TUCSON, Ariz. (KGUN) — After weeks of fighting over what’s in the Arizona state budget, both parties say they’ve agreed on a budget and put it up for a formal vote.
But how could the budget affect you?
In government, as in business, everything comes down to the budget. Who gets the money? How much do they get, and what strings are attached? Republicans and Democrats were dug in on what they wanted—and didn’t want. After weeks of negotiation they worked their way to what they’d accept.
Both sides are talking about a $1.4 Billion tax cut spread over four years.
Republicans wanted to be sure Arizona’s budget included the same tax breaks for tips and people aged 65 and older that appear in the recent Federal budget bill.
The breaks actually apply to the 2025 tax year and go forward from there.
Liliana Soto with the Governor’s office says you do not need to refile to get the break on tips and 65-plus taxes.
“Thanks to the executive order the Governor Hobbs issued back in November, as you may recall, three key benefits are already in your 2025 forms. We're talking about a higher standard deduction, no tax on tips or overtime, and a $6,000 senior deduction. Again, no Arizona needs to refile, no returns are needed if you already filed, you're done.”
Republican leaders wanted a ten percent cut across most state agencies. The compromise budget calls for a two-point-five percent reduction instead.
Democrats wanted to kill state tax incentives designed to attract data centers to Arizona. The compromise budget doesn’t kill data center incentives but it does suspend them for three years.
The Republican budget plan threatened to kill Tucson’s Rio Nuevo downtown development district. The compromise budget keeps Rio Nuevo alive but requires it to do more to collect more sales tax dollars.
