Tuesday, June 19, 2007

Municipal Tax Incentives Bill Must Pass

Legislation would hold city government accountable

The Arizona Free Enterprise Club, a pro-growth advocacy group, today called on the passage of HB2515 or SB1350, spearheaded by Sen. Ken Cheuvront (D, Phoenix ) and Rep. Rick Murphy (R-Glendale). The bill would force cities to pay for tax incentives they offer to private retail businesses.

“If local governments want to offer tax breaks to private retailers, then they can pay for them.” said Steve Voeller, president of the Club.

Neither bill would prohibit cities from offering incentives, but would rather deduct the amount of the incentive from the offering city’s state shared revenue.

“I’d be willing to bet that local officials will think twice before offering tax incentives if they know their city’s taxpayers are on the hook for the bill.”

“These targeted tax giveaways are not only a waste of money, but it’s puts businesses that don’t receive special breaks at a competitive disadvantage.”

The bills were stalled for the past couple of months, but have recently taken on new life as state lawmakers do not want to end the session failing to act on this important legislation.

Two recent tax giveaways agreements are particularly egregious and caught lawmakers’ attention. The city of Surprise recently announced a $240 million sales tax rebate to Westcor, and the city of Phoenix agreed to a $100 million rebate to CityNorth. Phoenix is also behind an effort to raise the city’s sales tax.

CONTACT: Steve Voeller: (602) 346-5061

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