By Michelle Bolton
Arizona is in the midst of a giant property-tax crisis, and it needs to act immediately if it is to avoid a California-style Prop. 13 revolt.
The Arizona Legislature and Gov. Janet Napolitano started sensing the problem two years ago when they teamed up to temporarily suspend the state equalization assistance rate until 2009. The Legislature took an additional step by placing Proposition 101 on the ballot, which voters approved in November 2006. Prop. 101 now requires counties, community college districts, and cities to receive voter approval before raising primary property taxes above established limits.
But in spite of these fixes, in just a few short years, residential and commercial property valuations have increased dramatically and, if left unchecked, those valuation increases will translate into staggering property-tax increases.
Two bills now working their way through the Legislature would make the temporary suspension of the state equalization assistance rate permanent. They are Senate Bill 1002 and House Bill 2220, and they deserve everyone's support.
Arizona's commercial property taxes rank among the five highest in the nation. Out of 75 barriers to business start-ups and continuation measured by the National Federation of Independent Business's Small Business Problems and Priorities report, property taxes zoomed to sixth place - a remarkable surge since the issue wasn't even on the radar in NFIB's previous report.
The Legislature noticed the looming menace even before 2006. In 2005, lawmakers approved of a 5 percent assessment ratio rate reduction for Class 1 commercial property over 10 years and also increased the homeowners' rebate to avoid any type of tax shift to them.
In 2007, lawmakers accelerated the reduction to be complete by 2011. Prior to the law change, Arizona taxed property at an assessment ratio schedule of 10 percent for homeowners and 25 percent for commercial and/or industrial, placing the property tax burden squarely on the shoulders of business.
No society has ever taxed its way into prosperity. Senate Bill 1002 and House Bill 2200 are coming at just the right time, especially as the nation's front pages are full of recession stories and many people are fighting to get out from under the sub-prime mortgage mess.
(Editor's note: Michelle Bolton is Arizona state director for the National Federation of Independent Business.)