Facing a barrage of last-minute advertising, Arizona voters on Tuesday rejected a proposal to create a permanent one-cent sales tax surcharge to fund education and other issues.
The defeat came after Phoenix-based Americans for Responsible Leadership donated $900,000 to the campaign against Proposition 204. But it turns out the money originated from out of state sources linked to conservative causes.
"Before the dark money started pouring in, our polling was very, very high,'' said Ann-Eve Pedersen, organizer of the Quality Jobs/Quality Education initiative. She said all that funding was used to "confuse people.''
But state Treasurer Doug Ducey who led the opposition was unapologetic about taking that money from those out of state.
"I think both sides played by the same rules,'' he said. "Both sides collected money both in state and from organizations across the country.''
For example, the National Education Association was a major contributor to the Pro 204 effort.
"I think we made a better and more persuasive argument,'' Ducey said.
And while the biggest chunk of money did come from Americans for Job Security, Ducey said they were not the sole source.
"We also had money from auto dealers, entrepreneurs and businesses along with individuals like Dr. Craig Barrett,'' the former chairman of Intel. "There are a lot of local people who thought this was a bad idea.''
At one point, Pedersen said, she was battling rumors that some of the proceeds, about $1 billion a year initially, would be used to fund abortions.
The real problem, she said, was convincing people this was not a new tax.
Technically, it is a new tax. The current one-cent surcharge approved by voters in 2010 will self-destruct on May 31. And that money, while sold to the voters by Gov. Jan Brewer as helping save education and public safety, really went into the general fund to prevent deeper cuts due to the recession.
But 204 proponents crafted it so the additional penny on the state's 5.6 percent sales tax base would not kick in until June 1.
Pedersen said voters should have thought of it as an "extension'' of the current levy. More to the point, it would have meant no change in the current 6.6 percent rate.
She said, though, that anyone looking at the description of the measure on the ballot would not realize that.
"It looks like a brand new tax,'' she said.
A majority of the proceeds from that brand new tax were earmarked for K-12 education. But there was also money for everything from health care for the children of the working poor to road construction.
Foes used that fact to argue against the measure, saying it was designed to fund special interests. And it did not help that the lion's share of the financing for Proposition 204 came from contractor groups whose members would benefit from getting $100 million a year for construction projects.
Even if the tax did not have other beneficiaries, Ducey said voters were right to reject more funding for education. He said he's not convinced more cash is necessary.
"I want to more effectively spend the dollars we have now,'' he said, before talking about additional resources.