/ Modified may 4, 2012 11:43 a.m.

Legislature Adjourns 2012 Regular Session

After 116 days, $8.6B budget, lawmaking ends in a flurry of bills

The 50th Arizona Legislature adjourned Thursday night amid a flurry of last-minute votes on several bills, including legislation giving individuals and businesses more tax breaks.

The Senate completed its work about 5:30 p.m. and waited nearly three hours on last votes in the House before both chambers' leaders gaveled the session to a close at 8:25 p.m. Legislators scrambled to depart, many facing newly drawn districts and the primary election less than four months away.

It was Day 116 of the session, which legislative leaders had targeted to end at the 100-day mark. Negotiations between Republican Gov. Jan Brewer and GOP legislative leaders over the 2012-13 budget prolonged the session.

The $8.6 billion budget, increasing state spending for the first time in five years, passed earlier in the week. Brewer wanted to use the first state surplus since 2007 to increase spending for education, welfare and prisons. Legislators balked, saying they wanted to save as much money as possible for potentially perilous fiscal times ahead.

In the end, compromise prevailed, although legislators got what they wanted for the rainy day fund, $450 million, while Brewer's educational initiatives were cut significantly short of her requests.

Legislators spent the rest of the final week working on personnel reform, which passed the Senate Wednesday and the House Thursday, and on pet projects and leftover bills.

The governor got her personnel reform package passed, a bill that state workers' organizations opposed as an avenue to cronyism because it removes worker protections and appeals systems. Brewer called the legislation one of her "four pillars of reform," saying it will make state government more agile in hiring good workers and firing bad ones.

In one of its final actions, the Legislature approved a capital gains tax reduction and expanded an industrial tax credit. The centerpiece of the package is a phased-in 25 percent reduction in state individual income tax on capital gains. The reduction of capital gains taxes, which are the profits on investments, will start in mid-2013. Legislative budget analysts estimate annual lost state revenue at $75 million by 2016.

One mark of the session was lack of contention over bills aimed at further toughening state action against illegal immigration. The few bills that were introduced made little progress.

The governor over the next several days will review legislation and sign or veto. She has five business days from the arrival of a bill to make a decision on it.

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