State Capitol News
10:23 pm
Wed May 7, 2008

Governor defends proposed road tax

Phoenix, AZ – Governor Janet Napolitano is defending plans to hike the state sales tax rate to among the highest in the nation to fund transit improvements. Arizona Public Radio's Howard Fischer reports.


The proposal would add a penny onto the current 5.6 percent tax
rate, a levy on virtually everything sold except food and
prescription drugs. That plan is getting some criticism from the
Goldwater Institute which contends the burden should be borne by
those who benefit. In the case of better roads, that would mean
things like higher gas taxes: The more you drive, the more you
pay. Napolitano rejected that idea.

(It doesn't yield enough. Fuel consumption is going down. It
needs to go down as we wean our way from gasoline, foreign oil
and the like. And the sales tax was much steadier and yielded
enough to pay for the transportation infrastructure. And the
voters will get to decide.)

Hiking the tax to 6.6 percent would mean only five states would
have higher rates. But the governor said that's not a fair
comparison.

(I would caution against taking one tax in isolation against
another tax because you really have to look at overall tax
burdens. Even with this overall tax, if we were to increase the
sales tax to pay for transportation for everybody, our overall
tax burden still remains very low compared to other states.)

If approved by voters the tax would raise nearly $43 billion over
30 years to pay for new highways, widen existing roads and fund
various mass transit projects.

For Arizona Public Radio, this is
Howard Fischer.