04/01/2008
CONTACT: Michelle Bolton, 602-263-7690 or Tony Malandra, 415-664-9685
Nation's best example of corporate greed and timorous lawmakers right here in Arizona
PHOENIX -- Small businesses be damned, homeowners should pay more, and basic governmental services can jolly well suffer. These simultaneous messages emerged from a House Ways and Means vote yesterday on Senate Bill 1260, which garnered only three votes in favor of it. Five members voted against passage and two were absent.
SB 1260 attempted to wean giant developers and big business off of the Government Property Lease Excise Tax (GPLET) over a period stretching 30 years. "The best economic tool a city, county or state can offer is fair and equitable taxation," said Michelle Bolton, NFIB/Arizona state director, who testified in favor of SB 1260. "The GPLET is a perverse monstrosity of a law that unfairly treats the real economic engine of Arizona -- and that isn't big business -- and puts needless tax-paying pressure on small businesses and homeowners to make up the difference in lost revenues -- all to elevate a few giant development companies and big businesses into the stratosphere of financial lucre. The system is gamed and it's criminal."
The GPLET, created in 1996, allows governments to lower, or even abate, property taxes in development deals where they own the land but lease it to the private sector. GPLET, a much lower rate based on the square footage of a project, instead of the traditional method, becomes too much of a temptation to resist.
As a result of runaway GPLETitis, Scottsdale Princess Resorts received this tax benefit, and, until last year, US Airways paid next to nothing while shedding jobs. City Scape, Arizona Center and Cabela's sporting goods are some of the many big-name beneficiaries of a law their smaller competitors and counterparts would never have access to.
Bolton took particular aim at state Rep. John Nelson's remark that "small business wouldn't be around without big business," which she labeled ridiculous, ignorant and insulting. "Civilization's first businesses were small businesses and their primacy of place as the economic engine of all economies in the world still remains," she countered, pointing to the facts that 99 percent of all businesses in Arizona are small businesses, 90 percent of which have fewer than 20 employees; that small businesses produce half of America's Gross Domestic Product and generate two-thirds of all net new jobs.
Bolton praised Sen. Ken Cheuvront for sponsoring SB 1260, which passed out of the upper chamber as an entirely different piece of legislation and was then gutted and replaced with language reforming the GPLET. The reason it was done this way, said Bolton, is that Senate President Tim Bee is sitting on another bill, SB 1360, which would do the same.
