Governor Doug Ducey recently proposed a plan that would allow universities to keep $37 million in sale taxes revenue each year in order to pay off a $1 billion construction package. However, this plan has faced fierce opposition.

The majority of the opposers are Republican lawmakers. Republicans are not too keen on allowing any group to keep sales tax money. They are afraid of setting a precedent, and others will follow suit, draining the state’s biggest source of funds. Other Republican lawmakers argued that universities already have too much money as it is.

Senate President Steve Yarbrough stated, “I can tell you there’s very little support for the TPT (Transaction Privilege Tax) mechanism. Only a few think that’s a swell idea.” The TPT is generated by sales and transactions. Each year, TPT brings $4.5 billion to the state of Arizona’s general fund.

Republican Rep. Michelle Ugenti-Rita stated that the House shares the same sentiments as the Republican Senate in opposing the proposal. “I think before we even get there the real thing the Legislature needs to be asking is, ‘What are we getting? This is a massive bonding request, and in order to really get on board or justify it I think your first questions are, What does this mean for the trajectory of (the universities?) What’s it going to do for Arizona?”

Ducey had little to say in response to such criticisms by stating, “We’ll see about that.”

Ducey’s proposal called for Arizona State University, Northern Arizona University, and the University of Arizona to keep the TPT money that is generated in the cities and states that they are located. The universities would match the share of the state, which would allow them to float approximately $1 billion in 30-year bonds. This would cover maintenance on the buildings that were deferred, and fund a major research and development campaign.