Brewer vetoes budget plans and calls special session, state may avoid shutdown - Phoenix Business Journal:

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The Legislature sent Brewer a budgetf that included more spending cuts than she prefer and does not include a temporart sales tax increase or flat income tax plan that was part of budgetr compromiseslast week. The budgetr was transmitted to Brewer this morning as the state tried to avoid a shutdowb at the end of the fiscal year at midnightJune 30. The governo r responded Wednesday afternoon with vetoed of some budget billsand line-item vetoes of other legislative actions, includintg spending cuts and raids of various fundas to help close a $3 billion budget deficit. Brewer called the budget “fatall y flawed” with too many cuts for universities andhealth services.
The governo is calling the Legislature back into session on Monday to hammedr out anew budget. Brewer did sign some budgeg bills (which included the line-item vetoea of specifics actions) which will avoid a shutdown of statw government officesand services. The centerpiece of the budgey battle revolves arounda three-year, temporary increas e to the state’s sales tax. Brewer and business leaders back the tax increase to help solv the budget shortfall and avoidspendinbg cuts. But the salees tax plan failed to gain supportfrom anti-tax Republicans as well as Democrats in the The controversial flat income tax plan -- which woulds have taxed all state income at 2.
8 percen t and exempted the first $10,000 of an individual’s earningsx from the tax -- also was not in the Legislature’sw budget. It could be revived in the special