Invest in Ed is Not the Way

The Arizona Technology Council stands with much of the local business community in opposing the Invest in Education campaign to increase the state income tax. Such a measure would dramatically hurt small businesses and startups, and drive new businesses away from our state. The tax increase would be especially detrimental to the technology ecosystem in Arizona, which is a major contributor to the 160,000 jobs added since 2015.

The top state income tax rate in Arizona currently is 4.54%. This measure would increase the percentage to 7.90% for those individuals who earn over $250,000 (or households of over $500,000) and to 9.00% for those individuals who earn over $500,000 (or households of over $1 million). The additional tax would be used for K-12 education, 60% of which would go to teachers’ salaries.

Invest for Ed would disproportionately impact small businesses in Arizona, as many are organized as S corporations under the federal income tax code. Their revenue and expenses flow through their personal state and federal income taxes returns, meaning most will exceed the income levels in their personal income tax returns. This would make them subject to the higher tax rates in Invest for Ed.

The Council supports education funding and teachers’ pay raises. Supporting our K-12 teachers is paramount to overcoming the challenge we face of filling the workforce pipeline with skilled talent, which is why we are a major proponent of Governor Ducey’s 20X2020 plan. However, the Invest in Education Act is counterintuitive. It will hurt our economy, and eventually come back to negatively affect our teachers, technology sector and the overall business ecosystem.

If the Invest in Education Act is on the ballot, the Council and its Public Policy Committee will strongly oppose it. Your vote matters and we urge our members to go to the polls on November 6, 2018.