As reported by the Club last year, Pinal County officials began turning the political wheels to send a $640 million-dollar tax increase to voters to fund a wide array of transportation projects throughout the region.  This new 20-year ½ cent transportation excise tax would be in addition to the existing ½ cent tax for transportation that is set to expire in 2025.

After unveiling the plan, the effort quickly spurred opposition from retailers, home builders, auto dealers and multiple taxpayer watchdog groups. However, instead of taking this as a sign that the community wouldn’t accept their proposal, Pinal officials developed a new plan to try to buy-off their political opposition.

Added to the plan was a special carve-out for purchases over $10,000 from paying the new incremental tax amount, language specifically designed to eliminate opposition from certain businesses.  Only one problem—special sales tax carve-outs are illegal. They attempted to remedy this issue last session with House Bill 2156, but fortunately for taxpayers the legislation was quickly killed by lawmakers and the authority to provide the exemption was not granted.

End of the story? Not quite.

The proponents of the tax hike are moving forward anyway, and have included the carve-out in the transportation plan. Despite their public acknowledgement that this can’t be done, Pinal officials are now citing a Legislative Council opinion to defend their actions. Such an opinion is not legally binding and is heavily questioned by attorneys and tax policy experts. If pursued by the County, it is very likely that this power grab will be challenged in court.

It is pretty clear at this point that the various special interests looking to benefit from the tax hike will do whatever it takes to get it passed. With the vote scheduled for November, Pinal taxpayers should expect a well-funded, glitzy campaign that won’t discuss the insider deal making and highly questionable legal maneuvers that made it all possible.

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The Arizona Free Enterprise Club is a free market policy and advocacy group dedicated to promoting a strong and vibrant Arizona economy.