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Arizona

Penny Sales Tax Increase on May 18 Election Ballot

Temporary tax hike would help cut estimated $2.6 billion deficit

Timothy Schmaltz of Protecting Arizona’s Families Coalition (PAFCO), which advocates for children and older people, said he “reluctantly” supports the tax hike to keep schools and the social safety net intact—if shrunken.

Proposition 100 opponents, disappointed by the defection of some regular allies, argue that businesses and families are already struggling enough and can’t cope with higher sales taxes, even temporarily. The extra penny would set the sales tax at 6.6 cents on the dollar, or an 18 percent increase.

Sen. Thayer Verschoor, R-Gilbert, chairman of the “Ax the Tax” committee, said anyone who votes for the sales tax to avoid service cuts may be disappointed. “The sales tax would raise $900 million, but it is a $3 billion problem,” said Verschoor, who is also running for state treasurer.

Verschoor also said the tax would hurt small businesses, and he cited a conservative Goldwater Institute estimate that the tax would cut work hours or jobs for 14,000 to 16,000 Arizonans. Verschoor said the state must move beyond the kind of spending it had during Arizona’s boom years.

“We need to be living within the revenues we are bringing in, without a sales tax or more borrowing,” he said.

AARP Arizona is not taking a position for or against the sales tax hike. “It is a revenue source we like the least,” said Jay Hardenbrook, associate state director for advocacy. “But we also take the position that the state needs revenue.”

Maureen West is a Phoenix-based writer.

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