Ann Seiden is vice president of communications for the Phoenix-based Arizona Chamber of Commerce and Industry.

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Don't do away with tax that helps our schools

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Opinion by Ann Seiden

The Arizona Constitution requires the Legislature to deliver a balanced budget before the start of the next fiscal year. That's a daunting task considering we started this year with a forecasted deficit of close to $1 billion. Daunting, yes. Impossible, no. It's merely time to make some smart decisions that address the immediate problem, but also set a long-term plan for success.

Keeping that long-term plan in mind is key when considering Arizona's competitiveness. The policies we put in place today will lead to either economic growth and stability or vulnerability tomorrow. And some short-term fixes that sound good now could do long-term harm to Arizona's competitive position.

One of those proposed fixes is to allow a statewide property tax to return. This is not a smart idea if Arizona wants to pull itself out of an economic slump.

Arizona has had good momentum in past years in terms of improving our tax system. But we can't forget we've also been dealt several blows that decreased our attractiveness, such as a raise in the minimum wage, an increase in workers' compensation costs, and the recent employer-sanctions law. Rather than throw another log on that fire, Arizona has the chance to signal to business that we're serious about remaining competitive.

Arizona's corporate property taxes still rank among the highest in the country. Arizona businesses are taxed at a rate more than double that of residential property owners. Whether on a home or business, high taxes decrease the value of a property while low taxes increase it. With a struggling real estate market, maintaining lower property taxes would help retain value for residential and commercial property owners.

Lobbyists for the Arizona Education Association and its president claim that permanently eliminating the property tax will take millions of dollars away from public schools. This is completely false and was dismissed by legislators in both Senate and House committee hearings.

The State General Fund is required to make up the difference if any revenue is lost as a result of the tax suspension. That means there has not been one dollar difference in the revenue public schools are receiving — nor will there be if the repeal is made permanent.

Critics like the education association are crying wolf in an effort to earmark funding for other projects. Its time someone pointed out the untruths in their rhetoric and exposed what they're really after.

The fact remains, Arizona businesses are strong allies of the education community. Companies need workers with skills and are therefore committed to improving student education in Arizona. The Arizona Chamber of Commerce and Industry is engaged in partnerships with schools as well as a dialogue on school funding.

It is important, however, to approach school finance in a comprehensive manner that assesses how much money is needed, which are the best revenue sources, and how those funds should be allocated for maximum impact. This is a discussion the Arizona business community is actively engaged in, but is separate from the issue at hand. Repealing the property tax simply does not hurt funds for education. Period.

To maintain the appropriate support for education and other core government obligations, it is important that we find a complete solution to our budget situation. This solution should include trimming government spending while preserving fiscal policies that lead to long-term economic growth. The Arizona Chamber of Commerce and Industry looks forward to engaging in what is a difficult, but do-able task ahead.