House OKs $250 mil property-tax cut

Arizona Tax Revolt commentary:

Yet another article which fails to mention the Arizona Tax Revolt but which spins a band-aid measure that will almost certainly be vetoed by the Governor. If you think this is property tax reform then I have some oceanfront property in Monument Valley to sell you.

What is the problem with Arizona Property Taxation?

It isn’t the paltry savings that would result by preventing the return of a tax we have not had to pay for the last two years. It is that our property taxation system is fundamentally flawed due to constitutional provisions that protect government’s ability to tax us in many cases without limi, rather than protecting the taxpayers from government excesses. With your help we will fix the system restoring fairness, predictability and affordability to property taxation. Speaker Weiers who personally blocked SCR1024 and SCR1026 (the Tax Revolt measures) from being heard in the Legislature, would have us believe this window dressing bill is needed because of the mortgage crisis when of course it is crisis in Phoenix and by the local taxing entities whose spending exceeds our ability to pay ever rising property taxes. If homeowners sign ridiculous mortgages that is their problem. When our elected officials at all levels cause our property taxes to skyrocket beyond the ability of many to pay, the system that allowed them to effectively write a second mortgage on our homes and businesses is obviously broken and being exploited at our expense.

The only viable solutions are ours, the rest are mere window dressing or worse. Signatures on the Arizona Tax Revolt petitions are the key, so let’s get to work and show the overtaxers that we are Mad As Hell and finally doing something about it!

Perhaps Thomas Jefferson said it best: “When the government fears the people, you have liberty. When the people fear the government, you have tyranny.”

Marc Goldstone, Chair.
Arizona Tax Revolt

Published: March 12, 2008
The Arizona Republic

by Mary Jo Pitzl

Hours after the governor vetoed a bill that would have frozen nearly $600 million in state spending, the House of Representatives Tuesday passed a $250 million tax cut.

The vote came with one vote to spare, 32-28, with two Republicans voting against it and one Democrat breaking with his party to vote for it.

Republicans, led by Speaker Jim Weiers, praised the passage of House Bill 2220 as a way to spare homeowners some of the pain of the current mortgage crisis.

"Do you want to try and balance the (state) budget on the heads of homeowners?" Weiers, R-Phoenix, asked rhetorically, in response to Democratic complaints that this would take away a critical source of revenue at a time when the state is staring down a $1.2 billion budget deficit.

The property tax is collected by the state and distributed to the counties, which dispense it to school districts. Lawmakers and Gov. Janet Napolitano agreed to a three-year suspension of the tax two years ago.

It is projected to generate $250 million if it goes back on the books next year.

But the GOP majority in the Legislature proposes that the repeal be made permanent, and have cited the current economic downturn - driven in large part by a crisis in residential lending - as all the more reason to keep the tax off the books.

"This tax is strangling development in this state," Rep. John Kavanagh, R-Fountain Hills, said.

The tax repeal would save commercial properties a collective $70 million a year. A commercial property valued at $1 million would save $926 in property taxes.

Likewise, residential savings would total $90 million a year. State officials have estimated the tax would save the owner of a home valued at $250,000 about $95 a year.

Democrats argued that the savings are negligible to a typical homeowner, and the money could have more punch if pooled in state coffers to provide a variety of services.

"I don't have the conscience to turn our backs on fundamental needs of our state," said Rep. Tom Chabin, D-Flagstaff.

While the tax is labeled an education tax, its repeal would hold the schools harmless. Lawmakers are obligated to backfill the $250 million the tax would raise from other revenues, something they have done for the last two years.

Rep. Pete Rios, D-Hayden, said that this is part of the GOP majority's "starve the beast" mentality.

The vote was praised by business groups, which are lobbying hard for the tax's repeal. Although they pointed to the potential gains for homeowners, they said their clients would benefit as well.

"This is also a welcome relief to businesses where commercial-property taxes in Arizona are among the five highest burdens in the United States," said Tim Lawless, president of the National Association of Industrial and Office Properties.

A companion measure in the Senate is stalled while leaders try to round up enough votes to pass it.

In the House, Rep. Mark DeSimone, D-Phoenix, was the sole Democrat to vote for the tax.

Republican representatives Jennifer Burns and Pete Hershberger, both of Tucson, voted against it.

Burns pointed to her grandmother's property tax bill and said the savings from the tax suspension has amounted to about $16 a year.