Weekly Wrap: Sales Tax Fight Splits GOP in Arizona

A brawl between Arizona Gov. Jan Brewer (R) and her own party’s leaders shows the tensions engendered by scarce resources during this recession.

The recession started in Arizona three months earlier than in the rest of the country, in part because the subprime mortgage crisis hit western states and Florida more severely than others. A steep decline in tax revenue has left the Grand Canyon state with a $3 billion budget hole.

Brewer wants to combine a temporary 1-cent increase in the state sales tax with cuts in services to balance the budget. GOP legislative leaders don’t want to raise taxes, preferring deeper cuts. When lawmakers refused to send her several spending bills approved earlier in June, she took the unusual step of filing a lawsuit June 16 asking the state Supreme Court to force lawmakers to send her the bills. Action on the bills is needed to stitch together a balanced budget.

If the state budget is not approved by June 30, Arizona’s government could shut down. Brewer, who took over in January when former Democratic Gov. Janet Napolitano became President Obama’s director of homeland security, said closing state government would put residents “at extreme risk.” She has ordered state agencies to pinpoint essential services that would continue if there is a shutdown.

Look for several states to report their highest unemployment rates since 1982 when the federal Bureau of Labor Statistics releases May jobless data today (June 19). Michigan (with 14.1 percent unemployed, the nation’s highest), Nevada (11 percent) and Georgia (9.7 percent) already reported record rates this week. The Economic Policy Institute in Washington, D.C., a think tank that examines jobless data, is convening analysts today from Michigan, Oregon and Ohio – three hard-hit states – to discuss what the data mean for their states. EPI says it will post highlights from the panel and a new graphic on its website by the end of the day.

Illinois is so desperate to save money that it is cutting off money for funerals for the poor.

The state human services department sent a letter to funeral homes saying Illinois would have to suspend $1,655 payments for indigent funerals beginning July 1 because the state can’t afford it. The state spends about $15 million on about 10,000 such funerals a year.

State officials told the Chicago Sun-Times there won’t be any money funerals for the poor for at least a year. Funeral home owners said they may not bury the indigent anymore, raising questions about what is going to happen to the bodies .

One business that has escaped the wrath of the recession this year is the maple syrup industry. Vermont syrup producers hiked their output by 30 percent this year, the highest since records started being kept in 1944. Producers attribute the increase to favorable weather, more tap holes than before and technological advances.