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 contracts."
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.