Gov. Doug Ducey vetoes ballot measure that would have asked voters to extend a transportation sales tax in metro Phoenix

Arizona Gov. Doug Ducey on Wednesday vetoed a ballot measure that would have asked Maricopa County voters to extend a sales tax used to fund transportation projects, saying it wasn't the proper time given soaring inflation.

He also cited a lack of a transparency in the bill.

Known as Proposition 400, the bill was crafted by a coalition of local leaders across metro Phoenix to help pay for projects from freeways and HOV lanes to light rail and streetcar routes.

Voters first approved the half-cent sales tax in 1985 and extended it in 2004.

Had Ducey approved the bill, the measure would have gone to voters in a special election next spring, which he said would "require unnecessary costs to administer" and "come at a time when voter turnout will likely be low."

Funding from the 2004 measure is set to expire in December 2025.

Mesa Mayor John Giles, who is the former chair of Maricopa Association of Government's Regional Council, which spearheaded the proposal, said the measure could have avoided a spring election had the state Legislature passed it sooner.

"The legislation was written before the legislative session even started. It could have been the first bill that passed. Had that happened, it would've had ample time to be on the November ballot," he said.

Now, local officials will need to reconvene to craft a new measure to be considered by state lawmakers and a future governor elected this fall.

A spokesperson for MAG said the veto "contradicts the input we've received from residents and stakeholders across Maricopa County as part of our multiyear, legislatively prescribed development process."

The measure had the support of every mayor in the county, Phoenix Mayor Kate Gallego said.

Gallego blasted Ducey on Twitter. "The governor is out of touch and clearly doesn’t trust the people of Arizona," she posted. "By killing the bill, the governor seems to think Arizonans love sitting in traffic jams, giving up time with family, and further damaging air quality."

She told The Arizona Republic she believes the term-limited governor vetoed the measure to curry favor with "far-right fringe groups" for future political endeavors.

Local political consultant Chuck Coughlin from HighGround said Ducey "betrayed them" by vetoing the transportation sales tax after they had helped push passage of the state budget and water bill.

Prop. 400 has helped pay for some of the largest transportation projects in metro Phoenix, including:

• Constructing Loop 303 in the West Valley.

• Expanding light rail.

• Widening major thoroughfares throughout metro Phoenix.

• Launching Tempe's streetcar.

The Maricopa Association of Governments in one proposal anticipated the extension would bring in as as much as $36 billion in revenue from 2025 to 2050 to help pay for:

• About 367 new miles of highway.

• Nearly 12 miles of new light rail tracks.

• 186 additional miles of HOV lanes.

• An additional 36 miles of bus rapid transit.

• More than 6 miles of new streetcar tracks.

Giles called the veto "disappointing" and said it was a "must pass type of a movement to keep up with population growth. ... If we allow (the tax) to go away, it's like putting out a 'please don't move here' sign to the rest of the country."

Ducey: This should have been amended

In a letter explaining his veto, Ducey pointed to changes from the 2004 measure and the proposed extension.

His concerns included:

• An extension of the sales tax to 25 years, instead of 20 years.

• A change that "reduces the amount of funding being distributed to the regional freeway system."

• A lack of consideration paid to how state dollars could be leveraged.

Ducey also said the language used to describe the request was "biased," writing "the ballot title and description narrative are inflated, embellished and fail to accurately reflect the reality of this tax burden on Arizonans."

"Targeted, responsible and sustainable investments in infrastructure will be critical as more families and businesses choose Arizona. However, asking voters to tax themselves, prematurely, with colorful ballot language during a time of high inflation is not the way to address the needs of our growing state," Ducey wrote.

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Arizona senator calls out bill as disingenuous

State Sen. Michelle Ugenti-Rita, R-Scottsdale, whose opposition to the bill was noted in Ducey's veto letter, told The Republic that the measure was a disingenuous attempt by cities to fund "pet projects" with taxes paid by other cities' residents under the guise of economic development.

She wanted to see more accountability on spending.

Ugenti-Rita said she supported funding for regional highways but that more of the funding went toward public transportation, which "is not economic development because it's not transporting goods and services."

The proposal allocated revenues to:

• 40.4% public transportation.

• 37.4% highways.

• 22.2% arterial roads and regional programs.

The senator argued it was not a simple extension of the 2004 bill but a new tax entirely with different oversight and spending allocations.

"This proposal is not what it says it is. ... It's all about a slush fund for cities like Phoenix to increase public transportation, which if you go ask the public, there's not an outcry for," Sen. Ugenti-Rita said.

The senator proposed amendments, such as cutting light rail funding, keeping the tax to 20 years, applying the sales tax only to retail purchases and clarifying the measure's publicity pamphlet to make it more neutral, that did not make the approved bill sent to the governor.

Ducey, in his veto letter, said some of her "commonsense" amendments would have improved the bill.

Furious mayors react: 'This veto is what's wrong with politics today'

Avondale Mayor Kenn Weise, who is the MAG Regional Council's newly elected chair, said Ugenti-Rita's concerns showed a lack of knowledge.

"Good transportation does contribute to economic development," he said.

Weise said the light rail in all likelihood would "never come to Avondale" but that it would still benefit the region as a whole by attracting development. He pointed to the growth that has sprouted alongside it in downtown Phoenix, Tempe and Mesa.

Mayors across the Valley condemned the veto, saying transportation projects would be in jeopardy and that Ducey disrespected voters by refusing to let them decide.

Local officials spent two years negotiating the proposal, they said.

"The governor has substituted his judgement for the voters of Maricopa County. He's treating our county like children and saying we can't make our own decisions," Gallego said.

Peoria Mayor Cathy Carlat noted the measure put the decision in voters' hands. "All he has to do is give the people who live here the choice," she said.

Regarding concerns that the sales tax went from 20 to 25 years, Chandler Mayor Kevin Hartke said cities wanted that because the total need for transportation funding across the county was more than the half-cent tax would have raised in 20 years. Rather than ask voters to approve a higher tax, they proposed extending the period of time that the tax would have been active to make up the difference.

"It seemed to make the most sense to leave it at the same rate and just increase the duration," Hartke said.

Gallego said the measure was created with a bipartisan group of mayors that came together with tribal leaders and business leaders. "That's important. It's what we're looking for in politics today — where elected officials find a plan that works for everyone. This veto is what's wrong with politics today."

Tempe Mayor Corey Woods said local leaders would have to regroup to determine what happens next.

"This absolutely is a very disappointing decision. We're going to have to go back internally at the city of Tempe and with our partners throughout the region to determine what the next steps should be based on today's disappointing news," he said.

The veto leaves future transportation expansion unclear. The tax extension was critical for fast-growing areas of the Valley. In particular, the Interstate 10 reliever road proposed to run parallel to the interstate in the West Valley, is now a plan with no funding.

Political consultant calls out Ducey for reneging on deal

Coughlin, from HighGround, called Ducey's vote a "betrayal" and said it jeopardizes 40 years of Maricopa County growth.

Coughlin said his firm was asked by Kirk Adams, Ducey’s former chief of staff, to help get recalcitrant lawmakers on board with the budget and the water bill.

“We were told to go help,” Coughlin said. He said they did, understanding the Proposition 400 vote would come after the budget was finalized.

In addition, the chairmen of the House and Senate transportation committees ensured their support for the $18 billion state budget with the understanding the transportation bill would pass, said Scott Smith, another HighGround lobbyist.

The lobbyists said they suspect Ducey might have a political motive: To be able to brag that he ushered in the largest tax cut in state history with last year’s passage of a flat-rate income tax, and then nixed the half-cent transportation tax.

“It’s his selfish ability to stop a potential tax extension that voters would have to approve,” Coughlin said.

Republic reporters Joshua Bowling, Sasha Hupka, Maritza Dominguez, Sam Kmack and Mary Jo Pitzl contributed to this article. 

Reach reporter Taylor Seely at tseely@arizonarepublic.com or 480-476-6116. Follow her on Twitter @taylorseely95 or Instagram @taylor.azc.

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This article originally appeared on Arizona Republic: Ducey vetoes transportation tax that was headed to Phoenix area voters