Governor's Plan Calls For 1 Percent Increase
MESA, Ariz. -- Gov. Jan Brewer and state lawmakers are at a stalemate over the governor's proposal to have a temporary 1 percent sales tax increase to help balance the budget.
Brewer met with Republican leaders Monday to try and iron out their differences. The governor has been pushing for a sales tax increase to offset some of the proposed cuts to education and health services included in the budget lawmakers approved last week.
Home TV and Appliance salesman Rob Martin is concerned that a sales tax increase will drive away customers.
Martin insisted the last thing businesses need is for the state to increase prices.
"It all adds up," Martin said. "Any increase would make a big difference with the way the economy is now."
If it happens, just about everything you buy in Arizona will go up in price. Gabriel Abajian of Mesa just bought a $500 refrigerator.
Under the new sales tax plan, instead of paying $40 in sales tax, he'd pay $45. It's money Abajian said he'd have no problem paying as long as it helps balance Arizona's budget and protect education.
"Coming from a family whose parents are teachers I wouldn't mind a 1 cent increase," Abajian said.
An individual earning between $40,000 and $50,000 paid about $718 in sales tax in 2008. If there's a sales tax increase you'd pay around $806 -- a difference of $88.
Kevin McCarthy with the Arizona Tax Research Association doesn't believe Republican lawmakers will agree to a tax increase.
He predicts the issue will be put to a vote in November.
"At the end of the day I think you'll see a referral that will allow citizens to have the final say on whether or not we'll have a tax increase," said McCarthy.