Propositions 207 and 208: Arizona Farm Bureau Weighs In
At its September meeting, the Arizona Farm Bureau Board of Directors made official our organization’s positions on the two statewide ballot measures that will appear on November’s ballot. In accordance with our policy, Farm Bureau is opposed to both Proposition 207 and Proposition 208.
Proposition 207: Smart & Safe Arizona
Despite its name, Proposition 207’s legalization of recreational marijuana is not a smart move for the state. Farm Bureau policy is unequivocally opposed to legalizing marijuana for recreational use. Our policy also supports wise and responsible state tax statutes. But Proposition 207 would lock Arizona into a potentially expensive program of enforcement and tracking for legalized marijuana without the ability to adjust the program’s revenue to account for actual costs. In most states with legal cannabis, the revenue collected from the program falls far below the cost of implementing it. But Proposition 207’s 16 percent excise tax on marijuana is fixed – the legislature cannot adjust it, even with a 2/3 vote, and voters can’t adjust it unless they pass an initiative to raises sales tax on every other product in the state at the same time. Moreover, the proposition provides that if cannabis is taxed federally, Arizona’s tax collection on the product will ratchet down proportionally. Ultimately, if the federal government decides to legalize and tax cannabis, Arizona could be in a position where we must pay to enforce a program from which we collect no tax revenue whatsoever.
Proposition 208: Invest in Education
Speaking of unwise tax measures, the Invest in Education Act would hamstring Arizona’s economic progress when it’s needed the most. The initiative would impose a 3.5 percent surcharge on all taxable income over $250,000 for single filers and $500,000 for joint filers. Money collected by the tax will be distributed to school districts and charter schools, proportionate to their student population, to fund increases in teacher salaries, hiring more teachers, and supporting new and prospective teachers to help them stay in the classroom. While we agree with the wisdom of finding a stable and adequate funding stream for Arizona’s educational system, Proposition 208 simply does not create that funding. Because the tax is based on income, it’s not a dedicated funding source – it’s based on the most volatile tax brackets in the state and will be wildly unpredictable from year to year. Even more damaging, the initiative would increase Arizona’s overall tax rate to 8 percent, in the top ten highest nationwide. This would create a significant disincentive for business to relocate to Arizona, and the increased tax burden on existing businesses has been projected to led to significant job losses over the first ten years of the tax. Small businesses will be the hardest hit, with a marginal income tax increase of more than 77 percent.
The ballot initiative process is just one of many things that make Arizona politics unique. While many states have a process that allows any voter to propose a law for the electorate to approve or reject, Arizona is one of only a handful in which those laws are subject to voter protection, meaning that the Legislature can’t modify or undo them without a 2/3 supermajority. This protection lends a weight to ballot-passed measures that makes each of them worthy of significant contemplation before you vote. For more on Arizona Farm Bureau’s positions in the 2020 Election, go to the 2020 Election Resources tab on the Public Policy page of www.azfb.org.
This article first appeared in the October 2020 edition of "Arizona Agriculture."