has ordered daily fines starting at $500,000 if lawmakers don’t act within 15 days to satisfy a court order to improve school programs for students learning the English language. The fines would rise in steps to $2 million upon adjournment.
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