Prop 204 is only the beginning

| October 16 2012

By Republican Victory Fund

It began innocently enough.

In 2009, faced with an unprecedented budget crisis, Governor Jan Brewer began pushing a temporary one cent sales tax increase, of which two-thirds of the revenues generated would fund K-12 education and the other third would fund health and public safety.  The sales tax hike would automatically repeal on May 31, 2013. It was supported by a wide variety of business, education and union interests as a temporary solution to a temporary crisis, and passed overwhelmingly by the voters in 2010.

Then, thanks to the Republican leadership, the budget was balanced with no gimmicks and $450 million was set aside in the rainy day fund to guard against future emergencies.  The budget crisis was resolved, and the coalition that supported Prop 100 was content to let the sales tax rate go back down to where it was before.

Except of course, for Arizona’s largest teachers union, the Arizona Education Association.  The AEA quickly abandoned any pretense of supporting a “temporary” sales tax hike and got to work on a far more ambitious proposition for 2012, one that would keep Arizona’s sales tax the second highest in the nation, handcuff the Legislature from being able to effectively manage its own budget, and send hundreds of millions to school districts without any standards or accountability requirements.  As the Goldwater Institute noted, only 10 percent of the money that schools would receive as a result of the tax hike would be tied to any outcome.

To those that have followed the AEA, and their parent organization the National Education Association (NEA), this came as no surprise.  The NEA has been quietly pushing an agenda for years to dramatically raise taxes across the country on the state and local level to subsidize the education bureaucracy at the expense of the classroom.  They call it Taxes, Economic Development, and Funding – or TEF.

TEF is essentially a national, aggressive, public relations campaign by the NEA and their state affiliates to facilitate class warfare, and push the notion that the “rich” (AKA small business owners) and corporations are not paying enough in taxes.  Any and all business tax breaks are to be called “loopholes” to imply they are cheating the system.  The term “fair share” is to be used repeatedly to reinforce this charge (its a “bell-ringer”, they claim).  The NEA also warns that “raising taxes on the wealthy by 1%” receives strong support in polls, but is less favored in discussion groups. In other words, the more voters learn about the economic consequences of taxing businesses out of existence, the less they like it. So best to stick to simple cliches and sound-bites about saving the children.

In other words, in a state like Arizona, in which the legislature has a two-thirds requirement to raise taxes, a campaign like TEF is tailor-made for the referendum process – which is exactly what we are seeing here today.  The state director of the AEA and Democrat candidate for Senate, Janie Hydrick, has made this a top priority.  She recently offered a presentation on how to promote TEF using the same themes of “fairness” often preached by the NEA at the national level.

Should Prop 204 pass in November, the AEA will certainly celebrate their victory in convincing Arizonans to permanently raise their own taxes on everything they buy without regard for how their tax dollars are spent. But make no mistake, they will be emboldened like never before, and preparing their ballot initiatives for 2014 before the party decorations come down.  For those that have studied the TEF agenda, this is a scary thought indeed.

The NEA believes ”Arizona personal and corporate income tax responsibilities are comparatively low” and that “revenue can be significantly increased by increasing the relatively low personal (4.5%) and corporate (6.968%) tax rates.” They note that requiring the traditional three-factor formula would likely raise “substantial additional corporate tax revenue.”  The union also says that “Arizona could also raise additional revenue by levying its sales tax on all food purchased in the state” and also hike its alcohol taxes. Remember, this would all be on top of the second highest sales tax in America should Prop 204 pass.

Piece by piece, proposition by proposition, this is their ultimate agenda – and there is no better way to stop them than to defeat Prop 204. If you know someone who is leaning towards voting for it, talk to them about the lack of accountability, and how little of that money would ever find its way to the classroom.  Explain the divisive nature of the union campaign, which seeks to stroke class envy and resentment towards the small business owners who are trying to navigate the economic turmoil and create jobs.  Let them know that a huge permanent tax hike, with no oversight and unsustainable mandates, would be just the beginning.

Three weeks to go. Let’s get to it.
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