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Plan would shift bond, override cost onto homeowners

Sales and Marketing
Davis Kitchens
Cabinet Sales Administrative & Professional
City of Benson
Planning & Zoning Director

We were appalled to learn that GOP legislators quietly added a provision to their proposed state budget that would wallop homeowners. It was sneaked into the budget bill without a public hearing.

The provision would cut the tax ratio at which businesses are assessed to pay off city, county and school district bonds and overrides. The ratio would be reduced from 22 percent to 10 percent, the same ratio used to evaluate homes, the Star's Rhonda Bodfield reported Friday.

Bodfield reported that it was slipped into the budget package as a floor amendment with no public hearing. It is not mentioned in public bill summaries.

This is an unacceptable way for the Legislature's GOP majority to do the public's business. The public should be invited to vote on such a fundamental change to the state's tax structure.

Furthermore, we all know that Arizona's tax code is out of whack and needs serious reform. Tweaking it here and there is not the answer.

Instead of enacting this measure, the Legislature and governor must undertake with all deliberate haste a comprehensive study to determine how best to reform the entire code. Its recommendations should be taken to the voters for vetting.

The measure that was secretly planted in the budget bill would void a basic tenet of Arizona's tax policy: that businesses shoulder more funding responsibilities than homeowners because they make money off their properties.

If it were enacted, homeowners would face a larger share of the cost of any new bonds or school overrides, while businesses would pay less. This would put override and bonding efforts at much greater risk of being rejected by strapped voters.

TUSD is considering seeking an override to upgrade its technology and support all-day kindergarten. Under the current rules, the owner of a $178,000 home would pay $72 a year in additional taxes, Bodfield reported. A business worth about $450,000 would pay about $423 more annually.

TUSD homeowners could expect to pay 20 percent more under the proposed new ratios, according to calculations by Phoenix bond-underwriting firm Stone & Youngberg, Bodfield reported.

The same would be true for homeowners in the Marana and Amphitheater districts. Vail district homeowners would pay 15 percent more and those in the Catalina Foothills 9 percent more.

Chuck Essigs, a lobbyist with the Arizona Association of School Business Officials, told Bodfield a change of this magnitude should go to the voters.

"I would love to be campaigning against a proposal that says: 'You'll be paying more in property taxes so that businesses can pay less,' " he said.

We suspect lawmakers didn't give him the chance to do so because they understand that voters would reject the change.

Proponents argue that the business tax break would boost economic growth.

But Pima County Administrator Chuck Huckelberry noted that it would benefit many out-of-state business owners, such as the Canadian owners of the proposed Rosemont mine or the owners of Wal-Mart.

Kevin McCarthy, president of the Arizona Tax Research Association, told Bodfield he couldn't see why schools would be upset. He noted that they've lobbied for a tax increase to ease the impact of state cuts.

That argument is disingenuous.

We believe taxpayers are, in fact, willing to dig deeper to support schools during this economic crisis. We don't believe they're eager to take over a portion of businesses' share.

Lawmakers are trying to foist this change upon Arizona citizens in a devious, underhanded way. If the state's tax structure is going to be changed, that question should be put to the people.