- Slug: BC-CNS-Service Tax. 750 words.
- Photos and captions below.
By REBECCA SPIESS
Cronkite News
PHOENIX – A group of Arizona Realtors on Tuesday delivered more than 400,000 signatures to the state Capitol in support of a ballot measure to constitutionally prohibit the state from imposing a sales tax on services.
The group, Citizens for Fair Tax Policy, which was created by the Arizona Association of Realtors, says it opposes raising taxes on seniors, parents and anyone who needs child care, car or house repairs, construction projects – and real-estate work.
However, Arizona generally has no sales tax on services. Imposing a service tax to fund education needs has been suggested by teacher’s groups, but no service-tax proposals were introduced in the Legislature last session.
Citizens for Fair Tax Policy began collecting signatures March 9. According to the Arizona Capitol times, the group needed to collect 225,963 signatures by July 5 to make the November ballot. They reached 406,000 by Tuesday, July 3, depositing 72 boxes of signed petitions at the Capitol the same day.
Holly Mabery, chairwoman of Citizens for Fair Tax Policy, spoke afterward.
“We want to protect Arizonans from being taxed on everything from … getting repairs on your home or your car, going to your hairdresser, taking your dog to the vet,” she said. A service tax would damage the economy, she said, adding “it would make some small businesses almost unattainable.”
However, a service tax would not impact every taxable service, and each proposal would be tailored and debated, like every bill passing through the legislature.
Mabery said Arizonans had made their stance clear through their signatures.
“The citizens of Arizona are making this decision,” she said. “If they so chose, (they) could reverse it.”
A service tax has been discussed as a funding source for K-12 education and to support the RedForEd movement’s call to raise teacher pay.
The Arizona Federation of Teachers in Arizona, or AFT Arizona, supports what they call a “three-pronged” approach to funding teacher pay, which would increase property taxes, sales taxes and income taxes to collect required revenue.
Schoolteacher Ralph Quintana, president of AFT Arizona, says this moderate approach would best suit Arizona’s electorate.
“Whether people like it or not, you’re going to have to increase taxes to increase revenue,” he said. “If anybody wants to compromise and talk about what those rates and those percentages are, then I’m all for a conversation. But to say ‘no’ to increases in taxes of any sort, that’s not realistic to the funding needs of Arizona’s public.”
Quintana was skeptical about the Realtors’ anti-tax proposal. “We knew this was going to happen,” he said, adding that poor schools lower property values.
Mabery said her group is “pro-teacher,” but not at the expense of vulnerable groups.
“If I look at our teachers, who are barely able to make ends meet going to teach in a classroom, they’re having to pay for child care for their own children, and now they’d be taxed on that,” she said. “I’m pro-teacher, but on the backs of our seniors and those who are less fortunate, it just doesn’t make sense. So I think there’s a better way to do that.”
Kent Simpson, treasurer of Citizens for Fair Tax Policy, called the group’s approach proactive and necessary.
A service tax “is just opening up a brand new category that doesn’t need to be up,” he said. “We’re seeing the results in other states that have already enacted something like this.”
Mabery specifically cited online retailer Amazon halting construction of a building in Seattle after a service tax was proposed. She called it an example of a service tax forcing “small businesses to pack up and move out.”
However, according to CityLab, an investigative urban news outlet, the work stopped after a “head tax,” or a tax on each worker in the company, was proposed. Additionally, the tax would only impact Seattle’s largest three companies, and the revenue would go to affordable housing and homeless services.
During the press conference, a soft-spoken woman in the crowd questioned Mabery.
“If the economy goes bad in the future, why would you take that (possible source of revenue) away from future generations?” she asked. “Nobody likes taxes, but sometimes it’s the only way to raise money.”
Arizona Realtors have proven to be a powerful group among voters. According to the Arizona Republic, they effectively stopped a real-estate transfer tax in 2008, with 76 percent of voters against it. It was another preemptive strike: Arizona had no such transfer tax.
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