Why business, political leaders want Arizona governor to reconsider transportation tax
Maricopa County transportation planners say a veto by Gov. Doug Ducey is hurting economic development.
Proposition 400, a voter-approved half-cent sales tax dedicated to transportation projects is set to expire in 2025. The Legislature approved a plan for a special election next spring but Ducey vetoed the bill in July.
John Bullen, transportation funding policy program manager for Maricopa Association of Governments, said without next year’s voter approval, construction on a section of State Route 30 — a planned freeway designed to relieve congestion for Interstate 10 and run 13 miles between Loop 202 and Loop 303— will be delayed about two years.
“When you take into consideration inflationary costs increase, that’s a $300 million hit to this project alone,” he said.
Inflation was one reason Ducey vetoed the ballot measure. He said voters shouldn’t be asked to tax themselves when governments have surplus revenue. In a letter to the secretary of state, Ducey called the ballot language biased and said it failed to mention the tax would last an extra five years for a total of 25 years. Rather than wait until November 2024, when the tax is closer to expiring, he said the bill would create a special election at a time when voter turnout “will likely be low."
Bullen said time is of the essence. “When we say Proposition 400 expires in three years, that seems like a long time away. However, in transportation terms, that’s right around the corner. Why is that? It’s because project development takes a very long time.”
He also told MAG’s committee, made up of more than thirty business, local government and tribal leaders, that polling results earlier this year put passage of a Prop 400 extension “north of 70%."
Committee member Steve Betts, also a board member of Greater Phoenix Economic Council, said the special session is critical and “there’s a lot of folks that are looking to have a very discreet, very pointed discussion with the governor about the special session.”
According to an economic analysis presented by MAG, extending Prop. 400’s 20-year tax, plus an additional five years, would benefit economic development by keeping lower travel and congestion times compared to peer markets and create and support new jobs.
MAG provided examples of the following projects funding through the current half-cent sales tax:
- The Loop 303 (Estrella Freeway) improvements needed to support the new Taiwanese Semiconductor Manufacturing Company facility—Arizona’s largest-ever direct foreign investment.
- The Phoenix-Mesa Gateway Airport area continues to see significant growth supported by the regionally funded State Route 24 extension.
- Significant commercial growth is occurring in the Southwest Valley because of regional investments in I-10, Loop 303 (Estrella Freeway), and Northern Parkway.