04/03/2008
Supporters vow to appeal their case
CONTACT: Melissa Sharp, 202-314-2068
Washington, D.C.--Small businesses in Phoenix were disappointed by a decision issued yesterday by Maricopa County Superior Court Judge Robert Miles finding that the city's tax-subsidy practice that provides millions of tax-payer dollars to one out-of-state developer is constitutional.
The case decided by Judge Miles was Turken v. Gordon. In this case, six Phoenix-based small business owners filed a lawsuit against the city of Phoenix, arguing that the tax-rebate contract the city signed violates three provisions of the Arizona Constitution: the Gift clause; the Equal Privileges and Immunities clause; and the Special Laws clause. The National Federation of Independent Business Small Business Legal Center, the nation's leading advocate for small business in the nation's courts, filed a friend-of-the-court brief in this case supporting the small business owners and urging the court to declare this practice unconstitutional.
“While yesterday's decision was disappointing, it is not the final word on this issue,” said Karen Harned, executive director, NFIB Small Business Legal Center. “We fully expect this case to be appealed, and when it is NFIB will stand beside these small business owners and work hard to convince the appeals court that this practice is detrimental to small businesses and should be ruled unconstitutional.”
The majority of NFIB members in Arizona believe that the government should not provide tax incentives to businesses to locate or relocate to a particular city or town. When a municipality commits to providing substantial tax-rebates to a single business, it must make up lost revenue by increasing the tax burden on all taxpayers. The effect of such development incentives is that small businesses and their patrons are forced to subsidize their competitors.
“Payment of taxpayer dollars in the form of subsidies to a select few businesses is not sound public policy and is not fair to the small businesses and other taxpayers who foot the bill,” said Harned.
To learn more about the NFIB Small Business Legal Center please visit www.NFIB.com/legal.
