In just a few more days, voters in Arizona will decide whether
to make a temporary sales tax permanent. One economist warns it
could cost Arizona 15,000 new jobs.
Proposition 204 would lock in Arizona's current sales tax rate
of 6.6 percent. It was approved by voters in 2010 to help the state
deal with the recession and balance its budget until 2013, when it
is due to expire.
Stephen Slivinski, senior economist with the Arizona-based Goldwater Institute, says anything that was
delayed by entrepreneurs, business owners and or consumers until
after the tax expired now may never happen.
"So there is all this foregone opportunity, foregone
consumption, forgone investment -- that's where the 15,000 jobs
come in, what I call 15,000 potential new jobs," he declares. "It
doesn't mean the economy won't grow, although I think it would
grow faster [without the tax increase]."
Meanwhile, Slivinski has other concerns about Prop. 204.
"What it would do is throw a lot of money at the local school
districts, basically giving them a blank check," he tells
OneNewsNow. "It's not going to necessarily go to teachers per se,
although they say it's going to. It's basically going to go
into the education bureaucracy, and about $100 million of this $1
billion that they expect to generate from this extension of the
sales-tax increase will actually go to building contractors in the form of government
According to the Arizona Republic, some of the political
heavyweights who were on board with the temporary tax in 2010 have
jumped off this year's bandwagon, including Governor Jan Brewer and
many of the state's chambers of commerce. Business executives,
education groups and the Professional Fire Fighters of Arizona are
among those backing the extension.