With less than three weeks remaining before the 2012 General Election, many Arizonans are getting ready to put their early ballots in the mail. Before you fill in those boxes with ink and head to the post office, please take a moment to review the Arizona Chamber of Commerce and Industry’s recommendations on statewide propositions.
The Chamber has weighed in on five ballot measures, taking a position of support on four and opposing one.
Here’s a brief look at each of our positions:
Proposition 116 – Property Tax Exemptions - Support
The Arizona Chamber joins the Arizona chapter of the National Federation of Independent Business in supporting Proposition 116, which will help small businesses grow and create jobs by reducing the tax burden on their equipment and machinery. A tax on the value of equipment and machinery increases the fixed cost of operating a business in Arizona and creates a disincentive to new investment. Proposition 116 would exempt the value of equipment and machinery equal up to the wages of 50 Arizona workers (now about $2.4 million), making it more likely Arizona businesses will hire new employees and purchase necessary equipment.
Proposition 117 – Property Tax Assessed Valuation - Support
As our friends at the Arizona Tax Research Association have pointed out for years, our state’s property tax system is overly complicated, with two valuations: full cash value and limited property value. Under Proposition 117, the annual growth of the limited property value would be limited to five percent, and it wouldn’t exceed the full cash value. Also, the limited property value would be the only taxable value, helping to deliver a much greater level of predictability and stability in Arizona’s property tax system.
Proposition 118 – Establishment of Permanent Funds - Support
Passage of Proposition 118 will restructure the distribution formula for the Permanent Land Endowment Fund, whose largest beneficiary is K-12 education. Currently, in some years the formula distributes tens of millions of dollars; in other years zero. This reform will smooth out the distribution so that there is some allocation to education every year. The result will bring about reliable and consistent K-12 education funding with no new taxes and no new spending from the General Fund. Arizona Treasurer Doug Ducey deserves applause for crafting this reform.
Proposition 119 – State Trust Lands – Support
Proposition 119 will help prevent incompatible land use that could put at risk the jobs associated with military bases. Arizona’s military installations contribute over $9 billion in economic output. Proposition 119, whose supporters include Land Commissioner Maria Baier and Greater Phoenix Leadership, will help ensure they are able to complete their critical missions and remain an integral part of Arizona’s economy for decades to come.
Proposition 204 – Permanent Sales Tax Increase – Oppose
The Chamber recognizes that a high-performing education system requires the financial resources necessary to produce a highly qualified workforce. To that end, the Chamber strongly supported Proposition 100 in 2010, which established a temporary one cent per dollar sales tax, and over 10 years ago our organization supported Proposition 301. We also supported new funding this past year at the Legislature to fund Move on When Reading, a proven reform targeted at ensuring that students exit the third grade with the ability to read. Going forward we will support efforts to properly implement the Common Core standards, which is a state-led effort to increase educational standards so America's students can compete with the best and brightest students from around the world.
Unfortunately, this new $1 billion a year permanent tax would leave Arizona with the second highest sales tax rate in the country -- leaving a number of cities with a combined rate over 10 percent. It would make future efforts to reform our sales tax code and help to create jobs much more difficult. Not surprisingly, many chambers and prominent business groups oppose this effort including the Greater Phoenix Chamber of Commerce, NFIB, the Arizona Small Business Association, the Tucson Hispanic Chamber of Commerce and the East Valley Chambers Alliance. The education reform aspects are basically non-existent and simply not worth the risk to our state's economy. Arguably two of the most prominent education reform advocate in the state, Dr. Craig Barrett and former State Superintendent of Public Instruction Jaime Molera have come out in opposition to Prop. 204. The Arizona Republic wrote a thoughtful piece opposing Prop. 204 as well. We strongly urge a no vote on Proposition 204.
We believe that by following the Arizona Chamber’s recommendations on these important ballot measures that Arizona voters will be casting a vote in favor of growing jobs and increasing our state’s economic competitiveness. For more information on these items and candidate races, be sure to check out the Arizona Prosperity Project’s website, a convenient tool to learn more about the big issues in this election.
Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry