Proposition 204: Permanent Arizona sales tax hike fails - KPTV - FOX 12

Proposition 204: Permanent Arizona sales tax hike fails

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Arizona voters have rejected an initiative to replace a penny-on-the-dollar temporary sales tax increase set to expire in mid-2013 with a permanent increase of the same size.

Proposition 204, also known as the Quality Education and Jobs initiative, would have permanently increased the state sales tax rate by 1 cent per dollar beginning June 1, 2013, to a rate of 6.6 percent. The proposition anticipates the tax increase to generate at least $1 billion. The money collected from the tax increase would be used for educational programs, public transportation infrastructure projects and human services programs. [Read the full proposition]

According to an analysis by the Legislative Council, the initiative contains/contained other components that:

  • Will/would have provide that the specified funding levels for the state's kindergarten-through-twelfth-grade and state university systems cannot be reduced below the levels for fiscal year 2011-2012 or 2012-2013, whichever is greater.
  • Limits on school district bonds and overrides cannot be below those in effect for 2012.
  • Vehicle license tax and related highway user revenues cannot be diverted for any other purpose.
  • The sales tax base applicable to the proposed 1-cent sales tax increase cannot be adjusted in a way that causes the amount of sales tax collected to be less than the amount collected in the prior year, plus six per cent, unless there is a corresponding change in the tax base that results in no reduction in the amount of sales tax collected.

"Proposition 204 will help Arizona's ailing economy by investing much needed revenue into an already neglected freeway, street and public transit system and will make it illegal for the legislature to raid your transportation funding," Arizona Chapter Associated General Contractors President David Martin said.

Other supporters include the Arizona Students' Association.

"Prop. 204 brings something monumental - $150 million worth of financial aid that goes directly to students. This means students will finally get the resources they need to earn a higher education without crushing student debt," said association secretary, Danielle Bryant.

Opponents of the initiative included Arizona Gov. Jan Brewer.

"Proposition 204 only pretends to fund the reforms we desperately need," Brewer said. "Proponents of this measure, mostly unions and their supporters, want you to commit to permanently pay 18 percent  more in state sales taxes - without requiring any reforms or guaranteeing any results. And all of this before the current sales tax has even expired."

Another opponent, State Rep. Debbie Lesko, majority whip of the Arizona House of Representatives, said it will effectively strip away the right of Arizona Citizens to provide input on future budget decisions."

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