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Arizona GOP budget deal envisions massive income tax cut

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Posted at 11:58 AM, May 18, 2021
and last updated 2021-05-18 14:58:00-04

PHOENIX (AP) — A budget deal struck between Republicans who lead the Arizona Legislature and Gov. Doug Ducey includes implementing a flat 2.5% income tax that cuts $1.5 billion a year from state revenue.

It also caps the maximum any taxpayer will owe with a new voter-approved tax surcharge at 4.5%. The deal envisions using state general fund revenue to make up the difference in the 3.5% surcharge voters approved in November in Proposition 208.

The deal also cuts commercial property tax rates, pays down some state pension and other debts and will increase the state’s super-low weekly unemployment benefit from $240 to $320 a week. Democrats oppose the tax cuts.