During the previous decade Arizona experienced a dramatic increase in the number of people receiving health insurance coverage through the Arizona Health Care Cost Containment System (AHCCCS). If criteria for AHCCCS eligibility don’t change, it is unlikely that this trend will be reversed in the coming decade. More positive trends include increased child immunization rates and decreased smoking rates.

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.