Prop 100 Passed – Now What?


In a 2-1 vote that was largely expected, Arizona passed Proposition 100.  It wasn’t a huge surprise at all considering proponents spent over two million dollars lobbying for its passage.  In comparison, whether for apathy or lack of disagreement with the sales tax (likely the former), opponents raised a nominal thousand dollars.  Planned to begin on June 1, 2010, Proposition 100 will raise the Arizona state sales tax by 18%.  Though it sounds like hefty increase (and it is), supporters posit that it is “merely” a one-cent increase over the existing sales tax.  That is also true; the sales tax is increasing from 5.6% to 6.6%.

For the time being, state employees can breathe a sign of relief; they are able to keep their jobs.  Teachers and other employees that had been laid off may be rehired.  For those dependent on a state salary or on state services, this is a welcomed relief. 

At the very least, Arizona will hopefully be able to right its financial ship.  I am leery of raising taxes, and it is certainly not the norm that the biggest proponent to raising taxes be a Republican governor.  At the same time, I understand that governor Brewer did inherit much of this debt from Janet Napolitano (who was appointed head of Homeland Security).  This does not mean I have experienced a change of heart regarding Proposition 100; I haven’t.  And like I mentioned in the post yesterday, throwing money at our financial woes is not a viable solution to a systemic spending problem.

The decision to Prop 100 did not relieve the state of its obligation to make hard budget decisions, but it did help mitigate the consequences of its financial irresponsibility.  It’s like touching a hot stove, it’ll burn your hand.  That’s what happens when you touch hot stoves.  Likewise, over spending leads to drastic cuts.  Passing Prop 100 is akin to putting on an oven mit and then touching the hot stove.  You feel it, but it’s no where near the effect of touching the skin to the burner.   We can debate the pros and cons of each method, but it’s clear where I stand.  If I touched the hot burner once with my hand, I learn my lesson.  Touching it with a mit, maybe not.

Regardless, this tax is (supposedly) temporary and it will be automatically repealed in three years.  Again, lots can happen between now and then.  So, the goal now is it still to cut programs and reduce spending such that three years later, Arizona can still function without the additional 300 million in revenue.  I’ve heard talk that to drop off in revenue, Governor Brewer will not renew tax incentives given to businesses (but that isn’t this post).

Though the specifics will still be worked out, the “wish-list” projects will be scratched from the drawing board – and rightfully so.   Do we need more parks or playgrounds?  Do we even need the latest and greatest technology labs in schools?  Jobs will survive, but there certainly will be fat trimmed from the general budget.  I’m still of the opinion that we need more than a “trimming.”

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Do you support a soda tax?

With the debate surrounding health care reform (Question: How do we pay for it?), another possibility to bettering the health of this nation is warranting a second look. (Answer: the soda tax). Certainly this possibility comes as bitter news to the sugary soda industry but lawmakers suggest that a nominal tax would help offset the trillion dollar price tag attached to universal health care.

I am favorably disposed to a soda tax because harmful actions should be discouraged; e.g. over-consumption of sugar.

As Derek Thompson from The Atlantic explains,

The added benefit of a sin tax is that by taxing something you consider harmful, you can win in two ways. If you don’t discourage consumption of the taxed good, revenues go up. If you do discourage consumption of the taxed good, then congratulations, you’ve reduced the sin you considered harmful in the first place. Considering the enormous impact of obesity on soaring health care costs, that would be a very good thing indeed.

Now, I do not believe it is the government’s role to dictate what we eat, how much we eat, and when we eat. I’m a firm believer in personal responsibility for my eating habits. However, I do believe the government has an interest in protecting the health of its citizens by passing regulations or taxes consistent with such goals.

And considering the enormous impact obesity impacts health care costs, it seems reasonable to tax those responsible for incurring such expenses.

I’m certainly curious to hear what others think. Why do you (or do not) support a soda tax?