Road tax hike could take $1.6 billion out of Arizonans’ pockets over 20-year span
PHOENIX — Ignoring complaints by a Pima County lawmaker, the state Senate voted Thursday to allow a public vote to not just extend the existing half-cent sales tax for roads and transit projects but to double it.
The 21-8 vote came despite a last-ditch effort by Sen. Vince Leach, R-Tucson, to limit the extension to no more than 12 years.
“Each one of you had a chance to stop it,’’ he told colleagues. HB 2109 now goes to the governor.
Leach noted that allowing the county to raise the sales tax by a full penny would increase collections by about $82 million a year. He said allowing that to go on for a full 20 years would take $1.6 billion out of the pockets of taxpayers over the extended life.
That, he said, is a huge burden on residents of a county where the average per capita income is less than $30,000 a year. Leach is an unabashed foe of the whole concept of an expanded levy. And he even questions how the Regional Transportation Authority is using the cash it generates now from the half-cent tax.
But Leach, unable to quash HB 2109 outright, was left to seek to curtail its scope. So he argued that it makes no sense to be raising taxes to plan for projects that far out.
“Anyone who can tell me what the needs will be in 2040, I have a bridge I’d like to sell you,’’ Leach told colleagues. A 12-year extension, he said, would generate an extra $975 million.
“What this simply says is after you’ve withdrawn almost a billion dollars from the community, let’s hit the ‘restart’ button and see if we shouldn’t go back and see if we still have that need, or if we have needs greater,’’ Leach argued. “Or, if we don’t have the need at all, what a wonderful idea: Let the taxpayers keep their own money.’’
He also said the county and the five cities within it may have other more pressing needs for the revenues that the road tax would be absorbing. And Leach said efforts to do that could be hampered if the half-cent increase for transportation is approved.
“The mayors are extremely worried that it’s going to suck taxing authority and taxing ability away from them for needs that they specifically have,’’ he said.
He cited the problems facing Marana where chemicals have shown up in the water supply.
Leach said he presumes the federal government eventually will pick up the costs of dealing with the issue. But in the interim, he said, the city will have to levy a 0.4 percent sales tax to start the cleanup.
The result, said Leach, is that burden, coupled with an additional half-cent for roads, would take the levy in that town up to 9 cents on the dollar.
No one in favor of the levy spoke at all Thursday, with supporters having locked up the votes beforehand. And while Leach managed to convince several fellow Republicans to oppose the plan, he was unable to pick up the backing of Democrats even with his exhortations that they should be against the plan because of their regressive nature of sales tax, with low-income people paying a higher share of the earnings for that levy than those in upper income brackets.
And a last-ditch pitch failed to change a single vote, leaving Leach frustrated.
“This is capital cronyism coming to the floor of the Senate and we’re going to push it on through,’’ Leach said.
“And we sit here and we say ‘We’re going to let them do it’ because that’s what we should do,’’ he complained. “Yet we’re going to saddle people who are making less than 30 grand in average income with another half percent.’’
Even if the governor signs the measure which is backed by the business community that does not guarantee that there will be an expanded levy. It would require voter approval of two separate measures, one for the higher tax and one for the plan of how to spend it.