A proposed amendment to Arizona’s tax laws could make it significantly harder for cities and counties to raise taxes and fees. Senate Concurrent Resolution (SCR) 1008, sponsored by Senate President Warren Petersen, proposes requiring a two-thirds majority vote from municipal and county governing bodies before they can increase assessments, taxes, or fees.
SCR 1008 builds upon Arizona’s existing tax-related voting requirements. In 1992, Proposition 108 established that any net increase in state revenue—including tax hikes or new fees—requires a two-thirds vote in both chambers of the state legislature. More recently, Proposition 132, passed in 2022, mandated that any tax-related ballot initiative or referendum must receive at least 60% voter approval to become law.
Currently, municipal and county governments must provide a 60-day public notice before imposing new business taxes or fees. However, SCR 1008 would go further by requiring a supermajority vote at the local level before such increases could be enacted.
Key provisions of SCR 1008 include:
A two-thirds vote by a city’s common council would be required to increase any assessment, tax, or fee.
A two-thirds vote by a county’s board of supervisors would be required for similar increases.
The measure declares tax and fee regulation a statewide concern, limiting the ability of local governments to adopt different rules.
The proposal must be approved by voters in the next general election before becoming law.
If approved by the legislature, the measure would head to the ballot for voters to decide its ultimate fate.
SCR 1008 reflects ongoing efforts by Arizona lawmakers to place additional restrictions on tax increases at both the state and local levels. Supporters argue that requiring a supermajority vote will protect taxpayers from excessive government fees, while opponents contend it could limit the ability of local governments to fund critical services such as infrastructure, public safety, and education.
The bill narrowly passed the Senate Government Committee with a 4-3 vote and now awaits further legislative consideration.
If approved by voters, SCR 1008 would significantly change the way local governments in Arizona raise revenue, ensuring that any tax or fee increase has broad political support before becoming law.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
Republicans are searching for ways to “pay for” their tax cuts. Democrats want the rich to pay more tax. Here’s a solution that should make everyone happy.
House Ways and Means Committee chairman Jason Smith is suggesting a tax on the $840 billion college endowments. These endowments will soon eclipse $1 trillion in size – which is more money than the entire GDP of many countries.
It’s high time that bloated and entitled universities pay “their fair share” for the government services they use.
Why not? Their professors forever lecture us about tax “fairness,” but the schools where they teach a few hours a week for their munificent salaries are the very embodiment of mostly-white “privilege.” They are are the richest institutions in the world that go untaxed.
The cost of this leakage to the tax base is going to grow exponentially as this generation of billionaires (Bezos, Gates, Zuckerberg and others) pass on trillions of dollars – much of it will enter into the vaults of the universities. These are capital gains that have NEVER been taxed – and never will be.
Why is this a problem?
A good and just tax system has a broad base – so everyone pays – but a low rate so the tax system doesn’t discourage, work, saving and investment. This means no loopholes and carve outs that allow the rich to keep their fortunes out of reach of the tax man.
What makes the college endowment scam even worse is that the preponderance of the dollars don’t go to small colleges or community colleges, but rather the Harvards, Yales, Stanfords and Princetons that are already layered with gold and service the elite of society.
It makes no sense that millionaires and billionaires can make seven, eight and even nine- figure donations to their Alma mater and these funds escape the taxes that all the rest of us pay.
It’s even worse than that. Colleges pay almost no income taxes and generally avoid paying property taxes even though their vast tracts of valuable land are in or near struggling inner cities.
The universities openly boast to their donor base: contribute to us and you can avoid paying the estate tax and capital gains tax on your billions. Why aren’t liberals offended by this tax escape hatch?
I have no problem with a deduction for legitimate charities like soup kitchens and homeless shelters and orphanages. But Northwestern and Stanford need tax breaks? Has anyone been to their glitzy campuses.
There are at least a dozen schools bulging with $10 billion endowments and scores more with more than $1 billion. We should call these schools Loophole U.
What public purpose is advanced by these storehouses of wealth?
Harvard’s near $50 billion endowment is so large that the school could charge free tuition to every student from now until kingdom come – and still not run out of money. Yet Harvard still charges $100,000 a year for tuition and room and board.
But this is the real sin of this unworthy tax loophole. Even with these giant endowments, college tuitions have been rising at two to three times the rate of inflation. The argument that tax-free donations make colleges more affordable has proven to be patently false. The bigger the endowment the more the schools charge students and their parents – and taxpayers.
One of the best ways to help inner cities would be to require all universities (and hospitals) to pay property taxes. This would broaden the tax base in poor cities where nonprofits have grabbed the most valuable real estate. Instead of chasing people out of the cities like Boston, Chicago, Philadelphia and New York with exorbitant taxes, dinging the big U down the street would allow cities to CUT their taxes for everyone else.
By the way, colleges and hospitals make use of city services even more than homeowners and mom and pop businesses do. Why should they not pay for these services?
Richard Vedder a famous economist at the University of Ohio has noted that “one of the most regressive policies in the tax code is the subsidies to the billion-dollar universities. This only Makes the Rich, richer.”
In a famous scene in the movie Animal House, Dean Wormer lectures to one of the students who is facing expulsion: “Fat, drunk and stupid is no way to go through life, son.”
Ironically, that could describe more than 100 overly-endowed universities today that are more like investment houses that happen to have classrooms and students roaming around. Colleges need to pay their fair share, and the revenues should be used to help pay for the Trump tax cuts – which benefit everyone. That sounds fair to me.
Stephen Moore is a contributor to The Daily Caller News Foundation, a visiting fellow at the Heritage Foundation, and a co-founder of Unleash Prosperity.
A bill to amend the Arizona Constitution to prohibit the state, cities, towns, and counties from tracking, taxing, or limiting vehicle miles traveled has passed a House committee and is moving to a floor vote. If approved by the Arizona House and Senate, HCR2035 will bypass Governor Katie Hobbs and go straight to the voters for approval.
Scot Mussi, President of the Arizona Free Enterprise Club (AZFEC) said in a statement, “As we have seen in other states, governments left to their own devices will succumb to radical attempts to track, tax, or limit their citizens’ transportation miles.”
He added, “These environmental schemes have no place in a free and prosperous society. In this divided state government, it is critical for our Republican-led Legislature to proactively send this constitutional amendment to the voters to protect our state from these authoritarian policies. I’m thankful to the lawmakers who have supported this bill, and I look forward to seeing it pass the full House in the near future.”
The measure has been supported by AZFEC since at least March 2024 when the organization warned that “tracking, limiting and taxing our vehicle miles traveled is a dream scenario for those pushing a radical environmental agenda,” citing the Biden administration’s pilot program for a vehicle miles traveled (VMT) tax baked into the Inflation Reduction Act.
In a post to X, the AZFEC explained, “HCR 2035 is the first of its kind in the nation. As a constitutional amendment, it would prohibit the state, cities, towns, and counties from imposing a Vehicle Miles Traveled tax and limiting or monitoring vehicle miles traveled by an individual – whether they are using a gas-powered car or an electric vehicle. If approved by the Arizona House and Senate, the measure would then be transmitted to the Secretary of State to be included on the November 2026 General Election ballot to be considered by voters, bypassing the Governor’s Office.”
🚨Official Statement on House Committee Passage of HCR 2035- Freedom To Move Ballot Referral
Yesterday, the Arizona House of Representatives Committee on Ways and Means approved HCR 2035 – the freedom to move ballot referral. The measure passed along party lines. If given the…
In January, the corresponding measure passed the Senate Government Committee as SCR1004 and is now pending a vote on the Senate floor as well. The bill was introduced by Arizona Senator Jake Hoffman.
The Arizona chapter of the Republican Liberty Caucus offered its endorsement of SCR1004 alongside SB1092 which work in tandem.
Donald Trump’s renewed pledge to “Make America Great Again” requires nothing less than reigniting economic growth and prosperity. Wealth creation is essential. Yet as Congress prepares to extend and expand upon Trump’s landmark Tax Cuts and Jobs Act of 2017, he can take matters into his own hands by issuing an executive order to index capital gains for inflation.
Taxing inflationary “phantom” capital gains is an unfair and ill-advised policy that punishes risk and success.
Consider this: You invest $1,000, and after four years of Joe Biden in the White House, you sell that investment for $1,100. But since inflation raged during Biden’s tenure, the $1,100 you receive will be worth less in real terms than the $1,000 you invested. And yet, under current law, you will pay a tax on your $100 capital “gain.”
Talk about perverse!
“As has been well documented,” writes Alan Auerbach, University of California economist, “realized capital gains may be subject to tax rates that easily exceed 100% of real gains in the presence of inflation.”
But it’s the law. And not only would eliminating it be the fair thing to do for investors, it would ignite a surge of American prosperity.
Eight years ago, the late Treasury economist Gary Robbins estimated that indexing capital gains for inflation would, by 2025, create an additional 400,000 jobs, grow the U.S. capital stock by $1.1 trillion and boost GDP by roughly $500 billion. Because capital gains were never indexed, average household income today is $3,600 lower than it could have been otherwise.
However, it’s never too late to start doing the right thing.
Congress has repeatedly toyed with indexing capital gains. In fact, indexing capital gains used to be a bipartisan issue. In the early 1990s, congressional Democrats touted indexing as an effective way to boost economic growth and benefit workers.
“If we really want to increase growth,” said a youthful Chuck Schumer, the then-future Senate minority leader, “there are proposals that we can do. I would be for indexing all capital gains, savings and borrowings.”
Having mastered the ways of the D.C. swamp, Schumer now opposes indexing capital gains. Listen to Congressman Schumer, not Senator Swamp.
Indeed, as Trump emphasized in 2019, “Indexing is something that a lot of people have liked for a long time. It’s something that would be very easy to do. It’s something that I am certainly thinking about.”
Looking forward, the Congressional Budget Office estimated last month that federal capital gains tax receipts will total $2.8 trillion over the decade ahead. If only one-fourth of those tax receipts—a conservative estimate—are due to taxing phantom gains, American taxpayers will pay $700 billion in taxes on income that doesn’t exist.
Opponents of capital gains indexation say the subsequent revenue loss would be too great. But inasmuch as inflationary gains should not have been taxed in the first place, a revenue loss is a good thing. It represents the correction of a tax injustice.
The second-order effects that Robbins documents should remove any reservations based on revenue loss. Without the federal tax on inflationary gains, asset prices will adjust until they reach a new, higher equilibrium. Investors will see their portfolios appreciate bigly.
It’s a safe bet that millions of American investors and pensioners would choose a Dow Jones average of 50,000 with indexation over a Dow Jones average of 44,500 without indexation.
As taxpayers realize real capital gains, the federal government will collect billions of dollars in new tax revenue. Federal tax revenue may ultimately be higher with indexation, not lower.
There is the question of whether Trump has the legal authority to issue an executive order instructing the Treasury secretary to issue new regulations indexing the capital gains cost basis for inflation. It comes down to whether the governing Internal Revenue Code section covering the definition of the word “cost” is sufficiently ambiguous to allow regulatory reinterpretation. Congress never specifically mandated that “cost” was to be determined in nominal terms, nor did it prohibit the use of real valuation.
According to a watershed 2012 paper by Charles Cooper and Vincent Colatriano in the Harvard Journal of Law & Public Policy, “jurisprudential developments over the last two decades have confirmed . . . that Treasury has regulatory authority to index capital gains for inflation.” With that justification, Trump has little reason to hold back.
James Carter is a contributor to The Daily Caller News Foundation and a principal with Navigators Global. He previously headed President Donald Trump’s tax team during the 2016-17 transition and served as a deputy assistant secretary of the Treasury for then-President George W. Bush.
An Arizona lawmaker is working on legislation to protect his constituents from government overreach.
This week, State Senator J.D. Mesnard introduced SCR 1009 to “remove an exception from the Arizona constitution that allows government bureaucrats to assess uncapped fees without first getting a two-thirds vote from the legislature.” If passed by both chambers of the Arizona Legislature, the measure would be referred to a future statewide ballot for voter approval.
🚨FOR IMMEDIATE RELEASE: Senator Mesnard Introduces Ballot Referral to Protect Arizonans from Government Overreach with Raising Taxes and Fees@JDMesnard
According to the press release issued by Mesnard, a Republican, SCR 1009 was deemed necessary because of a loophole that was uncovered from a previously approved voter initiative, Proposition 108, back in 1992. Prop 108 mandated a two-thirds vote of the Arizona Legislature to increase taxes, fees, and assessments on the state’s taxpayers. However, as was discovered in later years, there was an exception that was granted for fees that would be assessed by state officers or agencies. That loophole, per Mesnard, has led to hundreds of millions of dollars of fees for Arizonans, leading to the need for a measure like SCR 1009 to correct the problem and close the loophole that was being exploited by rogue bureaucrats.
In a statement announcing the introduction of the ballot measure, Senator Mesnard said, “The people have entrusted their elected officials with the power to make policies, including assessing any taxes or fees, not delegate that responsibility to unelected government officials. When Arizona voters approved Prop. 108, their intentions were clear; they wanted to set a higher threshold when imposing a greater financial burden on the people, not make it easier to do so. The current law is highly attractive to those who wish to game the system and impose fees that they know will not receive a supermajority vote from the legislature. This bill is a significant step towards protecting Arizona taxpayers from unchecked financial burdens while ensuring the legislature cannot shirk its sacred duty.”
The release from the longtime east valley legislator added that “by having a proper check and balance in place, the ballot referral will ensure that the state government is not permitted to make major financial decisions without first getting approval of two-thirds of the legislature, as the people intended. This measure will help restore fiscal accountability, halt government overreach, and protect taxpayers from unauthorized financial obligations.”
SCR 1009 will first be considered in the Arizona Senate. If it is successful in this chamber, the measure will move to the Arizona House of Representatives for consideration. If both the state Senate and House approve of this measure, SCR 1009 will be transmitted to the Arizona Secretary of State’s Office for inclusion on the 2026 November General Election ballot, bypassing the Governor’s Office entirely.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
