Prop 100 Sales Tax Increase

I forget exactly when it was. I think it may have been 1999, the last time the state sales tax was increased for education. There were a number of news stories reporting that teachers had to purchase pens and paper for their students with their own cash because the school districts were so starved for money. Such a cynical ploy cured me of any misplaced trust I may have had in the local school districts.

Now it is 2010, and state revenues have plummeted in excess of thirty per cent, taxes must be raised – in other words, it’s time to pimp the school children again. This time the legislature, at the request of the governor, put a proposition to add a “temporary” increase of eighteen per cent to the state sales tax – an additional penny on the dollar. It is called Prop 100, and will be on the May 18, 2010 special ballot. Here’s the official descriptive title:

Temporarily increases the state transaction privilege (sales) and use tax by one cent per dollar from June 1, 2010 through May 31, 2013 for the purpose of funding primary and secondary education, health and human services and public safety.

The amount of the increase is perfect because one can throw the terms “penny”, and “one cent increase” around a lot and it sounds very small indeed. Actually, it is estimated that around $900,000,000.00 will be drained from the job creating private sector in fiscal 2011.
What will this mean for schools? Perhaps nothing, there is nothing in Prop 100 that says the education budget must be increased, only that funds from the tax will be applied to education. They may very well be applied to education, which would free-up money that went to education from other sources, which can then be spent elsewhere. Prop 100 does not make the budget, the legislature does. Tom Jenney of Americans for Prosperity Arizona Chapter was one of the first people to notice this. He ran the idea past a lawyer who confirmed the possibility. This fact is tacitly admitted by proponents who warn that the university system will loose $100,000,000.00 in state contributions if Prop 100 does not pass. Note that the university system is not part of “primary and secondary education, health and human services and public safety.” The $100 mil would be part of that freed-up money I mentioned. So really, it is a general fund tax that is being promoted with imagined threats to children.

Proponents also claim that Arizona per pupil spending is near the bottom of state rankings. In fact, according to the U.S. Census Bureau, Arizona is 48th in per pupil state government expenditures at $6,472.00 as of 2006. That is a fact; it is also a deception. The number and rank refer to state government contributions only, not total expenditures. When you add in other sources of funds, like the federal government, you discover that the total expenditures are over $9,000,000.00 per pupil, and close to the middle of the national pack.

Speaking of rankings, here’s an interesting fact that appeared in a Goldwater Institute press release dated January 27, 2010, “Arizona has an unusually large share of non-teaching public school employees. Teachers make up slightly less than half of on-site staff in public schools, placing Arizona fourth worst among the 50 states and the District of Columbia in teachers as a share of on-site public school staff.” Maybe now is not such a bad time to make some staff reductions while keeping the teachers. Steve Voeller of the Arizona Free Enterprise Club reports, “According to the Department of Education, total state aid to education increased 40 percent from $3.2 billion in 2004 to $4.5 billion in 2008. Student population plus inflation increased 25 percent during that same time.”

Prop 100 is a general fund tax increase which will not balance the budget. It will not save schools from some imagined financial disaster. Propagandists waving signs that say “My Child is Worth a Penny”, and “One Cent Will Save a Teacher”, should be ashamed. Maybe the education establishment should try to deal with the recession like the rest of the adults.

The economy will recover, though that recovery may be delayed by increasing taxes now.