2 tax increase measures may be on the ballot in November

Arizona voters may have the opportunity to choose between competing tax increase measures to boost school funding in November.

A proposal backed by some Republican lawmakers to boost a dedicated sales tax from 6/10 of a cent to a full penny is set for its first hearing Tuesday. If the full Senate and the House pass Sen. Kate Brophy McGee’s referral it will appear on the ballot.

Brophy-McGee said the proposal would boost yearly funding for schools, community colleges and universities by about $450 million.

A similar ballot referral died last year because of a lack of support from many Republicans who oppose tax increases. Minority Democrats also opposed the measure. Brophy McGee concedes that she faces an uphill climb in the Legislature.

“But I think this would work, and we’d get the votes,” she said.

The second proposal, a voter initiative backed by education advocates, is set to move to the signature-gathering phase after a nonpartisan review by the Legislative Council. That proposal would impose a 3.5% income tax surcharge on individuals making above $250,000 a year or couples earning more than $500,000.

It would raise about $940 million a year, with half devoted to raises for credentialed teachers, 25% to boost wages for support staffers like cafeteria workers and bus drivers, and the rest for initiatives such as teacher training and vocational education.

Supporters who announced the initiative earlier this month need to collect signatures from 237,645 registered voters by July to put the question on the 2020 ballot.

Brophy McGee said her sales tax increase is a much better alternative, arguing that a tax on high-earners would crimp the economy and trigger an exodus of the very rich from Arizona.

“Everywhere it has been tried, and it has been tried in a lot of places, in the bluest of blue states, the targeted individuals, people being taxed, make other arrangements,” she said.

If Brophy McGee manages to navigate her measure through the Legislature, she believes voters will see “it’s a better alternative.”

But Joe Thomas, president of the state teacher’s union that is backing the initiative, said the sales tax increase just doesn’t do enough, and that Brophy McGee’s rich flight and economic harm arguments doesn’t hold water.

“It’s not backed by any data, and what we are trying to do is to create a public school system that will attract families and businesses to the state,” he said.

“This raises considerable amount of revenue so we can address the No. 1 issue facing our students and schools, which is the teacher crisis,” Thomas said. “A new 4/10 of a cent sales tax is not enough revenue to address our No. 1 issue facing our students and schools. It will not put a dent in the difficulty that schools have in hiring educators.”

Arizona schools have struggled for years to fill vacancies, in part because of low pay. Teachers statewide went on strike in 2018, leading Republican Gov. Doug Ducey to back a 19% pay increase over three years. The Legislature is expected to fund the final phase of that plan this session.

Thomas said both measures may pass if they make the ballot, but he suspects Brophy McGee will have a tough time getting fellow Republicans to back her tax increase plan in an election year.

“I think that they will see that ours is voter protected and has a more significant impact,” Thomas said of the state’s voters. “They’re certainly going to support ours. I don’t know if they’ll support a sales tax if addition to that, but we’ll see.”

Ducey has touted increase school funding in recent years, and has repeatedly said he opposes new taxes for any reason.