Governor Ducey made the right decision vetoing HB2685, the Maricopa County transportation sales tax increase that was forced through the House and Senate during the final days of the legislative session.
But the reality is, it never should have gotten to his desk.
HB 2685 typified everything that is broken at the Capitol these days: a swampy political culture built around cronyism and backroom deals, legislative leadership pushing major policy through despite overwhelming opposition from their own caucus, and a complete breakdown in statesmanship, evident by the fact that most Republican lawmakers that supported the bill never actually read it or the MAG transportation plan that underpinned the legislation…
State taxpayers should not be bailing out a broken Maricopa Association of Governments (MAG) plan. But that’s exactly what lawmakers are doing in the recently enacted Arizona state budget. That’s right. Your elected leaders just passed a budget that includes hundreds of millions of dollars for road projects—all being paid for with your tax dollars. (You can see for yourself on pages 9-11 right here.)
At first glance, that probably doesn’t seem like a big deal. After all, it makes sense for tax dollars to go toward necessary road projects. But the problem is that these road projects are supposed to be paid for by the Maricopa County Prop 400 regional plan that was assembled by MAG…
And while it’s disappointing that taxpayers were forced to pay thousands of dollars to defend this illegal tax scheme in court, the Pinal County Board of Supervisors will now have to end the collection of this tax and issue refunds to aggrieved taxpayers.
A tax on retail sales below $10,000
This all started in 2016 when Pinal County officials began turning the political wheels to send a $640 million tax increase to voters to fund a wide array of transportation projects throughout the region.
It’s not every day that one political party would seek to find a way to get more of its opponents to vote. But this is 2022, and apparently some Republican lawmakers just can’t help themselves.
Earlier this week, the Senate Transportation and Technology Committee unanimously approved SB1356. This bill is a tax increase that follows the expiring Proposition 400, a transportation tax of half a cent that was approved by voters in 2004. The plan itself is a complete boondoggle. If passed and signed into law, most of the money would go to transit and pet projects. (You can read more about that here.)
But one part of this bill is a total disaster. And anyone who considers themselves to be conservative should be outright concerned that Republican lawmakers not only approved the bill, but two of them actually sponsored it.
Maricopa County residents may be called to a vote this November to determine the continuance of a transportation tax, according to a bill approved unanimously by the Senate Transportation and Technology Committee on Monday. The bill, SB1356, was described by its proponents as an emergency measure and not an additional tax for constituents.
SB1356 would be considered an updated extension to Proposition 400, a voter-approved transportation tax of half a cent — up to ten percent of the state transaction privilege tax. This latest legislation would have the Arizona Department of Transportation (ADOT) collect an advanced version of the 2004 transportation tax beginning January 1, 2026, when Proposition 400 sunsets, and lasting 25 years; in addition to collecting at a rate up to 10 percent of the state transaction privilege tax, the new tax would collect at a rate up to 10 percent of the jet fuel excise tax rate and the energy consumption rate for customers subject to use tax equal to the state transaction privilege tax.
However, Arizona Free Enterprise Club Vice President Aimee Yentes asserted that the tax was, in fact, an increase because the previous one was set to expire. That wasn’t Yentes’ biggest contention with the bill, however, calling it “grossly unaccountable to taxpayers” based on the language and true layout of funds allocation.
Prior to Yentes’ comments, Glendale Mayor Jerry Weiers and Mesa Mayor John Giles insisted in their presentations that the bill contained many compromises which left none of its creators overly pleased. The language of the bill tells a different story. Yentes declared that the bill relies on nebulous terms when eliminating the previously-established 67 percent of funds for freeways and roads to “virtually zero” by consolidating three funding buckets into two focused on major arterial streets as well as undefined “regional programs” and “implementation studies.” Ultimately, Yentes explained, that language assures that funds may be siphoned to virtually anything: bike paths, trails, and even public service announcements to encourage more walking.
“We cannot stress enough that the way this bill is drafted, zero percent of the funds have to be spent on roads and freeways. That is a big backdoor where all of the money can just go to God knows what,” said Yentes.
Yentes warned that SB1356 was likely the largest piece of tax policy to come before the legislature in several decades. Yet, Yentes pointed out that these private groups and local leaders wanted to have the legislature pass this bill without questioning it.
“I’m a little dismayed because I keep hearing almost a lamenting that this policy has to go before the legislature. What I’m hearing is that the insiders have already brokered this deal, it’s fully baked, it’s done with, and your job is to just push the green button. Quite frankly, I think the legislature has a very important role to play in authorizing this legislation,” said Yentes. “I think that you guys represent a more accountable body, even more so than the cities and towns — I say that on behalf of sitting on a city council — and this process is a more transparent one.”
Weiers claimed during his presentation that those opposed to the bill decided not to engage throughout the three years they spent developing the bill, warning that those who change the bill were “monkeying around” and would cause it to “blow […] up.” Yentes asserted that wasn’t true, that this bill was the first some were hearing of this intended tax.
Yentes also criticized that money would be pulled from the roads fund to “basically rig the election” on the subject, by requiring election offices to mail out publicity pamphlets about the tax. She added that it wasn’t comforting that the creators of the bill included their own ballot language rather than allowing for independent creation, which she called “egregious.”
That wasn’t the worst of it, according to Yentes. She lambasted the drafters for setting aside unlimited funds for political consultants, lawyers, election officials, information to voters about the tax, and assistance for conducting the election.
“In effect, the tax extension will function as a multimillion dollar get-out-the-vote effort paid for by taxpayers to drive supporters to the ballot box in support of the tax. It’s kind of like the new twist on Zuckbucks, I guess,” said Yentes.
Majority Leader Rick Gray (R-Sun City) insisted that the legislature has a duty to address potential concerns and tweak the bill accordingly. State Senator Sine Kerr concurred, indicating she had asks of her own.
“As we’re looking at the negatives, we’re not trying to derail — no pun intended. We’re not trying to just be a problem, a bump in the road, but I do think it behooves us as legislators to look at all the opinions. If there’s a way that we can, again, refine and develop and get consensus on that so that we don’t sabotage it but improve it, I think that’s necessary,” said Gray. “We just want to make sure we get the best plan possible because it will last 25 years.”
Giles told the committee that this bill wasn’t their “only chance to bite at the apple.” He warned that the county’s resources were dwindling and growth was only increasing as they spoke. Giles said that their county could address immediate needs, such as the freeway traffic congestion and extend State Route 24 in Pinal County. He concurred with Gray’s point that the bill would be the key to finishing State Route 30.
“We just literally cannot entertain the idea of stopping investing in transportation at this time,” said Giles. “[This bill] will be Maricopa County’s gift to the state, frankly.”
In response to a question from State Senator T.J. Shope (R-Coolidge) about whether the bill would bring more tourists and visitors out of Phoenix to areas like his, Giles confirmed and added that the bill wouldn’t penalize non-Maricopa County Arizonans through revenue-gathering initiatives like tolls. Giles added that they’d essentially made the impossible happen, likening their work to fitting 20 pounds of flour in a 10-pound sack.
State Senator Rosanna Gabaldon (D-Tucson) requested that they consider including trucker rest stops in their bill; Giles said her request wasn’t mutually exclusive. Shope further questioned whether there would be definitive consideration of truckers, especially in light of President Joe Biden’s supply chain crisis.
Giles insinuated in his response that Gabaldon and Giles were siding with groups that were attempting to prioritize their special interests. He noted that the trucking industry, specifically Swift Transportation, had a seat at the table for the past three years in developing this bill and ultimately voted in favor of it. Only recently did they reportedly rescind their support.
“My understanding is that the trucking industry has asked for 10 percent of this with really no specific plan as to how that would be spent,” said Giles. “This is an idea that is a wonderful idea that deserves merit, deserves to happen; but if everyone who contributed to this plan decided now that, ‘Oh wait, I’m now king for a day and I can withdraw my support and get my priorities put back in here after we’ve gone through a lengthy negotiation.’ That’s not a constructive way to going forward. That’s not how this body could get anything done.”
Arizona Trucking Association President and CEO Tony Bradley clarified that not all trucker groups agree with or speak for one another, saying he doesn’t speak for Swift Transportation. He argued that the bill wasn’t feasible.
“Blow it up and put it back together for something that works,” said Bradley.
Arizona State Mine Inspector Paul Marsh issued support of the bill and agreement with both Weiers and Giles’ presentation. Marsh insisted that the bill would ensure efficient transportation required to deliver needed items to customers and producers.
“With the current state in which we have traffic in Phoenix, without having additional infrastructure this will affect the ability to move products within the city and within the county,” said Marsh.
State Senator Tyler Pace (R-Mesa) responded that there was nothing stopping their legislature from tackling the other problems outside the bill, like truck parking. He insisted the senators should flip their concerns into budget bills rather than modifying this bill.
“Everything that we change in this bill changes something else,” said Pace. “We can fight all day and say we can change some, or we can say, ‘You know, that’s really important. I’m going to make that my budgetary ask for the general fund, because I think we should do that. I think we should expedite that plan.’”
After the committee approved the bill, Pace congratulated the members for their bipartisanship.