Arizona Governor Promises Not to Extend Sales Tax Increase

In her January 9 State of the State address, Arizona Governor Jan Brewer (R) vowed to end the state's temporary one-cent sales tax increase: "The voters were promised it would be temporary. Many doubted that. Well, I gave my word to the voters . . . So, I am here to say: This tax will end on my watch!"

According to Governor Brewer, Proposition 100--the one-cent sales tax increase, scheduled to end in 2013--was instrumental in balancing Arizona's budget. In fact, Arizona now has a budget surplus a year-and-a-half after making some of the nation's largest budget cuts. In the Governor's words, "Arizona has been saved."

Of the revenue generated from Proposition 100, two-thirds goes to public primary and secondary education and one-third goes to "health and human services and public safety purposes." Despite the positive results thus far, Governor Brewer pledged to refuse calls from Democrats and education supporters asking voters to extend the tax past 2013. However, according to her policy agenda, she promises to "remain part of ongoing discussions about proper funding for education."

Arizona is not the only state facing education funding issues and using sales tax to improve the conditions. Read about Washington state's struggles here....

The effects of the one-percent sales tax increase on Arizona's economy, as well as its ties to education, highlight the central role that sales tax plays in state policy, politics, and economics.