Amidst a projected $400 million state budget shortfall, Arizona Republicans are championing family tax rebates as a means of providing relief to Arizonans grappling with economic challenges. The Finance Advisory Committee’s recent report identified a drop in individual income tax collections as a contributing factor to the anticipated budget shortfall. The report prompted Arizona House Democrats to criticize what they termed an “irresponsible permanent $2 billion income tax cut primarily benefitting wealthier Arizonans,” referring to the 2.5% flat tax approved by Republican lawmakers in 2021.
Republican legislators, including the Arizona Freedom Caucus, gathered on Monday for a news conference, positioning the tax rebates as a form of “inflation relief” destined for Arizona families. Set to commence on October 30, the tax rebates are expected to reach approximately 750,000 Arizona families, with the distribution process potentially taking weeks to a month.
Senate President Warren Petersen, R-Gilbert, emphasized the impact of inflation on Arizona families, citing surging housing costs, high gas prices, and escalating energy expenses. Phoenix experienced a 13% increase in consumer prices in late 2022, leading the nation in inflation, according to data from the Bureau of Labor Statistics.
“Families are suffering from high gas prices, surging housing costs, increasing energy costs and everything in between,” Petersen remarked. He highlighted the economic challenges faced by citizens, including taking on additional jobs, forgoing family vacations, and turning to food banks for assistance.
Tatiana Peña, a mother of five daughters, shared her perspective during the news conference, expressing gratitude for the tax relief. “When you are raising five daughters, they’re really hungry. That is a lot we have to pay for, and the fact that we have had so much inflation hasn’t helped out. Then we have to buy their clothing, school supplies, even health care – everything’s been going up so much, including gas,” Peña said.
The tax rebates will provide $250 per dependent under the age of 17 and $100 for dependents over the age of 17. Families with multiple dependents stand to receive up to $750. Senate Majority Leader Sonny Borrelli, R-Lake Havasu City, emphasized the belief that individuals are best equipped to decide how to allocate their money: “The whole point is people know what to do with their money better than we ever will in government.”
Despite the Republican initiative, officials with the Arizona Senate Democratic Caucus did not provide an immediate response for comment.
While recent data from the Bureau of Labor Statistics indicates a decrease in the consumer price index in the Phoenix metro area from February to August, many Arizona families continue to grapple with financial hardships. Jerry Brown, director of media relations at Phoenix-based St. Mary’s Food Bank, noted an increased demand for food assistance, surpassing numbers seen during the pandemic two or three years ago. The food bank currently serves up to 1,500 families daily, underscoring the ongoing economic challenges faced by Arizonans.