Will Arizona Vote for Higher Taxes?

After nearly a year of debate -- and nearly a year of urging from Gov. Jan Brewer -- Arizona lawmakers finally have sent a sales ...
by | February 8, 2010

After nearly a year of debate -- and nearly a year of urging from Gov. Jan Brewer -- Arizona lawmakers finally have sent a sales tax increase to the ballot. From the Arizona Republic:

A divided Arizona Legislature on Thursday sent a temporary 1-cent-per-dollar increase in the state sales tax to voters, setting a May 18 election date.

The 34-25 vote in the state House was a win for Gov. Jan Brewer, who has been pushing for the tax hike since she became governor a year ago. It capped nearly a year of debate over the wisdom of tax hikes to ease budget problems. The Senate had approved the increase Tuesday in a narrow 16-12 vote.

The bipartisan votes were a rarity in the Legislature, where attempts over the previous months to pass the tax referral drew unified Democratic opposition, along with a few Republican dissenters.

This vote really is quite an accomplishment for Brewer. Almost everyone in the Arizona legislature was a member of either of two groups who were disinclined to support the sales tax hike: conservative Republicans, who don't like higher taxes as a matter of principle, or Democrats, who had a political interest in forcing the majority Republicans to be the ones to support the tax hike. As a result, this measure probably only could have passed with bipartisan support, which is ultimately what happened.

Of course, Brewer's accomplishment will be completely hollow if voters don't pass the measure. So, will Arizona voters support a sales tax increase?

It's hard to say. Out West, two other states have voted on tax increases in the past year. California overwhelmingly rejected a variety of temporary tax increases (sales, income, vehicle) last year. Last month, Oregon voters narrowly approved a corporate income tax increase and an income tax increase for wealthy individuals. The question is whether Arizona is more like Oregon or California.

And, that question prompts another question: What determines whether voters support tax increases? I have a few ideas in this regard.

The type of taxes involved. Among the broad-based state and local taxes, the spectrum from most hated to least hated is generally thought to go property taxes, then income taxes, then sales taxes. Homeowners hate property taxes because they have to pay for something that, for most people, isn't earning them any money. Both property and income taxes also are especially visible taxes. If people had to pay their entire sales tax bill once a year, sales taxes would probably receive more voter ire. This dynamic should work in favor of the Arizona tax increase passing.

The ideology of the electorate. Arizona is more conservative than Oregon or California, which should work against the measure passing. Still, the difference is probably smaller than you'd think just from looking at a crude gauge of ideology such as presidential voting. Both Oregon and California have long histories of anti-tax sentiment.

The budget context in which the taxes are proposed. In California, Arizona and Oregon, the context is largely the same. The recession is forcing consideration of deep budget cuts. The higher taxes are intended to reduce the amount of budget-cutting needed. Without that context, tax increases probably wouldn't have stood a chance in any of these states.

Arizona's budget situation is quite bleak -- worse than Oregon's. On the other hand, California's budget situation also was worse than Oregon's and that didn't persuade voters to support the higher taxes.

The extent that elected leaders are trusted to spend money well. This point, I think, is critical. In California, voters overwhelmingly disapproved of both the job the governor and legislature were doing. Powerful special interest influence, missed budget deadlines, persistent partisan feuding -- all those factors contributed to the sense that lawmakers couldn't be trusted. Oregon voters certainly aren't pleased with their elected leaders, but at least the voters don't actively despise them.

It's on this score that I think the Arizona sales tax increase has a good chance of passing. While Arizona has had plenty of partisan and ideological feuding, it doesn't have California's reputation for dysfunction. Plus, the dramatic budget cuts the state is contemplating may send the message to voters that lawmakers only supported higher taxes as a last resort.

Josh Goodman
Josh Goodman  |  Former Staff Writer
mailbox@governing.com  | 

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