Posted: Apr 9, 2010 9:26 PM
Updated: Apr 9, 2010 9:26 PM
TUCSON - The proposed temporary one-cent sales tax increase has become visual on the streets of Tucson. There is a lot riding on its passage, but what if Prop 100 fails? That is exactly what one University of Arizona research economist wanted to find out.
"These are pretty large cuts," said Dr. Alberta Charney at the University of Arizona.
Dr. Charney crunched the numbers to find out what it will cost Arizona voters if they reject Prop 100.
"The impact of a million dollars in direct spending from government is higher than it is for a million dollars in direct spending on the taxable things and from households in general," Charney said.
She says that government cuts could hurt more than tax increases. Charney says her study revealed the temporary tax could save 13,000 jobs statewide.
"Approximately 20,000 jobs could be lost if the sales tax doesn't get through," said Paul Parisi with the Tucson Metropolitan Chamber of Commerce.
Parisi has seen the UA study. He says while they have decided to back Prop 100, they were reluctant to do so.
"Business never wants to see taxes going up but we also don't want to see the state get in debt or reduce vital services that are important to the businesses and the citizens of Tucson," Parisi said.
Dr. Charney agrees, her model shows the tax will hurt business.
"It is going to hurt retail business, there's no doubt. The assumptions that were put into the model is that consumers will cut back by the full amount of the tax on what they can buy," Charney said Friday.
Charney did say, however, that Arizona actually has one of the lowest amount of taxes in the country per income and per capita. The vote for Prop 100 is set for May 18th.
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