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News & Press: Arizona Business News Updates

Brewer celebrates end of Prop. 100 tax hike

Friday, May 31, 2013   (0 Comments)
Posted by: Rhette Baughman
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Arizona consumers will benefit from a substantial tax cut on June 1 as Proposition 100, the temporary sales tax increase approved by voters in 2010, expires.

Gov. Jan Brewer, who got Prop. 100 approved after a year-long battle, celebrated its expiration at a press event on Friday, symbolically tearing up the document that implemented the three-year tax hike.

Brewer said she held the event to celebrate "the rarest of occurrences in government.”
"Today, a tax is going to expire. That’s not all. Today we can look back on this tax and know that it did its job,” she said, standing in front of a backdrop emblazoned with the slogan, "Promises made, promises kept.”

The constitutional amendment that voters approved in May 2010 included an automatic repeal date after May 31, 2013. Last year, Brewer opposed Proposition 204, which would have made permanent the 6.6 percent sales tax rate and used the revenue for education, infrastructure and other issues.

The governor recalled the severe deficit Arizona faced as a result of the economic downturn, and spoke about how far the state has come since then.

"Now that our state budget is balanced and on stable footing once again, it is easy to forget the emergency we faced four years ago when I started talking about the need for a temporary tax. The Arizona economy was bleeding jobs. Our budget was bleeding red ink. Arizona’s budget deficit grew into the multi-billions of dollars, the worst in the nation on a per capita basis, according to some analysts,” she said. "The alternative to Prop. 100 was unacceptable. The alternative would have laid waste to Arizona’s most critical state programs and services at the very time they were needed the most.’’

Prop. 100, which increased the state’s sales tax rate to 6.6 percent from 5.6 percent, raised about $2.7 billion during its three years, according to an analysis released by the Governor’s Office. Two-thirds of the revenue, $1.8 billion, went to K-12 education, with about $590 million going to health and human services and another $322 million going to public safety.

Brewer acknowledged that the state still had make cuts in K-12 education and other areas, but said the cuts could have been far worse.

"Without Prop. 100, the cuts to core state services would have been a magnitude worst. The largest single area of our budget, K-12 schools, would have endured the brunt of those cuts,” she said.

Jaime Molera, president of the State Board of Education, said the K-12 community is indebted to Brewer for Prop. 100, and praised the governor for her leadership. Her legacy, he said, will be of a governor who did what’s right instead of what’s politically expedient.

"We would’ve lost teachers. We would’ve lost educational leaders. We would’ve just eviscerated programs,” he said.

Glenn Hamer, president and CEO of the Arizona Chamber of Commerce, said Brewer’s leadership on Prop. 100, along with several pieces of major economic development legislation that followed it, has made Arizona one of the top states in the country to do business.
"Governor, we were proud to stand with you three or so years ago in support of the temporary sales tax. We’re very proud to stand with you today as you rip that document up and we can put it into the dustbin of history. Temporary did mean temporary,” said Hamer, whose organization was a major backer of Prop. 100.

And Rick Murray, CEO of the Arizona Small Business Association, credited Brewer and Prop. 100 with taking the state out of a "catastrophic financial tailspin.”
"We knew the importance of investing in our future,” he said.


Source: AZ Capitol Times
By Jeremy Duda-
Arizona Capitol Times
Published: May 31, 2013 at 10:50 am
10:50 am Fri, May 31, 2013
Photo by Evan Wyloge/Arizona Capitol Times

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