Arizona voters defeat permanent sales tax increase

2012-11-06T20:28:00Z 2012-11-06T21:28:53Z Arizona voters defeat permanent sales tax increaseBy Howard Fischer, Capitol Media Services Arizona Daily Star
November 06, 2012 8:28 pm  • 

PHOENIX — After a barrage of last-minute advertising, Arizona voters  rejected a proposal to create a permanent one-cent sales tax surcharge to fund education and other issues.

The defeat came after Phoenix-based Americans for Responsible Leadership donated $900,000 to the campaign against Proposition 204. But it turns out the money originated from out of state sources linked to conservative causes.

"Before the dark money started pouring in, our polling was very, very high,'' said Ann-Eve Pedersen, organizer of the Quality Jobs/Quality Education initiative. She said all that funding was used to "confuse people.''

At one point, Pedersen said, she was battling rumors that some of the proceeds, about $1 billion a year initially, would be used to fund abortions.

The real problem, she said, was convincing people this was not a new tax.

The measure would have made an existing tax permanent. The current one-cent surcharge approved by voters in 2010 will self-destruct on May 31. And that money, while sold to the voters by Gov. Jan Brewer as helping save education and public safety, really went into the state's general fund to prevent deeper cuts due to the recession.

But 204 proponents crafted it so the additional penny on the state's 5.6 percent sales tax base would not kick in until June 1.

Pedersen said voters should have thought of it as an "extension'' of the current levy. More to the point, it would have meant no change in the current 6.6 percent rate.

She said, though, that anyone looking at the description of the measure on the ballot would not realize that.

"It looks like a brand new tax,'' she said.

A majority of the proceeds from that tax were earmarked for K-12 education. But there was also money for everything from health care for the children of the working poor to road construction.

Foes used that fact to argue against the measure, saying it was designed to fund special interests. And it did not help that the lion's share of the financing for Proposition 204 came from contractor groups whose members would benefit from getting $100 million a year for construction projects.

Pedersen, however, rejected any suggestion that the measure would have done better with a simple education funding plan.

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