Thursday, June 21, 2007

Taxpayer Group Applauds Passage of Legislation to Curb City Tax Carve-Outs

The Arizona Federation of Taxpayers (AFT) today applauded the Arizona legislators who voted in favor of a measure to penalize municipalities that carve-out special sales tax abatements for politically-connected developments. The bipartisan measure, led by Sen. Ken Cheuvront (D-Phoenix) and Rep. Rick Murphy (R-Glendale), will reduce a city's state shared revenues by the amount of future handouts. The measure, which applies only to cities in Maricopa and Pinal counties, had to overcome the strong opposition of municipal lobbyists, including lobbyists paid directly or indirectly with taxpayer money.

AFT, a state chapter of the grassroots group Americans for Prosperity, also expressed thanks to taxpayer activists who sent e-mails and made phone calls in support of the measure. "People don't like corporate welfare," said AFT Executive Director Tom Jenney. "They are tired of seeing cities carve out special tax dodges for the fat cats at their expense."

The measure was passed in the wake of two especially egregious abuses committed in recent weeks. First was a decision by the Phoenix City Council to give a $100 million sales tax handout for the City North development. Second was a decision by the City of Surprise to give Westcor a $240 million sales tax rebate for the Prasada mall.

"This bill will be good for city taxpayers, which by definition means that it will be good for the cities," said AFT chairman Chad Kirkpatrick. AFT argues that the net effect of such handouts is to stick all other city taxpayers with higher tax bills, and to give cities yet another excuse to not enact across-the-board tax cuts that would benefit all city taxpayers.

AFT suggested that future legislation apply the reform to the entire state, including Pima County and the Town of Marana, whose lobbyists succeeded in carving out special exemptions from the reform, over the objections of the bill's sponsors.

To see which Arizona House members voted for the bill, click here.

To see which Arizona Senate members voted for the bill, click here

Contact: Tom Jenney, (602) 478-0146 or by e-mail,

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