Gov. Jan Brewer urged East Valley business and government leaders to support the Proposition 100 sales tax increase that will appear on the May 18 ballot, saying it is the only way to avoid more painful cuts to education, health care and other state services.
Speaking at a gathering Tuesday sponsored by the East Valley Partnership and the East Valley Chambers of Commerce Alliance at Mesa Community College, Brewer said the 1-cent, three-year sales tax increase is necessary to maintain "core" functions of state government until other revenue revives.
"Sometimes doing the right thing means doing the hard thing," she said.
If approved by the voters, the 1-cent increase would bring the state sales tax to 6.6 cents on every dollar of taxable items sold. The hike would take effect June 1.
The Arizona Legislature has approved a budget for the next fiscal year that makes $1.1 billion in cuts, but the state still faces a deficit of $1.5 billion, much of which would be filled if the sales tax increase is approved.
If the measure fails, further cuts will be needed to education, health care and public safety, which collectively account for 85 percent of state spending, Brewer said.
"We need to give the people the facts, and I believe the voters will do the right thing ... so that we don't have to do more damage (to state programs)," Brewer said.
Responding to conservative complaints that a tax increase would further discourage business during a recession, she said noted conservative Ronald Reagan pushed tax hikes when he became governor of California in 1967, when that state faced similar budget problems.
To skeptics who believe the "temporary" tax could become permanent, she said the proposition is worded so that it would automatically expire on May 31, 2013. However, she said it could be extended if the Legislature at that time decided to continue it.
Several members of the audience interviewed by the Tribune after her speech expressed support for the tax increase with varied degrees of enthusiasm.
Roc Arnett, president of the East Valley Partnership, expressed the strongest support, saying it's necessary to avoid further cuts to the state universities.
"We are particularly keen on education," he said, adding that a strong university system is necessary for Arizona to remain competitive in the global economy.
Charlie Deaton, president of the Mesa Chamber of Commerce, said the chamber probably will urge a "yes" vote on the proposition.
"It's as much a revenue issue as a spending issue," he said. "This will help to not have to cut back any more."
He said Mesa voters have a history of supporting education, even when it involves tax increases, citing successful budget override elections in the Mesa School District.
Chandler City Councilman Jack Sellers applauded the Arizona Legislature for drawing up a contingency budget so voters can see exactly what will be cut if the tax increase fails. The lawmakers have said an additional $428 million annually would have to be cut in K-12 education, $107 million from the universities and $114 million from health care for the needy.
"Voters need to look at that and decide based on that," Sellers said. "I'm very opposed to higher taxes, but I'm not sure there is any other way out."
Gary Pierce, a member of the Arizona Corporation Commission, said he is "not a fan" of tax increases, but he added Brewer has done an "excellent" job of describing the financial bind facing the state.
He expressed doubt the Legislature would extend the tax increase in three years because that would require a two-thirds approval vote in both the Senate and House of Representatives - an unlikely prospect.
"The only way to extend it is to go back to the ballot," he said.