Republican governor vetoes tax extension

(The Center Square) – Arizona Gov. Doug Ducey vetoed a ballot measure that could extend a sales tax in Maricopa County.

The measure would ask voters in the county to extend a sales tax to fund transportation projects. It’s known as Prop 400. It added a half-cent sales tax to consumers in Arizona’s most populous county. The tax would fund a $38 billion infrastructure plan backed by municipal leaders. Voters first approved the measure in 1985 and renewed it in 2004. It’s set to expire at the end of 2025 if it’s not renewed again.

The bill Ducey vetoed (H.B. 2685) would have asked voters to extend the tax for another 25 years; it would establish a special election next year to ask voters this question.

The Legislature can choose to override the bill but would have to convince a number of Republicans in both the state House and Senate to change their stance on the tax.

Ducey explained his opposition in his veto message, saying there shouldn’t be an election held in 2023 on the measure and that the state should wait until November 2024 to ask voters.

“The current transportation excise tax expires at the end of 2025, but rather than wait until the November 2024 election to consider an extension, H.B. 2685 would create a statewide special election next spring that would not only require unnecessary costs to administer, but would come at a time when voter turnout will likely be low,” Ducey wrote.

Ducey also took issue with this being a 25-year tax increase instead of a 20-year increase like the previous two measures. He also said that less of this money will go to freeway expansion and that the plan for this measure was developed before the federal Investment in Infrastructure and Jobs Act was passed — a measure that provides states with infrastructure funding

“Arizona must make sound and strategic investments in transportation infrastructure, especially during this high inflationary period and while governments are experiencing surplus tax revenue,” Ducey wrote in the letter. “The State is experiencing a $4.5 billion surplus. Under the current budget, Arizona will invest $1 billion in transportation infrastructure while simultaneously cutting taxes to provide relief for families.”

The Arizona Free Enterprise Club praised Ducey for his veto. It argued that much of the money raised by the tax ends up going to wasteful projects.

“HB2685 was truly a Build Back Broke transportation policy, prioritizing money for little used transit, siphoning dollars from roads for cities to expand bike lanes and trollies, and neglecting the maintenance for freeways and arterials,” the organization wrote in a press release. “This was reflected in the lack of support by a majority of Republicans in both chambers, but especially in the House, with 21 Republicans voting against.

“We commend the Governor for this wise decision and for hearing the concerns brought up by opponents throughout the process as well as thousands of Arizona taxpayers who expressed deep concerns over the poorly drafted legislation,” it added.

Phoenix Mayor Kate Gallego said Ducey’s veto was a political move to garner favor with conservatives for future political endeavors.

“The governor is out of touch and clearly doesn’t trust the people of Arizona,” she tweeted Wednesday. “That’s the only way to explain his veto of HB 2685. The bill would have empowered residents of Maricopa County to extend the current half-cent sales tax for transportation projects. The veto is shortsighted and anti-economic development.”