May 31, 2013 marks the end of the temporary one cent sales tax that voters approved in May 2010 when they overwhelming passed Proposition 100.
Credit Gov. Jan Brewer for making what at the time was a politically risky move to strongly back the sales tax measure. The naysayers at the time weren’t hard to find. Opponents said that there was no such thing as a temporary tax, with others doubting whether the funds generated by the sales tax would actually be routed to the state’s education system.
Gov. Brewer proved them all wrong, and Arizona is better for it. Remember where we were back in 2010. As I’ve said before, we had a structural deficit that was about the worst in the nation. We had just lost 300,000 jobs in the Great Recession. We were essentially California with a smaller economy and drier weather.
So the governor set ideology aside, rolled up her sleeves and got to work. The sales tax passed and the state staved off insolvency. The governor that November won re-election going way, confounding those who earlier that year had written her political obituary.
But the win at the ballot also was important because it paved the way for two major economic competitiveness packages in the 2011 and 2012 legislative sessions. If it’s possible to have two once-in-a-generation legislative victories in concurrent years, Gov. Brewer and the Arizona Legislature proved it could be done. The Arizona Chamber of Commerce and Industry was the leading business community advocate urging passage of Prop. 100 and the jobs bills that followed, standing shoulder to shoulder with Gov. Brewer and a Legislature that understood it would be by growing jobs that we would emerge from the economic downturn.
So three years on we now have an Arizona that was just ranked as having the sixth best business environment according to Chief Executive Magazine due the passage of business tax cuts, a reduction in the assessment ratio, a tax environment friendly both to manufacturers and service providers, an Arizona Commerce Authority that is leading Arizona’s efforts to attract and grow more jobs, a rainy day fund with about $450 million in it and education funding that is increasing with a focus on reform.
Despite this success, we came this close to it all being derailed by last fall’s Proposition 204, which would have permanently extended the sales tax, but by replacing the simple Prop. 100 with a Washington, D.C.-style porked up spending measure with no end. Gov. Brewer and the Chamber strongly opposed the tax’s extension, working together to galvanize the business community’s opposition to the measure. The backers of that proposition touted the dollars that would go to education, but it was so poorly crafted that there was no accountability of how the tax dollars would be spent. Thankfully, voters rejected it overwhelmingly.
And this is where state Treasurer Doug Ducey deserves credit for his leadership in the campaign against Prop. 204. Before he came on the scene, it looked like 204 would cruise to victory, but the treasurer prosecuted an expert case against the tax extension and the temporary tax stayed temporary.
Gov. Brewer deserves credit for doing the right thing instead of the easy thing. Prop. 100 was a promise made to Arizona, and now it’s a promise kept.
Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry