Arizona voters narrowly approved Proposition 208, which will create a surtax on the state’s highest earners — individuals earning $250,000 a year or more or couples earning $500,000 per year to fund education.
Many business leaders and politicians — mostly Republicans — opposed the measure in the runup to the Nov. 3 vote, which they claimed would hurt businesses or make the state less attractive for companies considering relocating to the state.
Jim Rounds, economist and owner of Rounds Consulting, who opposed the measure, said his firm forecasted a negative impact on the state’s economy because of Prop 208’s passage, but said Arizona is still well-positioned with other business-friendly policies, and policymakers could enact measures to combat any loss from the surtax.
About 3% of the state’s tax filers will be impacted by the measure, Rounds said.
“Still, a very small percentage of the overall economy can have a big impact,” he said.