Sun, Jul 06, 2008

Arizona / West

Gov. defends agreement with builders on road tax

Would give them a break, raise state sales levy
By Howard Fischer
Capitol Media Services
Tucson, Arizona | Published: 05.15.2008
PHOENIX — Gov. Janet Napolitano is defending an agreement she made with home builders to take them off the financial hook for new road construction in exchange for a campaign contribution to the cause and a separate political deal.
And she is denying the pact was a secret, even though her office did not produce copies until days later — and only when specifically asked.
But she said Wednesday that some versions of the proposal to raise $42.6 billion for new highways, road improvements and mass-transit projects did, in fact, include language that would have imposed a fee on home builders whose yet-to-be-built developments would benefit by being near some of the new transit projects.
That "benefit district" language was scrapped after the Home Builders Association of Central Arizona agreed to contribute $100,000 to help gather signatures to put the measure on the November ballot and committed to giving even more money — the amount is not specified — to persuade voters to approve it.
The final version Napolitano negotiated puts the entire financial burden on the state sales tax. It would hike the 5.6 percent state levy by a percentage point, a move that, if approved, would give Arizona among the highest state sales- tax rates in the nation.
Napolitano said the deal does not necessarily mean developers will bear no portion of the financial burden for the transit improvements, many of which are being made necessary because of the state's growth.
She said Connie Wilhelm, president of the home builders' group, promised to work with the Governor's Office to write legislation next year for additional "transportation infrastructure funding." But the home builders provided no specifics about how much, if anything, they would be willing to pay.
And the governor said she got more as part of the deal.
Wilhelm's group agreed not to oppose a separate initiative being pushed by the Nature Conservancy to permanently put 570,000 acres of state trust land off-limits to development.
Napolitano said opposition from home builders was to blame for the failure of a similar measure in 2006.
The deal, negotiated before the initiative was filed May 6, was memorialized in a letter dated that same day from Wilhelm to the governor, a letter that Dennis Burke, Napolitano's chief of staff, said the governor wanted.
At a press conference the next day, Napolitano answered questions about the measure and its financing. She specifically said she supports having the entire cost borne by Arizona consumers through higher sales taxes, saying that was the only source of revenue guaranteed to bring in the amount of money necessary.
It was not until two days later, when word of the deal not to put some of that burden on developers leaked out, that Napolitano's office furnished a copy of the letter.
"I do not like this implication that there was somehow a secret deal," the governor responded Wednesday when asked why she did not disclose her arrangement with home builders a week earlier.
And she brushed aside questions of whether a deal is a secret if it is not disclosed to the public until someone specifically inquires.
"I know you're upset we didn't send you a press release about a letter," Napolitano said. "But we don't send you press releases about every letter we get."
The Governor's Office does send out releases on a variety of subjects. Since the beginning of April, for example, her staff has released everything from vetoes of legislation and a letter to Congress to continue to fund National Guard soldiers on the border to announcing volunteer-service-award winners and declaring May 1 to June 15 "Safe Prom and Graduation Season."
Napolitano said the proposed tax hike, an 18 percent increase over the current rate, is justified by the creation of a true statewide plan for transit needs. And she said the construction jobs that will be created will help stimulate the state's economy.
The governor is using that same argument to push lawmakers to allow the state universities to borrow $1.4 billion to construct new research buildings and make needed repairs. But state lawmakers have so far balked at the $80 million in annual debt payments that would create for the next 25 years.