St. Luke's Health Initiatives and the Flinn Foundation strive to make Arizona a better place to live for all of its residents. Despite our state's assets, Arizona has many issues to address, with health and poverty among the most important. Our organizations have been pleased to sponsor the state capacity research that provided the background and impetus for "More Promises to Keep: Sustaining Arizona's Capacity for Welfare and Health Reform." St. Luke's Health Initiatives and the Flinn Foundation view the information and analysis provided in this report as a good way to stimulate discussion of health and welfare policy options and community actions. Research and dialogue are essential steps in the process of constructive change, as is communication with the public. We urge readers to consider the ideas presented in this paper and to continue to work together to improve the health and welfare of all Arizonans.

Despite all of the spending reductions, fund transfers, and other techniques used to balance the budget in the preceding few years, Arizona’s general fund faces a massive deficit. This issue of Policy Points poses an important question: Are you content with the historically low expenditures being made from the general fund and satisfied that the current low level of public services will be permanent?

The transaction privilege tax (TPT), often referred to as the sales tax, is a major source of revenue for state and local governments in Arizona. The TPT is applied to numerous categories, such as contracting and utilities. The analysis in this paper is limited to the retail category, which accounts for half of the TPT collected by state government, and the restaurant and bar category, which contributes one-tenth of the TPT revenue.

The purpose of this brief report is to provide information about the past, present, and future of a very significant education reform program and tax increase, commonly known as Proposition 301. Coverage includes the history leading up to the ballot measure approved by Arizona voters in November 2000, its status approximately one year after it went into effect, and its prospects over a 20-year life span.