KGUN 9 On Your SideNewsLocal News

Actions

Yes or no on Prop 126?

Proposition would affect ability to tax services
Posted at 7:12 PM, Oct 16, 2018
and last updated 2018-10-16 22:12:06-04

TUCSON, Ariz. - Politics often focuses on the people running for office--  but it’s important to pay attention to the props too.

The propositions can have a lasting impact on your taxes, your schools and your roads. 

When your car's repaired you pay tax on the parts, but not the labor.  There are a few service taxes but Arizona does not tax most services like the work of a mechanic, the services of a daycare, or maybe a veterinarian.   
       
Prop 126 would change the Arizona Constitution to forbid any new service tax.
        
Conservative business groups, government leaders and labor unions say "no" on Prop 126.

State Senator Steve Farley says, “If people vote on this thing and it's in the Constitution and we realized after the fact that cutting 250 million dollars a year from our public education system is a bad idea. There won't be a thing we can do about it except for suffer or else raise our income taxes or raise any other forms of taxes that that would be able to pay for the services we need and that's not something I want to do."
      
Farley says Prop 126 could cost the schools because state lawmakers decided to renew taxes to support education but under 126 the renewal would be like a new tax and forbidden.  He says the same effect would knock 40 percent out of RTA transportation funds.
       
Realtors have led the movement to say Yes to Prop 126.  They fear taxing services would burden small businesses.
       
Steve Huffman of the Tucson Association of Realtors disputes the effect on schools and transportation.

He says, "We have never taxed services and so we're just trying to make sure that this choice is made by the voters and not the politicians."
      
Both sides agree state law already makes it very hard to add new service taxes.  They disagree over whether lawmakers or the public should have the last word.