A ballot measure to protect Arizonans from the rise of unabated homelessness in communities was overwhelmingly passed by voters in the General Election.
Earlier this month, Proposition 312 received almost 60% of the vote, cruising to a smooth victory on Election Night. The measure, which was referred to the ballot from the Arizona Legislature, stipulates that “property owners may apply for a tax refund for expenses incurred due to a governing authority’s failure to enforce certain public nuisance laws on or near the owner’s real property.”
The legislative vehicle for the measure, HCR 2023, was sponsored by House Speaker Ben Toma. It passed both chambers in the Arizona Legislature with bipartisan support and was transmitted to the Secretary of State’s Office in March of this year.
In a statement after the successful passage of the bill out of his chamber, Senate President Warren Petersen said, “There are instances where local governments routinely and repeatedly fail their citizens by not enforcing laws. An example of this would be the City of Phoenix’s handling of the former homeless encampment known as ‘The Zone.’ This area was not only a public safety and public health disaster for those who camped there, but it was also a detriment to the livelihoods of small business owners who set up their shops in the area.”
Petersen added, “Money talks, and as a way to encourage municipalities to enforce the law, Speaker Toma and I teamed up to sponsor HCR 2023/SCR 1006. This measure is a ballot referral that would protect law-abiding citizens. If approved by voters, property owners would be allowed to request a refund for expenses incurred to mitigate the problem, up to the amount of their property tax liability. The funds would be deducted from the local government’s state shared revenue.”
Speaker Toma also had said, “Business owners and residents alike are having their property stolen, vandalized, or terrorized and are desperate for help. That’s why I sponsored HCR2023, to hold our local governments accountable to our community members and to help provide some relief for property owners who have suffered damages because of a city’s purposeful failure to provide the public health and safety services we all pay for.”
The Arizona Chamber of Commerce and Industry, which was instrumental in promoting the proposition, issued a statement following the General Election win, writing, “Arizona voters have sent a clear message: Government, do your job. They do not want our state to become the next San Francisco or Los Angeles. Prop 312 is a win for property owners, businesses, and everyday Arizonans who too often shoulder the costs of unaddressed homelessness.”
“Arizona voters have sent a clear message: Government, do your job. They do not want our state to become the next San Francisco or Los Angeles. Prop 312 is a win for property owners, businesses, and everyday Arizonans who too often shoulder the costs of unaddressed homelessness. pic.twitter.com/IPLhHq5UAf
The Goldwater Institute, which also pushed for Prop 312’s passage, also took a well-deserved victory lap after the positive result. The organization’s President and CEO, Victor Riches, stated, “The voters sent a clear message this election cycle: they demand their tax dollars be used to enforce the law and address rampant homelessness. Now that Prop 312 is law, business and property owners will not be left holding the bag when municipalities refuse to do their job.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
The city of Phoenix will be in court on Wednesday over a lawsuit against its arrangement waiving $8 million in property taxes for a private real estate developer downtown.
The Arizona Court of Appeals will hear the case, Paulin v. City of Phoenix. The Goldwater Institute filed the lawsuit in May 2022.
Goldwater Institute Vice President for Litigation Jon Riches claimed the property tax exemption violated both the Arizona Constitution and court precedent prohibiting the use of taxpayer dollars to benefit private interests.
“Arizona courts have been clear time and again: taxpayer dollars are to be put to public use, not to benefit private, special interests,” said Riches.
Phoenix waived the property taxes on a downtown high-rise development project by assuming the legal title from real estate developer Hubbard Street Group and leasing the property back to them. The city did so in order to capitalize on Arizona’s Government Property Lease Excise Tax (GPLET) abatement provisions. In so doing, the city of Phoenix ensured the Hubbard Street Group protection would be saved from having to pay millions in property taxes for the term of the lease — eight years. After that better part of the decade is up, the city will return the title back to the developer.
The Goldwater Institute maintains that this workaround adopted by the city amounts to, essentially, tax evasion: an abuse of GPLET and a loss of a revenue stream at a burden to other taxpayers.
As reported previously, the city of Phoenix assumed ownership after it declared the developer’s project, “Skye on 6th,” to be part of a slum or blighted area. As part of their arrangement with the city’s assumption of their legal title to the development, Hubbard Street Group agreed to pay over $500,000 in rent to the city, $30,000 to two school districts, and dedicate 10 percent of its residential units to workforce housing.
Skye on 6th is marketed as “the height of luxury.” The most affordable rooms (studios listed at 400 square feet) start at $1,500 a month. The most expensive rooms are on their penthouse floor, where rent starts at $4,500 a month and goes up to over $6,700 a month.
The project cost nearly $88 million to develop.
One of the represented taxpayers in the case, Bramley Paulin, successfully sued the city last year, Paulin v. Gallego, when he challenged the city’s restriction on temporary signage for the Super Bowl LVII. The Maricopa County Superior Court ruled the city’s resolution on signage was an unconstitutional restraint on free speech and delegation of government power.
Paulin and the other taxpayer in the case, Mat Englehorn, reside and own businesses in the Phoenix area.
The oral arguments are scheduled to occur on Wednesday at 9:30 am.
In 2020, the Maricopa County Superior Court ruled against a similar GPLET arrangement between the city of Phoenix and another high-rise developer.
In his ruling, Superior Court Judge Christopher Coury questioned whether GPLET could be relevant any longer given the tendency for abuse.
“This judicial officer questions whether the death knell for the GPLET’s usefulness has rung,” wrote Coury.
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Arizona Attorney General Kris Mayes is facing serious criticism after legal threats issued to families using the Empowerment Scholarship Account (ESA) program. The threats slammed the brakes on purchasing “supplementary materials” considered self-evident in need by the State Board of Education.
As reported by the AZ Mirror, a July notice from Democrat Attorney General Kris Mayes’ office told the director of the ESA program that they may be in violation of Arizona law by issuing reimbursements to families for supplementary education materials, (i.e. flash-cards, periodic tables of the elements, early books for new readers) without requiring that parents provide documentation that it is required under a curriculum.
In the six-page letter, Assistant Attorney General Kathryn Boughton wrote, “Approving ESA funds for materials that have no nexus to the student’s actual curricular needs contradicts the intent of the program and constitutes a payment of funds made without authorization of law.” She went on to claim that doing so, “may enable account holders or vendors to engage in fraudulent behavior, such as purchasing items with ESA funds solely for the purpose of resale.”
She advised that director, John Ward stop authorizing the reimbursements immediately.
Faced with a potentially damaging legal battle, Superintendent of Public Instruction Tom Horne told parents in a statement that he would have to concede the point for now. “When I received the attorney general’s message, I sent it to the most knowledgeable people in my department,” Horne wrote.
“I asked them to look at it, not as an advocate, because we all disagree with the Attorney General, but in a neutral way, as though they were judges to determine if they could give me a reasonable assurance of success. They analyzed the statutes on which the attorney general relied, and indicated to me that as a neutral judge, they would rule against me if I made a fight out of it and refused to comply. Getting into a fight and losing, would be much more damaging.”
However, the tune from Mayes’ office changed sharply just one day after the Goldwater Institute filed lawsuit challenging the blatantly partisan determination. Attorneys from Goldwater representing two Arizona mothers wrote, “Following …unsuccessful legislative attempts, the office of Arizona Attorney General Kris Mayes initiated a new effort in July 2024 to dramatically limit the use of ESA funds, calling for a prohibition on the purchase of basic educational materials, including books, workbooks, and other ‘supplementary materials’ unless parents could provide an explicit ‘curricular’ document justifying the use of each specific book title or material for their child.”
“Arizona law expressly allows the purchase of such materials with ESA funds, however. In fact, state lawmakers added clarifying language in 2020 with the explicit purpose of ensuring that such purchases would not be denied, following the actions by former State Superintendent Kathy Hoffman that had restricted the purchase of many such items. The State Board of Education has likewise approved rules for the program explicitly permitting the purchase of these materials without additional documentation.”
The AG’s Office then began a campaign of feverishly walking back their determination with a statement responding to the suit. “The Attorney General has simply stated what is required by law,” adding, “The law doesn’t prevent parents from purchasing paper and pencils, but it does require that materials purchased with ESA funds be used for a child’s education.”
But this isn’t what Mayes’ office said in July when they demanded Superintendent Tom Horne’s department “promptly cease approving supplementary material expenses without the requisite documentation of a curriculum nexus,” no matter how self-evidently educational the materials are, as Matt Beienburg,the Director of Education Policy at the Goldwater Institute pointed out in an Arizona Daily Independent op-ed.
As Beienburg notes, Mayes’ office, far from simply targeting extravagant spending, threatened ESA administrators with legal liability unless they applied the same requirements on the list of obviously educational materials approved in the State Board of Education’s ESA Handbook: things like “books,” “workbooks,” “writing utensils,” “atlases/maps/globes,” “calculators,” “flash cards”, etc.
“Thesematerials are what Attorney General Mayes’ intervention is now blocking en masse—unless parents can cite a specific pre-established curriculum calling for the individual book title or resource,” Beienburg explained.
“In other words, the Attorney General’s office still demands that flashcards and other self-evidently educational materials be allowed only if a parent can produce an arbitrary piece of paper calling for their specific use.
The Attorney General’s attempted public deflection away from this fact demonstrates the absurdity of her summer demands. Perhaps she really does believe that families should have to justify their purchases of books like ‘Brown Bear Brown Bear, What do You See?’ and ‘Little People Who Became Great’ to wiser government bureaucrats. But for the rest of us, such restrictions are clearly nonsensical and—under state law, illegal.
The Attorney General is supposed to uphold state law, not torture it to impose her policy preferences. We encourage the Attorney General to withdraw her summer demand letter, or else acknowledge flatly that her position is that families should have to justify why they picked ‘Brown Bear Brown Bear, What Do You See?’ to read to their own children.”
Arizonans looking for more information about a ballot measure that addresses the state’s growing homelessness issues can access vital research from a local think tank organization.
Late last month, the Common Sense Institute Arizona (CSI) released a report “on the economic and fiscal impact of Proposition 312, finding that there is indeed a link between the increase in homelessness and declining property values.”
According to CSI, “Proposition 312 is aimed at tackling Arizona’s growing homelessness crisis, offering property owners the opportunity to receive tax relief for costs incurred due to unmitigated public nuisances, such as homelessness, vandalism, property crime, and drug use.”
The report from CSI found “that under the status quo, property owners in areas with unmitigated public nuisances are seeing their values decrease in real value [while] homelessness is on the rise.”
“The rising rates of crime, homelessness, and drug activity in key areas of Phoenix appear to have taken a toll on property values and overall economic activity,” said Glenn Farley, Director of Policy & Research for CSI. “In this kind of environment of declining relative property values and higher crime rates, there are ongoing problems requiring mitigation – like security and cleanup costs. In practice, though, the real impact is likely to be preventive: local governments may ultimately be more proactive about mitigating these nuisances if this proposal is enacted than they are today.”
The Arizona-based Goldwater Institute took a position in support of Proposition 312 ahead of the November General Election. On its website, the influential organization wrote, “We saw it in Phoenix’s homeless Zone when the city allowed lawlessness to run wild. We saw it in Tucson, too. Amid rampant homelessness, hardworking Arizona taxpayers are being forced to bear the burden of a city’s refusal to do its duty to protect public health and safety, paying out of pocket to install fences, hire security, clean up garbage, human waste, and other hazardous materials themselves. Prop 312 ensures that when government fails to enforce existing laws regarding illegal camping, loitering, pollution, and other nuisances, taxpayers will no longer be forced to foot the bill.”
Proposition 312 was made possible by the Arizona State Legislature earlier this year, when Republicans led the way to pass HCR 2023, which, if eventually passed by state voters in November, would “allow a property owner to apply for a primary property tax refund if the owner documents expenses caused by a city, town or county adopting a policy, pattern or practice which declines to enforce existing laws or the maintaining of a public nuisance” – according to the overview provided by the state House.
In a statement after the successful passage of the bill out of his chamber, Senate President Warren Petersen said, “There are instances where local governments routinely and repeatedly fail their citizens by not enforcing laws. An example of this would be the City of Phoenix’s handling of the former homeless encampment known as ‘The Zone.’ This area was not only a public safety and public health disaster for those who camped there, but it was also a detriment to the livelihoods of small business owners who set up their shops in the area.”
Petersen added, “Money talks, and as a way to encourage municipalities to enforce the law, Speaker Toma and I teamed up to sponsor HCR 2023/SCR 1006. This measure is a ballot referral that would protect law-abiding citizens. If approved by voters, property owners would be allowed to request a refund for expenses incurred to mitigate the problem, up to the amount of their property tax liability. The funds would be deducted from the local government’s state shared revenue.”
The chamber’s president also noted that “all Senate Democrats voted ‘no’” on the referral.
The key findings from CSI about Proposition 312 are as follows:
“Problem increasing: Crime, drug overdoses, unsheltered homelessness, and other public nuisances have risen dramatically in Arizona and the greater Phoenix area since 2019. But the impacts are disproportionate: the problem has become more visible in certain parts of the city. This creates a negative economic impact for those parts of the city where local officials have failed to enforce existing laws
“Property Value Loss: Commercial properties in Phoenix affected by unmitigated public nuisances have seen market rent appreciation fall to just 15.7% between 2019 and 2023, compared to the citywide rate of 30.2%. This represents up to $2.1 billion in lost property value due to slower appreciation in areas with high levels of homelessness, crime, and public nuisances.
“Increased Crime: In areas with high public nuisance activity, the average crime rates for drug offenses, burglaries, robberies, and arson were between 3 to 5 timeshigher than the Phoenix average, driving up costs for property owners due to increased security measures and property damage.
“Impact on Businesses: Businesses located in areas with elevated public nuisance levels experience significantly lower property appreciation and higher vacancy rates. The economic toll of unmitigated public nuisances has made it harder for businesses to thrive in these areas.”
During the legislative process this year, representatives from Barry Goldwater Institute for Public Policy Research, QuikTrip, Arizona Free Enterprise Club, Arizona Chamber of Commerce, Arizona Food Marketing Alliance, and the National Federation of Independent Business, indicated their support for the proposal on the Arizona Legislature’s Request to Speak system. Representatives from the League of Arizona Cities & Towns, Living United for Change in Arizona, Arizona Coalition to End Sexual and Domestic Violence, Professional Fire Fighters of Arizona, Arizona Association of Counties, County Supervisors Association of Arizona, Arizona Housing Coalition, and several state cities and towns, signed in to oppose the measure.
Interested voters can read the full CSI report regarding Prop 312 here.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Arizona Superintendent of Public Instruction Tom Horne issued a statement of support for a lawsuit challenging Attorney General Kris Mayes’ restrictions on the state’s school choice program.
Horne said that he maintains concerns that Mayes will demand the return of Empowerment Scholarship Account (ESA) funds from families based on her interpretation of the laws governing allowable expenses.
In July, Mayes advised the Arizona Department of Education (ADE) that, per her interpretation of the law, parents should no longer be reimbursed for supplementary educational materials not expressly outlined in curriculum.
Though Mayes acknowledged that the statute on which she based her interpretation didn’t offer a definition of “supplemental materials,” she argued in her letter to Associate Superintendent John Ward that the State Board of Education’s definition of the term should apply: “relevant materials directly related to the course of study for which they are being used that introduce content and instructional strategies or that enhance, complement, enrich, extend or support the curriculum.”
Mayes’ application of this definition requires explicit mention of all supplies required within a curriculum: even things like pencils and erasers. The ADE handbook doesn’t require documentation of items “generally known to be educational” in their purpose, such as pencils and erasers.
The attorney general directed Ward to provide documentation of total supplementary material expenditure from 2019 to present, as well as funds spent on curriculum materials without curriculum documentation and approved textbooks lacking proof of requirement by a qualified school or eligible postsecondary institution.
In response to Mayes’ directive, the Goldwater Institute sued on behalf of ESA mothers Velia Aguirre and Rosemary McAtee. The two mothers homeschool their children: Aguirre homeschools all three of her children, while McAtee homeschools seven of her nine children.
In their argument, the Goldwater Institute argued that Mayes’ directive was not only in violation of the law, it was a jeopardy to the existing backlog of tens of thousands of purchase orders — an issue that would inherently impact the education of many children relying on those ESA funds.
The Goldwater Institute also pointed out in a press release that not even public and private school curriculums necessarily list supplementary items such as pencils and erasers.
In a statement, Horne expressed hope that the Goldwater Institute would prevail in its lawsuit.
“The Department of Education concedes the argument of the Goldwater Institute. When this issue first arose in July, my concern was that the Attorney General could force Empowerment Scholarship Account holders to return funds if they did not comply with her office’s interpretation of the law. This lawsuit will settle the issue in court and my sincere hope is that the arguments made by Goldwater will prevail.”
Horne had issued an anticipatory show of support for a hypothetical lawsuit from the Goldwater Institute in a response on the ADE page for ESAs immediately following Mayes’ letter. Horne clarified that a prior court decision bound ADE from having the standing to file lawsuits.
The superintendent said that he doesn’t agree with Mayes’ interpretation that supplementary materials are required to be tied to curriculum. However, Horne said that Mayes’ directive was one his department advised him that he couldn’t challenge and win.
As of Monday, over 78,600 students were enrolled in the ESA Program.
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