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Arizona Leaders Collaborate to Extend Transportation Tax...But at a Cost

Interstate interchanges aerial view.

In 1985, Arizona voters approved Proposition 400, a half-cent sales tax aimed at funding essential transportation projects. With two successful renewals since then, the tax has played a crucial role in financing major road and freeway initiatives, as well as supporting the light rail system. However, the tax is set to expire soon, prompting bipartisan collaboration between Arizona Republican leaders, like House Speaker Ben Toma, and Democratic Governor Katie Hobbs to place a transportation tax on the 2024 ballot.

The Proposal

The proposed extension would allow voters in Maricopa County, one of the fastest-growing regions in the country, to decide on continuing Proposition 400 for another 20 years. If approved, the tax is anticipated to generate over $1 billion annually, resulting in a total of $21.7 billion.

Importance and Support

Mayors, such as John Giles of Mesa, emphasize the significance of Proposition 400 and its extension. They describe it as the most substantial economic development package in the state's history, funding new freeways in expanding parts of the county and improving existing freeway infrastructure.

Public Opinion

According to a recent poll, 68% of Maricopa County voters support the extension, while only 26% oppose it. This shows strong backing for the tax's continuation.

Cost of the Deal: However, securing the proposition on the ballot came with a cost. Governor Hobbs and Democratic lawmakers agreed to ban cities and towns from imposing rental taxes to facilitate the deal. While this could save renters money, it might result in significant financial losses for large and small communities. Mesa Mayor John Giles laments the loss of residential sales tax and anticipates a $22 million annual reduction in the general budget, primarily impacting public safety funds.

Bipartisan Support and Implications

Despite opposition from some conservative Republicans, the transportation tax agreement passed the House with strong bipartisan support. The governor's office has yet to officially state whether Hobbs plans to sign the legislation. If she does, cities and towns that impose rental taxes could face a combined loss of nearly $230 million each year.

The extension of Proposition 400 is a crucial decision that will significantly impact Arizona's transportation and infrastructure development. With widespread support from both parties and strong public backing, voters in Maricopa County will play a pivotal role in determining the future of this decades-old transportation tax. However, the agreement's cost in terms of rental tax bans raises concerns about the potential financial burden on local communities. All in all, the upcoming ballot presents a critical moment for Arizona's transportation system and its residents.


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