A small business champion could be on his way back to the Arizona Legislature for the upcoming session.
Former State Representative Jeff Weninger is running for the same position in the November General Election for Arizona Legislative District 13. He previously served in the Arizona House of Representatives from 2015 to 2023.
Legislative District 13 covers parts of Chandler, Gilbert, and Sun Lakes.
After a brief hiatus from public service, Weninger decided that it was time for him to return to the legislature. He announced his candidacy for state House on July 27, 2023, in an email to supporters. In that email, Weninger wrote, “Over the last year I moved my son to college, helped my daughter start high school, dedicated more time to my small business, and continued to invest in our community. Personally, things are going really well. Unfortunately not every Arizonan feels the same way. Inflation and prices are climbing, energy costs are higher than ever, and parents are struggling with decisions on the best educational environment for their kids.”
Weninger added, “When I served in the Legislature, I fought to lower your taxes, keep our cost of living affordable, support our first responders, and make Arizona one of the most business-friendly states in the country. I’m excited to announce that I’m running for State Representative in the new Legislative District 13 to bring those same values and principles to the Capitol.”
Business organizations around the state know Weninger and trust his expertise and record in office as evidenced by the support he’s received for his campaign during this go-around. Earlier this summer, the Arizona PAC for the National Federation of Independent Businesses endorsed Weninger’s bid for election.
Back in 2022, Weninger was awarded with the organization’s Guardian of Small Business recognition. Chad Heinrich, the Arizona state director for NFIB AZ, said, “Representative Weninger is one of few small-business owners who dedicate the time needed away from his business to also serve effectively in the State Legislature. In 2022, he sponsored a key reform to the business personal property tax that will unleash untold amounts of business investment in Arizona through the simplification and reduction of this burdensome tax. He’s built a solid reputation in the State Legislature as being on the cutting edge of technology and has worked effectively to keep Arizona’s policies attractive to industry and innovators.”
The Greater Phoenix Chamber PAC also endorsed Weninger. Chamber PAC Chair John Moody stated, “It is absolutely critical we support and help elect lawmakers who understand the issues impacting the success of businesses and who will work collaboratively to advance and protect policies supporting our Arizona businesses. This will allow for a prosperous economy in the Greater Phoenix region and throughout the state of Arizona.”
In June, the Arizona Chamber of Commerce & Industry endorsed Weninger as well. President and CEO Danny Seiden said, “The Chamber is proud to endorse a bipartisan slate of candidates who will be strong champions for job-creating policies that will drive economic growth and further advance Arizona’s competitive position on the global stage.”
It’s not just business organizations that have lined up behind Weninger. The Arizona Troopers Association endorsed him back in June. According to the group, Weninger (and other officials and candidates) were selected “based on their support of Arizona law enforcement and the men and women of the Department of Public Safety.”
On the flip side, Secular AZ, a left-wing organization, gave Weninger a zero percent legislative score for the 2022 session – his last in the Arizona House of Representatives. Out of 22 votes scored by the group, Weninger voted the “wrong” way all 22 times. This organization, per its website, “represent[s] the Arizona nontheistic community – a vibrant and growing community of Arizonans who self-identify as atheists, agnostics, humanists, freethinkers, ‘nones,’ and other labels of personal choosing.”
Arizona Legislative District 13 is one of the most competitive in the state, so Weninger will have his work cut out for him in the General Election. According to the Arizona Independent Redistricting Commission, the district has a 1.6% vote spread over the past nine statewide elections. Out of those races, Republicans have won five times, compared to four for Democrats in the district.
Weninger is running alongside fellow Republican Julie Willoughby for the two House seats up for grabs in Legislative District 13. Both candidates were unchallenged in the primary. In unofficial results reported as of Wednesday morning, Weninger had received 16,631 votes, and Willoughby had garnered 15,931 votes.
The two Republicans will face off against Democrats Nicholas Gonzales and Brandy Reese, who were also unchallenged in their primary. Reese had received 11,901 votes, and Gonzales had obtained 11,576 votes. Shante Saulsberry previously withdrew from the race. Additionally, Cody Hannah is a Green Party candidate for State Representative.
Currently, the district is represented by Willoughby and Democrat Jennifer Pawlik in the state House. J.D. Mesnard, a Republican, represents the district in the state Senate.
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Last Friday’s CrowdStrike outage, which made headlines for disrupting operations at valley polling places, severely disrupted life for people all over the state because of Arizona’s heavy use of mobile banking, according to a study from Vention released Tuesday.
According to a release obtained by AZ Free News, the study by software development company Vention was based on Google Keyword Planner analysis of the U.S. Google search volume related to mobile banking on the basis that it can identify the states that utilize it most and were therefore the most impacted.
🚨 Recent #CrowdStrike outage shows that even automated security systems need a human touch. For startups & SMBs without dedicated security staff, Vention is here to bridge the gap. Let us help you stay secure and focused on growth: https://t.co/7J25dbcgkxhttps://t.co/tAtwqw1rYa
Arizona ranks fifth in the nation based on Vention’s findings following Maryland, New Jersey, Connecticut and Florida.
Credit: https://ventionteams.com Sources: Search volume data was gathered from Google Keyword Planner | Mobile banking usage survey results are from marketwatch.com | Penetration rate of online banking in the US is from statista.com
In Arizona, the utility of mobile banking is intuitive given the nature of Arizona’s development with tens of thousands of residents living in far-flung communities further from civic and business centers. But in other areas where mobile banking is prevalent, insufficient physical banking locations to handle customer density is a reasonable cause.
Vention reports, “In recent years, mobile banking has rapidly gained popularity, driven by the convenience and accessibility it offers. A recent survey conducted by MarketWatch found that nearly 75% of people prefer mobile and online banking over in-person banking.”
Marc Karasu, CMO at Vention, commented on the findings saying, “It’s fascinating to see which states are adopting the latest trends in banking technology more quickly and which are lagging.”
“What’s more, mobile banking popularity is set to keep rising, with research predicting that over 79% of the population will be using online banking by 2029.”
“Studies such as these are invaluable for the banking industry to identify where they need to focus their marketing efforts. Additionally, it highlights the states that could benefit from increased financial technology education and support.”
A report from the Arizona Republic Friday stated that the outage brought down point-of-sale systems at Circle K locations, caused delays and flight cancellations at Phoenix Sky Harbor International Airport, and disrupted police dispatch and communications systems all over the state.
Founder and president of Data Doctors Computer Services, Ken Colburn, told AZCentral that the situation could cause CrowdStrike and other cybersecurity firms to perform a “deep self-examination,” adding, “The silver lining of this is maybe we as an industry become better at this type of thing.”
Discussing the convenience of technology and interconnectivity as well as the risks he told the outlet, “You can’t really have it both ways.” He continued, “Every day, we as individuals make risk decisions. It is the nature of individuals. It’s the nature of business. It’s the nature of life. What we have to do is make sure that the risks that we’re taking do not exceed the value of what we’re getting out of our interconnected world.”
According to CNN, the outage, described as the largest IT outage in history, is expected to cost Fortune 500 companies in excess of $5 Billion in direct losses with healthcare and banking systems hit the hardest, suffering estimated losses of $1.94 billion and $1.15 billion respectively.
A radical Democrat legislator is seeking a return to a middle-of the-road Arizona district in the upcoming November General Election.
State Representative Keith Seaman is running for reelection in Arizona Legislative District 16. Seaman assumed office in January 2023 after narrowly finishing second in the district in the November 2022 General Election results, beating Republican challenger Rob Hudelson by 644 votes. Seaman now represents the district in the State House of Representative alongside his seatmate, Representative Teresa Martinez, a Republican.
Though the district is more moderate, Seaman has been anything but, as attested by his first term in the state house. On his campaign website, Seaman lists endorsements from left-leaning organizations, such as Arizona Education Association, Save Our Schools Arizona, National Organization for Women Arizona, and Sierra Club Grand Canyon Chapter.
Seaman’s votes in the Arizona Legislature show a pattern of being soft on crime. He voted against HB 2435, which would have “require[d] a person who is convicted of a third or subsequent organized retail theft offense to be sentenced as a category two repetitive offender” (2024). He also voted against SB 1583, which would have mandated that “a level one sex offender who commits specified sexual offenses is required to register on the internet sex offender website if the offender was sentenced for a dangerous crime against children” (2023). Additionally, he voted against SCR 1021, a ballot referral, which would “statutorily require an adult who is convicted of a class 2 felony for any child sex trafficking offense to be sentenced to natural life imprisonment” – should voters approve it in the upcoming November General Election.
The Democrat legislator also made controversial votes related to the border crisis facing his state. He opposed HB 2621, which would have deemed that the trafficking of fentanyl across Arizona’s border is a public health crisis. He also spurned SCR 1042, which “proclaim[ed] the Legislature’s support for the people and government of the state of Texas in its efforts to secure [the U.S.] southern border.”
He also took a stance against policies that would lead to economic prosperity in Arizona. Seaman voted no on SB 1260, which would have “reduced the state’s small business income tax rate to 2.5%” (2023). And he opposed SB 1370, the lemonade stand bill, which would have exempted a minor or a person who has not graduated from high school from the requirement to obtain a TPT license and pay TPT (use tax and local excise taxes) if the person’s business gross proceeds of sales or gross income is less than $10,000 per calendar year.
Seaman has also proven to be an ardent opponent of Arizona’s historic school choice program. Last year, he joined several of his colleagues in the legislature’s Teacher Caucus to castigate the ESA program. He posted, “As a retired educator, I support our public schools and will fight to ensure that they receive the funding they need. Arizona taxpayer dollars should not be used to fund private institutions while public schools struggle with budget cuts and a lack of resources for students.”
As a retired educator, I support our public schools and will fight to ensure that they receive the funding they need. Arizona’s taxpayer dollars should not be used to fund private institutions while public schools struggle with budget cuts and a lack of resources for students. https://t.co/HipX4ejOWs
On the education front, Seaman voted against HB 2629, which would have “establish[ed] November 7 of each year as Victims of Communism Day and require[d] the State Board of Education to create a list of recommended resources for mandatory instruction on the topic in certain public school courses.” He also registered a vote against HB 2779, which would have “specifie[d] that the State Board of Education, must require, in course of study and competency requirements, that students be taught about the Holocaust and other genocides for at least three school periods, or the equivalent, on at least two separate occasions during any of the 7th-12th grades.”
It wasn’t just what Seaman opposed that made him too radical for the district; it was also what he promoted that flew in the face of a likely majority of his constituents. Seamon cosponsored HB 2610, which would have created a state-owned bank (2023). He cosponsored HB 2068, which would have repealed designating school sports by biological sex (2023). And he cosponsored HB 2653, which would have established that “restaurants and other food service establishments in this state may only serve water and disposable straws to customers on request” (2023).
Arizona Legislative District 16 is one of the most competitive in the state with a 3.6% vote spread between Republicans and Democrats in the last nine statewide elections, according to the Arizona Independent Redistricting Commission. However, in those nine statewide elections, Republicans have emerged victorious in all nine.
Representative Seaman’s daughter, Stacey, is attempting to join him in the legislature next year. She is running for state senate and will go head-to-head against incumbent T.J. Shope for the right to represent Arizona Legislative District 16 constituents for the next two years.
Seaman is again the only Democrat running in the Legislative District 16 primary, as his party again attempts to gain an advantage in the General Election with this single-shot approach. He will face two Republicans who will emerge from a crowded primary later this month. Those Republicans are Martinez, Hudelson, Chris Lopez, and Gabriela Saucedo Mercer.
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A report released by the American Farm Bureau Federation has revealed that for the third year in a row, the national average consumer cost for putting on a typical Fourth of July cookout has increased. This year the average given for a conservative celebration feeding 10 is approximately $71.22. The increase of about 5% from 2023 would seem minor if it were not merely the latest increment of the 30% jump from 2019 prices enjoyed during the Trump administration.
The report contradicts a White House release from June 20 that claimed, “grocery inflation is, in fact, way down.” In a survey conducted by the Farm Bureau, volunteers across the country registered a record high result since the survey began in 2013. The volunteers priced out the constituent components of cheeseburgers, chicken breasts, pork chops, homemade potato salad, strawberries, and ice cream, with other common accompaniments.
AFBF Chief Economist Roger Cryan laid it out in a statement,
“Higher prices at the grocery store reflect a number of challenges facing America’s families. Lower availability of some cookout staples and inflation are hitting people in their wallets. Farmers are also feeling the effects of high prices. They’re price takers, not price makers. Their share of the retail food dollar is just 15%, but they still pay elevated fuel, fertilizer and other supply prices.”
The Bureau reported the price increases broken down by individual purchases:
2 pounds of ground beef, $12.77 (+11%)
2 pounds of chicken breasts, $7.83 (-4%)
3 pounds of pork chops, $15.49 (+8%)
1 pound of cheese, $3.57 (+1%)
1 package of hamburger buns, $2.41 (+7%)
2 ½ pounds of homemade potato salad, $3.32 (-4%)
32 ounces of pork and beans, $2.49 (+2%)
16 ounces of potato chips, $4.90 (+8%)
13-ounce package of chocolate chip cookies, $3.99 (+2%)
½ gallon of ice cream, $5.65 (+7%)
2 pints of strawberries, $4.61 (+1%)
2 ½ quarts of lemonade, $4.19 (+12%)
While a record high, the report detailed that costs have not exceeded the all-time high in 2022 crediting the adaptability of the American farmer. AFBF wrote, “Our volunteer shoppers had their most expensive Fourth of July grocery bill in the history of the survey this year. However, when adjusted for the high inflation rates plaguing the United States in recent years, the real value of their Independence Day party has not surpassed the previous record set in 2022. Though faced with disease outbreaks, inventory shortages and operating challenges, farmers and ranchers have adapted to increased demand across the world for U.S. products, providing safe, affordable food for your Independence Day celebration and every other day, showcasing the resilience of the American food system.”
In an interview with Yahoo Finance’s Jennifer Schonberger, U.S. Treasury Secretary Janet Yellen made the Biden administration’s case as to why food prices have not noticeably declined despite alleged improvements in the economy. She essentially blamed increased labor costs and grocery store profit margins claiming, “I think largely reflects cost increases including labor cost increases that um firms, um grocery firms have experienced, although there may be some increases in margins.”
On June 20, the Biden White House put out a report based on the most recent Consumer Price Index data alleging that not only “some grocery prices have fallen,” but that “wage growth has been strong, grocery purchasing power is up.”
A survey from Intuit Credit Karma reported by CNBC on June 17 seemed to align with the Farm Bureau’s assessment with 80% of Americans polled stating a noticeable increase in the cost of groceries with many having to skip necessities like rent or mortgage bills to afford food. They wrote, “That includes 28% who sacrificed other needs like rent or bills to pay for groceries, and 27% who occasionally skipped meals. Additionally, 18% have either applied for or considered applying for food stamps, while 15% rely on or have considered turning to food banks.”
Startlingly though, 53% of those asked told pollsters that they “earn too much to qualify” for food stamps or any other government assistance and despite their earnings are still struggling to make ends meet.
In a statement, AFBF President Zippy Duvall said, “As we celebrate this nation’s independence, we also celebrate America’s food independence. And while all families in America are paying more for food than before, we still have one of the most affordable food supplies in the world. In the United States, we are blessed with the tools to grow the food, fiber and renewable fuel to meet the needs of every family across the country.”
Duvall stressed the importance of Congress passing legislation to better support agriculture to ensure the nation remains dominant in the field. “The success of America’s farmers is due in part to partnerships in research, conservation and farm safety net programs that are made possible through a strong farm bill. It’s crucial that as we celebrate the holiday we also urge members of Congress to return to Washington and pass a new, modernized five-year farm bill. We cannot afford more delays and short-term extensions. Farmers, and every family in America, are relying on them to get the job done to ensure America continues to lead the world in agriculture.”
Congress’s Joint Economic Committee (JEC) warned that the Biden administration’s economic policies have caused an unsustainable debt crisis and historic inflation.
This assessment was announced formally earlier this week by JEC Vice Chairman and Congressman for Arizona’s first district, David Schweikert, through the 160-page Republican Response to the Council of Economic Advisers’ 2024 Economic Report of the President.
Schweikert stated in a press release that 2024 serves as a “critical juncture” for the nation’s fiscal health, one that transcends political parties.
“The challenge before us is neither Republican nor Democrat — it is our moral obligation to ensure American families aren’t left behind. Congress holds the keys to determine which path we choose,” said Schweikert. “We can either behave like adults and choose the path of fiscal responsibility or continue our partisan gamesmanship that will put the American dream further out of reach for future generations.”
Schweikert said that the problems and proposed solutions put forth by the JEC report were inherently bipartisan, focusing on common-ground economy boosters like a healthier population and secure social safety net programs.
“Those of us on the Republican side, we built a report that offered actual moral, great economic solutions instead of the election year rhetoric.”
— Joint Economic Committee Republicans (@JECRepublicans) June 21, 2024
The JEC assessed that the Biden administration’s demand-side policies financed by increased borrowing have placed unsustainable pressure on constrained supply. As a result, JEC predicted that debt-to-GDP would grow from 99 percent to 116 percent by 2034, with interest costs rising. JEC noted that the labor force participation rates haven’t recovered to prepandemic levels; historic mortgage payments for new homebuyers, the highest in 30 years; constraints on budding American industries due to new restrictions on trade; and the cost of clean energy subsidies amounting to $1.2 trillion over 10 years, despite emissions from electricity production declining.
Further exacerbation of the economy comes from an aging population, declining fertility rates, and decreased prime-age labor force participation among men, per the JEC. The aging population is anticipated to drive Social Security spending to 6 percent of GDP by 2035, an increase from the present 5.2 percent and the 1970s at 3.1 percent, though no major expansions have occurred in over 20 years. The JEC reported that one in nine prime-age men remain out of the labor force; if just 25 percent of those entered, the economy would grow by $215 billion.
JEC disputed the Biden administration’s belief that increased taxes of wealthier individuals would amount to their desired revenue, a dwarfed amount of around 1.1 to 2 percent of GDP compared to future deficits. JEC stressed that only reduction in spending would improve fiscal consolidation.
Another demographic with an outsized impact on the economy, according to the JEC, is the rapid increase in obesity. Excess medical expenditures are anticipated to amount to over $9 trillion, as well as federal government spending of over $4 trillion within the next decade. Labor productivity and supply reductions impacted by obesity are projected to cost nearly $3 trillion and $12 trillion, respectively.
As for a positive solution to the nation’s current and looming fiscal woes, JEC indicated that artificial intelligence could grow the economy and improve government efficiency.
JEC also issued a lengthy assessment of the Congressional Budget Office’s revised budget and economic projections for the next decade. This included a $400 billion increase in projected FY2024 deficit, with about 80 percent of the increase coming from President Joe Biden’s student loan forgiveness, the Federal Deposit Insurance Corporation failing to recover payments from 2023 bank failures quickly, new legislation, and higher than expected Medicaid outlays.
CBO recently released its updated budget and economic projections for 2024-2034 from the original forecast in February 2024. Below are some key takeaways from the revised estimates 🧵
— Joint Economic Committee Republicans (@JECRepublicans) June 19, 2024
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On Tuesday, June 18, 2024, the Gilbert Town Council will hold a meeting to adopt the boundaries of a redevelopment plan which could encompass up to 18% of the town’s landmass extending from its western boundary eastward to Lindsay Road and then south to Ray Road, an area of almost 9 ½ square miles. The Town is seeking to take this action under Arizona Revised Statue § 36-1471-1491 using laws intended to curb “slum or blighted areas,” terms that could hardly be used to describe the 22nd Best Place to Live in the U.S. by Money Magazine and the 2nd Safest City in America by Law Street Media according to Gilbert’s website.
The controversial move, which seems to carry the broad support of the Town Council, would allow Gilbert to bypass property taxes over the vast swath of real estate, opening a path for the town to engage in a property acquisition and lease scheme known as a Government Property Lease Excise Tax (GPLET) according to Arizona Tax Research Association President Kevin McCarthy.
Ironically, McCarthy, who has opposed this method of redevelopment for years, told AZ Free News that he penned an op-ed for the Arizona Republic crediting Gilbert with not employing this strategy.
“Most of your suburban cities have done very little of this,” McCarthy explained. “Gilbert to date has done none of it. Ironically, I wrote an op-ed for the paper, I don’t know, six, seven years ago that was in the Arizona Republic, crediting the city of Gilbert for doing development the right way and not doing it by harvesting the property taxes that are otherwise owed, making everybody else’s property taxes higher as a result of some development, not being on the rolls and shorting the schools, their monies, that kind of thing.”
Adding another wrinkle to the matter though, is a potential legal vulnerability to the strategy which could land the town in court. McCarthy continued, “And so now we’ve got them wanting to break through and begin using this tool. But what’s different about this now than even five years ago, the last time we made a legislative effort to narrow the use of it, is that there have been court decisions in this space that we’ve been involved in with the Goldwater Institute that have found that this mechanism violates the constitution’s gift clause.”
As reported by the Arizona Republic, a 2020 ruling found that a similar GPLET scheme between the city of Phoenix and developers of The Derby Roosevelt Row, involving a promised tax break, was illegal. In 2016 the Phoenix City Council okayed a plan that would have had developer Amstar/McKinley successfully avoid paying the appropriate property taxes for 25 years. For eight years under the law, the tax would be completely waived, and it would’ve been further reduced for an additional 17 years.
McCarthy explained how the process works: “I assume what happened in Gilbert: Gilbert’s probably got a new economic development director, or maybe it’s the city manager goes to some meetings, and here’s what fund the city of Phoenix is having harvesting the property taxes that otherwise would be owed on a development. To make development easier, the way these deals are usually done is a developer goes to City Hall, and if a city has a central business district that they’ve declared as slum and blight, they know that if they want to propose an $80 million multi-use building that is 30 stories high and have some residential apartment building and then commercial on the first floor, that kind of thing they can negotiate to have it qualify as a GPLET.”
During a Town Council meeting on April 16th, Gilbert Redevelopment Program Manager Amanda Elliott explained that under the law, a municipality must have a combination of nine findings for redevelopment “to eliminate or prevent your [town’s] signs of decline”
Under the applicable law (ARS § 36-1471), the statute states that a “’Blighted area’ means an area, other than a slum area, where sound municipal growth and the provision of housing accommodations is substantially retarded or arrested in a predominance of the properties by any of the following:
(a) A dominance of defective or inadequate street layout.
(b) Faulty lot layout in relation to size, adequacy, accessibility or usefulness.
(c) Unsanitary or unsafe conditions.
(d) Deterioration of site or other improvements.
(e) Diversity of ownership.
(f) Tax or special assessment delinquency exceeding the fair value of the land.
(g) Defective or unusual conditions of title.
(h) Improper or obsolete subdivision platting.
(i) The existence of conditions that endanger life or property by fire and other causes.”
This language is explicitly presented by the Town as the basis for the redevelopment plan. Further, under the finding for the necessity of the law, the legislature explained clearly, “That the existence of these areas contributes substantially and increasingly to the spread of disease and crime, necessitating excessive and disproportionate expenditures of public funds for the preservation of the public health and safety, for crime prevention, correction, prosecution, punishment and the treatment of juvenile delinquency and for the maintenance of adequate police, fire and accident protection and other public services and facilities, constitutes an economic and social liability, substantially impairs or arrests the sound growth of municipalities and retards the provision of housing accommodations.”
The law adds, “the acquisition of property for the purpose of eliminating the conditions or preventing recurrence of these conditions in the area, the removal of structures and improvement of sites, the disposition of the property for redevelopment and any assistance which may be given by any public body in connection with these activities are public uses and purposes for which public money may be expended and the power of eminent domain exercised.”
According to the Town Council, the moves toward this step have been gradual and ongoing for more than a decade.
Two Words Not Spoken: Property Taxes
During the presentation given by Elliot, the Town explicitly made the claims that the redevelopment plan “will not,” “Specify individual properties, specify commercial centers industrial complexes or neighborhoods, show up on a title report, displace residents or businesses, institute zoning changes, decrease property values or change the voter approved general plan.” However, conspicuously absent from that list is: property taxes.
McCarthy told AZ Free News that when a municipality negotiates to have a redevelopment qualify as a GPLET, “they are exempted from paying any property taxes on the improvement of the property for the first eight years, which is usually when the maximum amount of tax exposure is going to be on a property. That results in the schools not getting all the property tax money that they should get. The counties get zeroed out. The community colleges get zeroed out. The city themselves, it doesn’t get the property. If they do use property taxes, they don’t get any property taxes out of it. And the way that they execute this is that upon completion of the building, they literally deed the property back to the city.”
He added that a developer then wouldn’t have the property added to the tax rolls, “but it’s put on the tax rolls as an exempt property as any government property is, and [wont’] get a property tax bill for eight years.” In prior years, the period was as high as 25 years, but organizations like ATRA, working with the legislature, succeeded in getting that narrowed to eight. A bill was passed to lower it again to four years, but was vetoed by Governor Katie Hobbs. McCarthy noted, “Our argument to lawmakers was that at four years, it’s a lot closer to being able to pass the mathematical calculation of whether or not it’s a gift of public funds and therefore in violation of the constitutional gift clause.” The same gift clause that Phoenix ran afoul of in the Derby ruling.
McCarthy concluded, “Last thing I’ll say is that these property taxes are harvested because in many instances, these deals are agreed to by the cities because there’s a mutual benefit between the developer and the city to exempt the property from paying property taxes and enter one of these GPLET deals, and that is they can enter into any number of agreements that allow them both to benefit financially and maybe not. So not just the developer benefits the city.
So in the example I gave you that the deal might include me as the developer paying for infrastructure that otherwise may not be owed by the developer, but would be a city obligation. Whether the utilities that would be going in the city would bring up to the boundary of the property, any number of improvements in city of Phoenix, it could include, if it’s going to have multifamily, which is a lot of our stuff that we’re seeing in Tempe and Phoenix, a lot of apartment buildings where I as a developer grant concessions to the city council that a certain percentage of the apartments are going to be saved for low-income housing.”
The implications for property taxes also could impact the Gilbert Unified School District considerably as McCarthy observed with properties that “normally would be paying a million dollars a year in property taxes to Gilbert Unified,” not doing so. State funds would be used to subsidize the difference. However, that isn’t so for school bond measures, which are voter approved as are school overrides. “In those instances, the tax rates are going to be higher than they otherwise would’ve been if that property would’ve been on the tax rolls. But even there, the schools really don’t lose money.”
“It’s the other taxpayers that are on the tax rolls that get screwed because the property isn’t paying taxes.”
Gilbert Mayor Brigette Peterson made particular mention during the April meeting that the council is “not trying to turn the town of Gilbert into a city because that’s always a bone of contention with our residents. But it is focused on making sure that this town doesn’t become a city that we’ve seen in the past go downhill. We’re trying to make sure that we’ve learned from other cities’ mistakes in the past and do what’s best for our community to move us into the future and forward.”
Peterson added, “The other thing that we heard at that last meeting that was so well attended was um they they felt like the decisions had already been made. We have not made any decisions, and tonight even we’re just offering more feedback. We’re not voting on anything at a study session, so this still has a lot of time to go through more of a process and to hear from the public too.”
A mailer sent to Gilbert residents in the proposed ‘Blighted area’ indicated that the next meeting is scheduled for June 18, 2024 at 6:30 PM.
