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Tax Increases Slated for Arizona

PHONIEX -- Arizona voters will go to the polls next month to cast their ballots on a proposed 1-percent increase in the state sales tax.

The state is conducting a vote May 18, for Proposition 100, which would raise the sales tax 1 percentage point from its current 5.6 percent rate. A recent poll of 506 citizens, conducted by a group supporting the tax increase, found 58 percent likely to vote yes on the proposition.

Arizona currently has a budget deficit of $3.5 billion, the worst in the nation, according to the National Conference of State Legislatures. That deficit represents 24.2 percent of the state's general fund, outpacing second-worst New York by 20 percent.

Even if the sales tax increase is approved, service cuts are almost inevitable. For example, the governor and Republican legislators recently agreed to consider elimination of full-day kindergarten classes.

On the city level, taxes are also likely to rise, even on food purchases. On April 1, Phoenix began collecting a 2-percent tax on food items -- something it hasn't done since the early '80s. Phoenix shoppers already pay 8.3 percent sales tax on non-food items, such as paper towels and toothpaste.

Tim McCabe, president of the Arizona Food Marketing Alliance (AFMA), noted the 2-percent tax on food will cost the average shopper one week's worth of food every year. "That severely impacts the poorest among us, along with families and those on fixed incomes," he observed. "Maybe that's why the Phoenix City Council imposed the tax with such short notice and no input."

McCabe also noted the Proposition 100 sales tax is temporary and an attempt to help Arizona get to a balanced budget by 2014 without making dramatic cuts in education and service.
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