Your Questions Answered! Updated 4/24/10
The Arizona Legislature is asking voters to temporarily raise the sales tax by 1%, until May 31, 2013. To see the transmitted bill, click here. The election will take place on Tuesday, May 18, 2010. The following is information that will explain the proposition’s potential impact.
What are the specifics of Proposition 100?
Proposition 100 proposes a 1% increase (one-cent per dollar) in the Arizona state sales tax. Two-thirds of the revenues generated would fund k-12 education and the other one-third would fund health and human services and public safety. The sales tax would automatically repeal on May 31, 2013.
Will it really repeal automatically?
Yes, it will repeal on May 31, 2013. It would take a two-thirds vote of the legislature or another voter proposition to keep the tax increase in place.
Why didn’t the legislature just pass the sales tax increase?
Governor Brewer asked legislators to pass it but it failed. In Arizona it takes a two-thirds vote to raise revenues and there are 31 legislators who have signed an oath to Washington special interest lobbyist Grover Norquist, promising to never raise taxes in Arizona–no matter what the situation. To read more about the Norquist Pledge, click here.
What is the state of education funding now?
Arizona per-pupil funding is currently among the lowest in the nation. In addition, Arizona schools have already absorbed several rounds of cuts in 2009. Due to these cuts, Arizona schools are experiencing increased class sizes; cuts to extra-curricular activities and athletics; and the loss of PE, music, librarians, books and even paper.
What happens to education funding if Proposition 100 does not pass?
If the temporary 1% sales tax does not pass, as much as twenty percent of all public education funding could be cut! This could mean 1.5 to 2 of out of every 10 teacher positions may be eliminated.
Will there be additional cuts to public schools even if Prop 100 passes?
YES. Even if Proposition 100 passes the revenue raised is not enough to close the budget gap. Additional cuts to education proposed include:
- Reduction of state funding per-student from current levels to FY2005-06 funding levels.
- Elimination of state funding for Gifted Programs, Teacher Training, Adult Education and GED, and the Early Education Block Grant.
- The elimination of the Full-Day Kindergarten funding rate ($218 million)
- Reduced funding for Charter Schools ($10 million)
- No funding for regular School Building and Maintenance. Only $5 million for emergency maintenance state-wide.
- Reduction of support for Community Colleges and Universities to FY 2005-06 levels. Per-pupil support would drop for universities from $9,480 to $7,100 per student
Updated information – click on the following for specific school district or university/community college information: Conditional Cuts to Arizona School Districts, Conditional Impact on Arizona Universities. According to the conditional budget, if Proposition 100 fails to pass the following cuts to education funding would occur: $428 million loss to K-12, $107 million loss to universities, $15 million loss to community colleges.
Since the election isn’t until May 18th, will there be a budget before then?
Two budgets have been passed by the legislature and signed by the governor. The first budget includes the revenue raised by the one-percent sales tax increase. The second is a contingent budget – passed in case Proposition 100 fails on May 18. The contingent budget makes further cuts to programs to make up for the $900 million deficit that would persist if Proposition 100 is defeated.
The contingent budget includes cuts so drastic that the state would lose millions of dollars in federal matching funds. This loss of federal funds would far outweigh the savings to the state from the cuts. If Proposition 100 fails, the legislature will likely return to address the potential loss of federal funds even though they have passed this contingent budget.
The amount from the sales tax apportioned to primary and secondary education is $600 million but there is only $428 million in conditional cuts to K-12 education in the FY2011 budget if Proposition 100 is defeated – why is that?
This is not some kind of bait-and-switch tactic as suggested by opponents of Proposition 100. It is simply the result of the choices made from where to cut in the conditional budget –the budget that was prepared and passed in case Proposition 100 fails on May 18. The initial estimate in cuts to K-12 was closer to $600 million however when the state’s conditional budget was drafted there was such an outcry from constituents and stakeholders over the cuts to K-12 that the Legislature responded by lessening the cuts to K-12. Instead they apportioned an additional cut of $107 million to universities, $15 million to community colleges and universities and the balance of $50 million to health and human services. Keep in mind that the contingent budget that would be put in place if Proposition 100 fails includes cuts so drastic that the state would lose millions of dollars in federal matching funds. This loss of federal funds would far outweigh the savings to the state from the cuts. If Proposition 100 fails, the legislature will likely return to address these issues regardless of the conditional budget. If Proposition 100 is approved the beneficiaries will be education, public safety and health and human services.
What does Proposition 100 mean for the economy of Arizona?
A new study by researchers at the Economic and Business Research Center at the University of Arizona finds that a yes vote on Proposition 100 would save more than 13,000 jobs and preserve more than $442 million in federal matching funds for Arizona. For more details and a link to the study, go to our post Passage of Proposition 100 Will Save 13,000 Jobs, UA Study Predicts.
Education is inextricably linked to a healthy Arizona economy. In order to attract businesses to Arizona, the state must provide a strong public education system. If these drastic cuts are made, companies may not only fail to relocate to Arizona–they may leave. These cuts may also imperil Arizona’s military bases. Many civilian jobs already remain unfilled at bases due to the lack of qualified workers. In addition, military families may choose to avoid a state with diminished funding for education. See Presidents of DM-50, Ft. Huachuca-50 & Fighter County Partnership Pen Letter to Gov. Brewer about Education Cuts.
Why am I hearing that’s Proposition 100 is really an 18% increase?
The 18% refers the increase in the current tax rate of 5.6% to the proposed rate of 6.6% (if Proposition 100 passes). That is a simple mathematical difference of 17.85%. What opponents of Proposition 100 have done is spin that to create the perception that the increase is really 18 cents on the dollar. Proposition 100 is a one-percent sales tax increase or one-cent on each dollar spent–ONE PENNY! If you purchase a DVD player for $100 you would pay an additional $1 not an additional $18.
Will money raised by Proposition 100 be used to pay for corporate tax cuts?
Money raised by the one-cent sales tax increase is mandated to go to education, health and human services and public safety. While a corporate tax cut is being discussed, the latest information we have is that it has been significantly reduced in scope and the governor is threatening to veto the corporate tax cut if it overlaps with period of the sales tax increase (i.e. it cannot begin until after May 31, 2013).
Will Arizonans pay higher property taxes if the temporary sales tax is not passed?
If Proposition 100 does not pass, Arizonans could pay more in permanent property taxes. Why is that? The Department of Corrections will shift prisoners to county jails, which do not have the capacity right now to house them. Counties will have to increase property taxes in order to fund new jail cell construction.
Why is Proposition 100 important to our senior population?
Arizona seniors have a stake in education too. The link between education and economic growth is key to the future of our state and no one understands that better than our seniors who have seen the economic benefits of education throughout their lives. Moreover, if Arizona fails to fund quality public education, our professionals–doctors, lawyers and accountants–may leave for states that provide better educational opportunities for their families. High-quality education also correlates to higher property values and lower crime rates. Seniors will also benefit from the one-third of the temporary sales tax devoted to public health and safety. No one wants to see the early release of convicted criminals.
Who supports Proposition 100?:
This proposition has a broad spectrum of bi-partisan support throughout Arizona. For a list of corporations, businesses, advisory groups and citizens showing their support, visit here.
What can you do?
- Register to VOTE and apply to receive a permanent early ballot. Click here for links to your county board of elections.
- Early voting begins on April 22, 2010; the last day to request an early ballot is May 7, 2010.
- Stay informed: Sign up for our newsletter.
- Talk to your family, friends and neighbors about Proposition 100 and its importance to the economic future of Arizona. To download a version for distribution, click Proposition 100 flyer.
- Go to our Proposition 100 Tool Kit: Everything You Need to Get the Word Out in Your Community
Downloadable PDF Proposition 100 Fliers:
In English: Proposition 100 Flyer
In Spanish: Proposition 100 Español
- Check out the debate
On April 11, 2010 Arizona Public Media hosted a Proposition 100 Debate/Panel Discussion called “Proposition 100 Fix or Folly: The Pros and Cons of Sales Tax Measure to Fix Arizona’s Budget Shortfall.” Below is a feed of the 60 minute debate represented by both sides of the issue.
* COMMENT POOL / MODERATOR UPDATE *
We all hear conflicting information about Arizona’s tax rates, and some of the more common misconceptions have been repeated in this comment thread.
We hope that people who are interested in this issue will look beyond the sound bites. If you have questions about our state tax rates or would like to verify claims that you have heard about Arizona tax levels, we recommend the following resources:
- Riding the Fiscal Roller Coaster: Government Revenue in Arizona, 95th Arizona Town Hall, November 2009
- The Tax Burden in Arizona, ASU Office of the Economist
- Tax Foundation – Conservative tax watch-dog group. Recent articles on Arizona that can be found on this page include:
- Arizona’s State/Local Tax Burden Below National Average
- Arizona’s 2010 Business Tax Climate Ranks 28th
- Arizona’s Individual Income Tax System
- Arizona Sales and Excise Taxes
- Arizona Property Taxes Comparatively Modest
- Federal Tax Burdens and Expenditures: Arizona is a Beneficiary State
- Arizona General Fund Spending as a Percent of Arizona Personal Income, Joint Legislative Budget Committee (JLBC)
- Retirement Living, Tax Burdens by state.