By Corinne Murdock |
On Wednesday, the State Senate approved legislation lowering the percentage of assessed valuation for commercial property to 15 percent. SB1093 would reduce the property assessment ratio gradually over the next five years.
According to the bill sponsor in a press release, State Senator J.D. Mesnard (R-Chandler), explained that the aim was to ensure that Arizonans have more money to spend and, ultimately, invest back into the economy.
“Property taxes are a critical issue to all businesses, but especially for our smaller establishments. This bill will provide broad relief to our job creators,” said Mesnard. “Reducing the tax burden allows our small businesses to invest more money in their workforce and in expanding operations.”
The bill passed along party lines in both the House and Senate.
SB1093 would impact class one property: commercial and industrial properties that include those for mining, telecommunication companies, utilities, standing timber, airport fuel delivery, oil and gas production, pipelines, shopping centers, golf courses, and property devoted to any commercial or industrial use. Additionally, SB1093 prohibits fire district tax from increasing beyond $3.75 per $100 of assessed valuation.
State Senator Kelly Townsend (R-Mesa) commended Mesnard for the bill.
Legislature Democrats disliked that funds accrued from those property taxes would no longer be available, arguing that the state would turn elsewhere for the lost funds: homeowners, sales taxes, and the general fund.
State Senator Lela Alston (D-Phoenix) insisted during the Senate floor vote that the legislation would result in a tax increase on homeowners down the road.
State Representative Mitzi Epstein (D-Chandler) offered similar sentiments last month during the House floor vote. She added that the fund was a slippery slope mindset that would ultimately lead to steep cutoffs of education funding. State Representative Pamela Powers Hannley (D-Tucson) argued that the bill was based on trickle-down economics that she said only made the rich richer and the poor poorer.
“This bill picks winners and losers with the regular folks being losers in the state of Arizona,” said Powers Hannley.
State Representative Kelli Butler (D-Phoenix) added that the bill would result in county deficits that must either be mitigated or result in cuts. Butler said that the deficit would hurt rural areas the most.
“If you want to continue to fund law enforcement, like I do, if you want to continue to fund really important things in your counties and rural Arizona, you need to vote against this bill,” said Butler.
State Representative Neal Carter (R-Queen Creek) rebutted the arguments put forth by his Democratic colleagues. He insinuated that their calculations were simplistic and neglecting the potential for exponential and possibly unprecedented growth inspired by low tax rates.
“In reality, the loss is less than it may appear by simply subtracting the revenue that’s brought in,” said Carter.
State Representative Shawnna Bolick (R-Phoenix) noted that the assessment ratio is applied across the state equally and would eventually make Arizona more competitive with Texas, Colorado, and Utah.
SB1093 now heads to Governor Doug Ducey for approval.