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Ariz. biz groups split on sales tax hike

Arizona state seal

by Mark Brodie

At the very end of an Arizona commercial supporting the tax increase, you see the names of the groups that have contributed to the campaign. First on the list is the Arizona Chamber of Commerce and Industry. Glenn Hamer is the group's President and CEO.

"Our opinion is that the sales tax is the least painful way to raise a sizeable piece of revenue," he says.

Hamer says if the state makes too many more cuts to its budget, it could be difficult to attract new businesses to Arizona. State officials estimate the tax increase would bring in about a billion dollars a year over the next three years. Two-thirds of the money would go to education.

But Farrell Quinlan, state director of the National Federation of Independent Business, says raising taxes won't help his members.

"Our businesses and our folks are small enough to fail, and we hear the rhetoric on the other side, where failure is not an option," says Quinlan. "Well, it's been an option for 300,000 Arizonans. They've lost their jobs, they've lost their homes."

Even many supporters of the tax increase, like Todd Sanders, president and CEO of the Greater Phoenix Chamber of Commerce, wish it hadn't come to this.

"No one likes a sales tax increase or any kind of tax increase," says Sanders. "We've already cut $2 billion out of the budget, we need to have a level, set state government."

The difference of opinion within the business community is not lost on those involved. The Arizona Chamber's Glenn Hamer says the groups tend to agree on issues 90-95 percent of the time, and that their disagreement on the tax proposal -- known as Proposition 100 -- is a sign of how big this issue is.

Farrell Quinlan says when he polled the small business owners he represents, 71 percent opposed the increase.

"The business community has, it'd be fair to say, a nuanced position, and the support that they're showing is always conditioned on not making the problem worse," he says. "I think Prop 100 makes the problem worse."

State lawmakers have already approved $800 million worth of spending cuts that would go into effect if voters say no to the tax increase.


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