Arizona Republicans highlighted their state’s low tax rate after a recent signing of a baseball star with the hometown team.
Late last month, Corbin Burnes, a free agent pitching star, decided to sign with the Arizona Diamondbacks, shocking most onlookers, who had predicted that he would likely end up with another Major League Baseball suiter.
One report shared that Burnes made his decision based on Arizona’s lower tax rate. Burnes had been wooed by the Toronto Blue Jays and San Francisco Giants – two jurisdictions with significantly higher taxes than the Grand Canyon State.
Corbin Burnes turned down more money per year and overall but the big benefit in addition to the $35M per year, low state tax in Arizona and opt out after two years is he and his young family live in the Phoenix area. @BNightengale said CB had bigger offers from SF and Toronto
Former Arizona Governor Doug Ducey added, “I’ll be looking forward to watching Corbin Burnes in a Dbacks jersey next year – and very glad to see that Arizona’s lowest flat tax in the nation is what brought him to AZ! Sorry Gavin Newsom [&] Justin Trudeau!”
I’ll be looking forward to watching Corbin Burnes in a @DBacks jersey next year — and very glad to see that Arizona’s lowest flat tax in the nation is what brought him to AZ!
Burnes had been reportedly offered more money by the aforementioned teams before deciding to ink a deal with the Arizona Diamondbacks.
According to a post on X, the top tax rate in California is 14.4%, and the top federal and provincial tax rate in Toronto, Ontario is 53.53%. Arizona’s tax rate is 2.5% in comparison.
Arizona owes its low tax rate to the work of Governor Ducey and legislative Republicans, who enacted the transformational tax bracket in 2021.
Two staunch free-market advocates, Tim Phillips (President of Americans for Prosperity) and Grover Norquist (President of Americans for Tax Reform), wrote a piece in Newsweek, praising the accomplished feat of the Arizona Legislature, spearheaded by State Senator J.D. Mesnard and Ducey. They stated, “Arizona, on the other hand, provides a good example: lower the tax rates to let people keep more of what they earn and invest in what they care about most. Limit government spending to grow no faster than the incomes of the citizens who pay the taxes. Create a magnet for job-creating investment and hardworking Americans who simply wish to be left alone to work hard, take care of their families and support their communities.”
Phillips and Norquist added, “The Arizona reform is a positive model and one that should be followed by other states and the federal government.”
When the Arizona Supreme Court gave the green light for these tax reforms to go into effect, Arizona Free Enterprise President Scot Mussi said, “Today’s decision from the Arizona Supreme Court is a big win for taxpayers in our state. The legislature passed historic tax cuts last year that benefit all Arizona taxpayers. It’s time for Invest in Arizona and out-of-state special interest groups to accept this reality and stop making a farce of the referendum process.”
Mesnard touted the progress of his historic legislation in a campaign newsletter in January 2023, saying, “The historic tax reform that I championed in 2021 is now in effect for income earned this year – a full year ahead of schedule thanks to strong government revenues. Valued at more than $2 billion, this reform reduced individual tax rates to 2.5%, resulting in a tax cut for every single Arizona family and Arizona having the lowest flat tax in the nation.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Arizona renters and landlords alike will get to breathe a sigh of relief this month when the Transaction Privilege Tax (TPT), applied by cities to rental payments every single month, is eliminated. While the cities that will no longer enjoy this source of tax revenue and lobbying groups like the League of Arizona Cities and Towns cry foul, local Republicans who pushed for the reform and the renters who pay it are celebrating.
Seventy-five cities across the state charge TPT on rentals ranging from 1.5% to 4%. Depending on rental rates, this could mean monthly savings of about $20-$50 per month based on estimates.
In a statement posted to X in November, Arizona Senate President Warren Petersen touted the tax elimination writing, “Its happening. Renters are about to get relief from the rental tax repeal passed by the Republican led legislature. The rental tax repeal was an important part of our majority plan to deliver inflation relief. To get the governors signature we had to delay the effective date to Jan 1 2025. Many people said the Dems would take the majority and put the tax back in place. Fortunately for renters we held the Senate and the House. Here is an email from a property manager letting the tenants know their rent will be going down.”
Its happening. Renters are about to get relief from the rental tax repeal passed by the Republican led legislature. The rental tax repeal was an important part of our majority plan to deliver inflation relief. To get the governors signature we had to delay the effective date to… pic.twitter.com/1qnhGWEa93
Jake Beeson of Beehive Property Management told AZFamily, “It’s going to mean quite a bit for some tenants. We work with the Community Housing Partnership as one of our clients, which has low-income housing, and those rents are between $900 and 1,000 a month. So for a low-income family to have a 2% discount every month doesn’t sound like a lot, but if you’re paying $900 in rent every month, that’s $18. $18 is a whole month of discounted lunches at your kid’s school.”
The outlet noted that the rates in the valley can range from 2% in Mesa to 2.3% in Phoenix or 3% in Cave Creek. Some cities charge as much as 4%.
But not everyone sees the rental tax relief as a positive. Lee Grafstrom, a tax policy expert with the League of Arizona Cities and Towns told Fox10, “You’re not cutting any of the services that citizens are requesting and requiring, so, we still have to do all the same amount of work. We just have this much less money to do it.”
He stressed that cities could find themselves in budget shortfalls, expecting a combined loss of $230 million in tax revenue annually.
“We have to find a way to either cut services or make up that shortfall,” Grafstrom told Fox10. “This is a minor piece of a solution to a much larger problem, in terms of housing affordability.”
The League said in a statement, “Cities and towns across the state are facing a loss of over $230 million in their budgets, which support essential services like police, fire, parks, and more. Without state funding to make up for these losses, local governments will be forced to make tough decisions to balance their budgets, such as cutting jobs and services or raising local taxes—both unpopular choices. Local leaders are working to address these challenges before the repeal takes effect in January.”
Congressman David Schweikert (R-AZ-01) offered his fellow Congress members a gift in his weekly speech on Thursday. The former Arizona State Treasurer and nation’s de facto accountant presented solutions to the problems “that directly contribute to rising costs and decreasing wages in America.” In a press release last week, Schweikert shared video of his speech in which he points out the Consumer Price Index (CPI) for November reflected a 2.7 percent price increase from November of last year, indicating continuing inflation while wages continue to stagnate.
The Arizona Republican stressed the need for Congress to pursue a modernized immigration approach based on talent and merit in 2025, which promotes both productivity and wage growth while simultaneously offsetting declining birth rates and population decline.
Schweikert explained, “Here’s the reality: if the president is looking at you in the camera, and telling you [we have] the best economy ever—that’s not factual—but why don’t you feel it? It’s because much of America is poorer today than the day President Biden took office. If you live in the Phoenix-Scottsdale area—my home—if you don’t make 27 percent more today than the day President Biden took office, you are poorer.
Having someone telling you, ‘Oh, the economy is great,’ and yet, you’re having trouble paying for things… The reason we made this board, functionally, for you to maintain your purchasing power. If you are an average American in my district, these numbers are substantially higher because I am from a district with some of the highest inflation in America. If you are not making $1,115 more a month—because that’s what you have to be [making] from four years ago—your purchasing power… you’re poorer.
And I think that’s the reason that voters turned and said, ‘Okay, I see these Democrats running lots of ads saying crazy things,’ but yet, it turns out the voters are actually really smart. They would look at their checking account. They’d look at the cost of their kids’ clothes. They’d look at the grocery store and try to figure out why in the last week of the month they were losing their minds under stress.”
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The congressman stressed the incoherence of current immigration policy, which invites foreign nationals into the U.S., educates them in our institutions, and then ships them back to their home countries rather than encouraging skilled legal immigrants to become citizens. In the release, Schweikert notes, “When wages go up, we actually take in more tax receipts and then begins the cascade event of changing society and the economy for the future and the better.”
Regarding reforming the tax code to favor research and development and immigration laws to favor talent-based immigration, he posited, “One of our economists is trying to model what would happen if you said we’re going to do expensing of research and development because we know that pops economic growth. But if you also did talent-based immigration at the same time, you may get a multiplier effect. This is thinking like an economist. This is what we have to do to get ourselves out of this hole.”
The Maricopa County Board of Supervisors’ Public Safety Funding Committee (PSFC) presented its findings last week and has recommended that it pursue a 20-year extension of the existing voter-approved tax rate of 1/5th of a cent, set to expire in 2027. It also recommended the expansion of various partnerships to address the funding needs of adult and juvenile correctional facilities, correctional healthcare, and other county programs.
According to a press release from the Board of Supervisors, Chairman Jack Sellers said, “Providing for public safety is a core function of our government, and how we fund those efforts should be transparent and open to public feedback. We established the PSFC to ensure a wide range of views are considered as we determine how to prioritize and pay for evolving public safety needs. I’m grateful for the committee’s diligent work and look forward to a thorough review of their recommendations.”
The committee, established in January, conducted a series of public hearings, toured existing jail facilities, and interviewed several figures within the system before brining its recommendations for long-term funding and other changes to several established policies.
The Board of Supervisors largely appeared to concur with the recommendation to extend the funding, with Supervisors Clint Hickman, Bill Gates, and Steve Gallardo voicing support. Hickman said, “The Jail Excise Tax brings in about $300 million in revenue per year and has been an effective way of funding our public safety needs as the county grows, at a low burden to the individual taxpayer.”
He added, “I agree with the committee’s recommendation that an extension of the tax, at the current rate, is the best way to make sure we continue to live in a safe community where people can thrive economically.”
The 165-page report detailed policy recommendations touching “Reentry, Community Services and Coordination, Programming and Courts, Capital, and Data and Long-Term Initiatives.”
The Committee explained:
“In the first category, they suggested pursuing partnerships for crime prevention and reentry, engaging with the state on Medicaid waivers for pre-trial and pre-release individuals, and engaging in efforts to strengthen the behavioral health system.
The second category focused on maintaining funding for probation and diversion programs, upholding treatment standards, coordinating Initial Appearance Hearings with the City of Phoenix, and discussing juvenile placement policies.”
In addition it recommended replacing outdated facilities, improving the county’s Intake, Transfer and Release facility, enhancing security at the Durango campus, and addressing shortages in the county’s correction workforce.
Vice Chairman Thomas Galvin noted, “The PSFC engaged with residents and key stakeholders honestly and openly over the past year, and now with their recommendations, we can move forward in a united manner to keep our streets safe and support our law enforcement officers.
Chaired by John Lewis, the former mayor of Gilbert and CEO of East Valley Partnership, the committee is composed of nine community members from fields ranging from law enforcement, correctional health, criminal justice, government, and business.
As noted by KTAR News, the Board of Supervisors may agree with the extension of the Jail Excise Tax, and could lobby for it, but it has very little choice in the matter. Ultimately Maricopa County cannot place it on the ballot. That power falls to the Arizona Legislature and the sitting governor to pass and sign into law.
Given the past disconnect between the Republican-dominated Arizona Legislature and Democrat Governor Katie Hobbs, it is uncertain how successful any effort to extend an existing tax would be, or how well received it would be by the voters.
The city of Phoenix is one of the cities with the most debt in the country, according to a new study.
Per a study from LendingTree, Phoenix ranks 18th among the 50 largest metropolitan cities for debts held. The average Phoenix resident has a debt surpassing $39,000. That’s higher than the average nonmortgage debt across all 50 of the country’s largest metropolitan cities (about $37,800).
The average Phoenix resident’s income amounts to $79,600 according to Census Bureau data, above the median household income for the rest of the country (over $75,100). The average Phoenix resident debt amount is nearly half of the city’s median income.
LendingTree retrieved its data using anonymized credit reports from around 210,000 users on their platform from April through June of this year across the 50 largest cities. Nonmortgage debt includes auto loans, student loans, credit cards, personal loans, and all other types of debt excluding mortgages.
Nearly 97 percent of consumers in Phoenix have nonmortage loan debts, per the study. That tracks with the debt averages for rest of the 50 most populated metros: on average, 97 percent of residents across all those cities have nonmortage debt.
45 percent of Phoenix residents also have auto loan debt, 85 percent have credit card debt, 24 percent have personal loan debt, and 24 percent have student loan debt.
Phoenix ranked even higher with its average auto loan debt, placing eleventh with the average auto loan debt sitting at nearly $14,000. That’s higher than the average auto loan debt for the state, which amounts to around $6,000. Auto loan debts accounted for the greatest portion of average debts held by Phoenix residents, which is also the case for 26 of the other 50 major metros included in the study.
Average credit card debt in Phoenix amounted to just over $8,200, average personal loan debt amounted to about $4,200, and average student loan debt amounted to over $10,300.
The average Phoenix resident’s credit card debt came out higher than the state’s: the average for all of Arizona amounts to over $6,300.
At the end of last year, Arizona ranked among the top ten states for the highest average unsecured personal loan debts: around $12,300. Arizona also ranked among the top 20 for highest average household debt increases from last year to this year: an increase of over $700, making total household debt in the state amount to over $429.6 billion.
The city’s student loan debt is lower than that of the state. As a whole, the state has an average student loan debt of nearly $35,700, with about 902,600 borrowers living in the state.
Phoenix was the only metro city from Arizona listed on the top-50 ranking by LendingTree.
The top three cities for debts held were all in Texas: Austin, San Antonio, and Houston, in order of highest to lowest.
The three cities with the lowest amounts of debt, in order from least to greatest, were: San Jose, California; Louisville, Kentucky; and Milwaukee, Wisconsin.
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A major infusion of public bond-funded dollars into Arizona’s first “nonprofit Green Bank,” the Sustainable Home Improvement Loans of Arizona (SHILA), was announced last week by the Maricopa County Industrial Development Authority (MCIDA). The MCIDA was appointed by and answerable to the Maricopa County Board of Supervisors. The $500,000 investment will reportedly be “focused on providing affordable financing solutions for low- and moderate-income homeowners.”
In a press release, Maricopa County Supervisor Clint Hickman said of the decision, “Maricopa County is committed to fostering economic growth and supporting sustainable communities for all residents. By investing in SHILA, we are helping low- and moderate-income homeowners access affordable financing options for energy-efficient improvements that will lower their utility bills, renovate their homes, and improve their overall quality of life.
This partnership not only strengthens our local economy but also contributes to a more resilient and sustainable future for Maricopa County. We are excited to support SHILA’s work and the positive impact it will have in our community.”
SHILA, equipped with the infusion of funds from the MCIDA, will reportedly assist 425 Maricopa County residents with $5 million worth of energy efficiency projects within the next three years. These projects include homeowners upgrading their insulation, roofing, door, window, electrical, and HVAC upgrades to increase energy efficiency with the average project costing $12,000.
As Maricopa County's green bank, we're excited to be attending our first OFN conference. Looking forward to all the new connections and information available. #OFN40#cdfi#Maricopacountypic.twitter.com/0YPD67T0cV
— Sustainable Home Improvement Loans of Arizona (@SHILAAZ0823) October 21, 2024
Ty Lorts, CEO of SHILA explained, “We are honored to receive this foundational investment from the Maricopa County Industrial Development Authority. With their support, we can start making home improvement financing accessible for families who need it most. This funding will allow SHILA to begin transforming homes across Maricopa County, helping residents access a healthier living environment, lower utility bills, and have a greater quality of life.”
The MCIDA, founded in 1973 was created with the mandate to help “create and maintain jobs within Maricopa County and assists residents of the County to achieve a better standard of living and way of life.” But with a catch: it is to accomplish this with no government money involved. To that end, the Maricopa County Board of Supervisors’ appointed Board of Directors issues revenue bonds which are exempted from Arizona State taxes and, if compliant with IRS code, can also be exempt from federal taxes. Through these bonds, the MCIDA’s projects are funded.
Since its founding, the MCIDA has issued over $12 billion in bonds and invested millions into expanding access to affordable housing.
Speaking with KJZZ, Lorts explained that the nonprofit licensed just six weeks ago is working to help support affordable housing with a different strategy as opposed to predatory lenders or banks with high HELOC and credit card interest rates. “As money gets paid back in, we’re able to grow the business to a point where we don’t need any more outside money; where we are serving the outside community not just over the next five years but over the next five generations,” Lorts said.
“We’re trying to keep people in their homes, so they don’t have to seek alternative housing; so they don’t lose the house they’ve been in for the last 30, 40 years,” he added.
