A m e r i c a n P o s t – G a z e t t e
Distributed by C O M M O N S E N S E , in Arizona
Friday, August 3, 2012
Special interest lobbyist dupe Legislature! (again)
A proposition will be on the November ballot that will change the way property is taxed, but it doesn’t appear to do anything worthy of changing our constitution. The first thing that quickly becomes obvious is that this proposition, identified as Prop 117, does not reduce property taxes or limit the ability of taxing districts to levy taxes. If it passes it will require all taxes, both primary and secondary, to be levied against the limited property value (LPV), and increases in the LPV would be limited to five percent per year.
The Lincoln Institute of Land Policy, an internationally recognized private institution, published a comprehensive study in 2008 of the problems associated with limiting property values. Their study not only makes a strong case that this is a deeply flawed means to counter rising property taxes, but can result in shifting higher taxes to residential property. You can read excerpts of the report at: http://www.lincolninst.edu/pubs/1412_Property-Tax-Assessment-Limits
Based on a recent Capitol Media Services article by Howard Fischer, The driving force behind this proposition is the Arizona Tax Research Association (ATRA). ATRA acknowledges in the article that this proposition does not reduce property taxes. This excellent article by Mr. Fischer can be found at: http://verdenews.com/main.asp?SectionID=1&SubSectionID=1&ArticleID=48703
Prop 117 began in the State Senate as Senate Concurrent Resolution 1025 sponsored by Senator Steve Yarbrough. You may recall Yarbrough was taken to task earlier this year in an Arizona Republic editorial for “lining his pockets with taxpayer money”. You can find the editorial at: http://www.azcentral.com/arizonarepublic/opinions/articles/2012/03/05/20120305taxpayer-money-senate-finance.html
That editorial pointed out that Yarbrough has sponsored many revisions to the state’s tuition tax credit law that created middle-man organizations to manage the flow of $43 million from taxpayers to students. These middle-men are called School Tuition Organizations (STO), and the good senator runs the second largest STO in the state. STOs are allowed to take 10 percent of the money it channels to students as administrative cost. Guess who put that provision in the law. Another Yarbrough law passed this year doubled the amount individuals can direct toward tuition scholarships thereby doubling his salary that is reported in the editorial at $96,000.
Knowing how the system works, Senator Yarbrough had to have lots of help from ATRA to pass all of his pocket-lining STO laws. Why does ATRA care about Prop 117? Well, if the Lincoln Institute is correct that value limits will cause taxes to shift to homeowners then the property taxes on ATRA members will be less as they are all owners of high value properties. Therefore, they are happy to help Senator Yarbrough line his pockets with his STO legislative changes and he likely returned the favor by sponsoring this sneaky tax shift that could benefit ATRA members.
ATRA and their many lobbyists are masters at “helping” legislators accomplish their goals especially if they are self-serving. They know that somewhere down the road they can call in the chips when they see an opportunity to benefit their members. No doubt that a comprehensive audit of ATRA would reveal that their members have received billions in tax breaks as a result of their influence in the state legislature. Where does a large chunk of ATRA members tax saving go – out of state. What we have is an organization that effectively moves homeowner property taxes to out of state investors.
Any homeowner who thinks Prop 117 will reduce their taxes might want to reconsider. On the one hand you have ATRA and Yarbrough, with records of self interest and enrichment, saying it will help homeowners and on the other hand you have an internationally recognized independent organization saying the opposite is likely. So, take your pick and cast your vote.
Prop 117 is a Windfall for the most desireable properties in the state. Independent studies are correct. If these reporters that drank the ATRA Kool Aid would survey the largest real estate deals that have recently closed, compare to the 2013 assessed value and calculate how many decades it would take for these properties to even remotely resemble market value, which is where the majority of the homeowners are already assessed.
ReplyDeleteRight out of the gates, it is a run away for these under-assessed assets. Wonder how many of these are ATRA Members with these windfall assessments. No wonder they want to lock in low.