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QCVillager
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Posted: Thu Jun 11th, 2009 01:35 pm |
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Dear Representative Tobin,
Thank you for your letter regarding the state budget and its impact on municipalities.
Last December, Tucson Regional Economic Opportunities (TREO) conducted a survey of nearly 600 businesses in our area to find out what their priorities were for the coming legislative season. Those priorities did not center upon tax cuts nor tax climate. The top priority for business leaders was that funding for K-12 schools and higher education should be maintained. Businesses need to have a skilled labor force, and they rely on local schools to provide that. I also met with top executives at Ventana Medical Systems, who want to bring hundreds of new high-salary, high-tech jobs to Oro Valley. Their number one concern is their trouble attracting top executives and scientists who don't want to move to Arizona because of our apparent lack of commitment in funding for education. I have heard the same thing from employees of Raytheon, who tell me that they have 400-500 engineering jobs that they can't fill because potential employees are hesitant to move to Arizona because of the schools.
I also have serious concerns regarding the moratorium on impact fees and new building codes. These provisions do nothing to balance the state budget. Instead, they benefit a powerful special interest group at the expense of existing taxpayers.
Among the long list of negative impacts on local residents, these moratoria:
- Prohibit some capital items, such as police and fire vehicles, from being funded by impact fees, which could affect local government's ability to provide for vital services.
- Provide for a total moratorium on impact fee collection until May 31, 2012, which will cripple the ability of local governments to be good stewards of their financial resources. This moratorium won't stimulate building or the economy. Builders are not building new homes because the market is down, and there are plenty of existing homes on the market. Asking existing taxpayers to subsidize new development only adds to that glut and further suppresses the value of their existing homes.
- Provide for a moratorium on new building codes until May 31, 2012 on any residential or commercial plat or plan approved before May 1, 2009. This one is particularly disturbing, as the City of Tucson just passed groundbreaking new building codes, which the Town of Oro Valley is emulating, and which would protect our groundwater. Making new construction more energy and water efficient makes it more attractive to buyers and protects existing residents.
The homebuilders want you to believe that growth always brings economic benefits to the community. But poorly planned growth brings economic burdens to taxpayers. We can't expect existing taxpayers to subsidize new development with their tax dollars. Existing taxpayers are burdened enough without being expected to pay for expanded police services, road expansion and maintenance, and extension of sewer and water lines.
Impact fees are an important tool that local governments can use to protect taxpayers while covering the expenses for the infrastructure (such as sewers and roads) and public services (such as police protection) that the new development will require. New construction near other developed areas has lower infrastructure and service costs than isolated, far-flung construction. When new development bears the actual costs associated with the infrastructure it requires, opportunities in or near existing developed areas will become more attractive, stimulating local economies.
I also have concerns about heritage fund sweeps and the affect of such cuts on local governments' ability to preserve historic sites, which in turn affects tourism and economic development and tax revenues.
Thank you for opening this conversation and for your service.
With best wishes,
Salette Latas
Councilmember
Town of Oro Valley
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Republican_and_PROUD
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Posted: Thu Jun 11th, 2009 06:49 am |
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Villager,
Why shouldn't the costs be shifted locally? Wouldn't it be better if all the money for the schools in the counties came from and stayed in the county?
Here's an idea to balance the State's budget issues: TRY SOMETHING NEW!!! Get rid of the state income tax--in fact, let's be a trial for the Fair Tax: abolish all taxes in Arizona except consumption taxes at the state level. No property tax, no business taxes, no income taxes, NOTHING. All sales tax collected at the state level and distributed back to the localities based on a population formula ( $x per resident). We need to be creative and not rely on the same old-same old solutions...try something NEW!!! Same goes for education!
-R
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QCVillager
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Posted: Thu Jun 11th, 2009 05:57 am |
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Local leaders: GOP plan hides tax pain
Many fearful of GOP plan's impact on homeowners
by Mary Jo Pitzl - Jun. 10, 2009 12:00 AM
The Arizona Republic
The Legislature was proud of producing a budget with no tax increases.
But if it is enacted, taxpayers, particularly homeowners, would end up with higher property-tax bills as local governments cope with cuts made at the state level. It's a shell game that allows the state to claim a no-tax policy, say representatives of those local offices, from cities and counties to school districts and community colleges.
"It is completely incorrect for the Legislature to claim this is a no-tax-increase budget," Ken Strobeck, executive director of the League of Arizona Cities and Towns, told Gov. Jan Brewer at a hearing she convened Tuesday to examine the budget approved by the GOP-controlled Legislature. Although the bills were approved last week, lawmakers have yet to send them to Brewer. Republican leaders say they want to iron out their differences rather than provoke a budget confrontation.
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Lawmakers who voted for the budget say they're not forcing a tax increase on anyone: If local officials want to raise taxes, it's up to them. The Legislature's goal is to lighten the tax burden on businesses.
Of particular concern to the local officials is a provision tucked into the budget bills that sets the rate at which properties are taxed for override and bond elections to 10 percent of assessed valuation - meaning everyone will pay the same rate. Currently, there are nine categories for assessing property taxes, with most commercial-business properties topping out at 22 percent.
By moving all properties to a 10 percent rate for any tax hike approved as of July 1, the tax burden would ease on businesses at the expense of homeowners, said Chuck Essigs, government-relations manager for the Arizona Association of School Budget Officials.
To raise the same amount of money as local governments do now from voter measures, homeowners would have to pay substantially more, Essigs said.
For example, in Chandler, the policy change could mean a $400 increase in the city portion of the property-tax bill for a $200,000 home, according to figures prepared by city officials.
Those provisions would amount to a 25 percent increase in the tax rate to raise the same amount of money from a bond election as they have previously. And that could make future bond elections a harder sell, Chandler Mayor Boyd Dunn said.
The same scenario could play out in school districts, which hold override elections to exceed their budget limit in addition to bond elections. Cities and counties only hold bond elections, which raise money for construction projects.
For example, homeowners in the Avondale Elementary School District would see a 47 percent jump in their school-district tax bill if Avondale wanted to raise the same amount of money it currently does through its budget-override provision, Essigs said.
In the tiny Wilson Elementary School District east of downtown Phoenix, the increase would be 105 percent, he said.
"For the same benefit, they would pay twice as much as they did before," Essigs said of homeowners in the Wilson district.
Education taxes typically are the largest item on a property-tax bill, which includes a varied number of taxing districts, depending on the property's location. The policy change included in the budget would apply to school districts, community colleges, cities and counties, and only for any election held after June 30. Special taxing districts, such as fire districts, are exempt.
Senate Majority Leader Chuck Gray, R-Mesa, rejected the notion that the Legislature is simply passing the buck - in this case, forcing a tax increase at the local level.
Homeowners would go to the polls for future override and bond elections with full knowledge of a higher tax bill, he said, and they can choose accordingly.
Lawmakers made the change to try to entice businesses to relocate to the state.
"We're in a depression," Gray said. "We're in bankruptcy. We need business to come to Arizona."
But Essigs said it's doubtful that the businesses that would benefit from a lower tax bill would pour that money into Arizona investments. Many of the business properties are owned by out-of-state companies, such as Walmart, and Essigs said their savings would probably go to corporate headquarters.
House Appropriations Chairman John Kavanagh, R-Fountain Hills, said he's a bit concerned about shifting a heavier tax burden to the residential-property owner.
On the other hand, taxes levied on business usually end up being passed on to customers, who are mostly homeowners, so in a sense there's little difference in the bottom line, he said.
Sen. Ken Cheuvront said he's probably the only Democrat in the Legislature that likes the policy shift. That's because it puts residential and business properties on even footing, instead of the current tax structure, where, he said, business subsidizes homeowners. The Phoenix Democrat is also a business owner, running a restaurant in Phoenix.
Not all local government officials object to the proposed change. But, they told Brewer, it doesn't belong in a budget bill, much less one that was rushed through with no time for comment.
And it's a precipitous drop in the assessment ratio for business, a stark change from the state's current practice of a gradual decrease. A quick drop makes it harder for local governments to plan their strategy for bond and override elections.
Brewer's spokesman said the governor was sympathetic to the local concerns, since she herself was a county supervisor.
"She's not at all comfortable with shifting those costs to the local governments," spokesman Paul Senseman said.
Brewer is meeting with legislative leaders to try to resolve their differences over the state budget, which must be in place by July 1.
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