Lawmakers hoping to block the reinstatement of a state property tax that was suspended in 2006 must act by Wednesday, Maricopa County Treasurer Charles Hoskins said Monday.
If reinstated this year by the Legislature, the property equalization tax would bring in about $250 million, most of which would go to the K-12 school system. It would also cost homeowners and businesses additional money in taxes each year, according to the Arizona Chamber of Commerce.
The temporary suspension is set to expire this year if the legislature and governor don’t agree to stop the property equalization tax’s reinstatement.
Conservative legislators are looking to repeal the tax, which they say will only keep the state from recovering economically.
“We need to lure new businesses out to the state and encourage the ones already here to keep growing,” said Rep. Nancy McClain, R-Bullhead City, who sits on the House Appropriations Committee. “That is the purpose of all [the Republicans’] tax cut proposals.”
County treasurers, who are in charge of printing tax bills for residents, said the legislature can’t wait much longer if it wants to repeal the tax.
Hoskins said his office has to make a decision about whether or not to include the cost of the equalization tax on constituents’ bills Wednesday.
To delay it any further would keep his office from being able to mail out the bills by the Oct. 1 deadline, Hoskins said.
“We can’t print tax bills until we know whether or not the tax is being repealed,” Hoskins said.
Drafting and printing the bills could take more than a month. If the process is delayed, more taxpayers will end up making late payments, he said.
“If we reach the end of September without printing tax bills, a lot of people will not be able to make their delinquent date,” Hoskins said. “It would be like getting your credit card bill the day before it’s due.”
Opponents of the tax include state treasurer and former senate appropriations committee member Dean Martin, who said reinstating it would put extra stress on homeowners facing foreclosure and businesses on the brink of shutting down.
“Anything you do to make it more expensive to buy or own property just prolongs the recession,” Martin said.
Martin, who sponsored the 2005 bill to temporarily suspend the tax, added that schools across the state would gain more funding if the economy recovers quickly.
“[The state] would benefit more by getting out of the recession as quickly as possible. That would generate a lot more revenue than any new tax,” he said.
Robin Hiller, executive director of the Tucson-based advocacy group Voices for Education, said repealing the tax would cost the already-ailing Arizona school system about $250 million in lost revenue. This would result in larger classes and more teacher layoffs, she said.
Hiller said the state’s economy is hurt whenever its education system is cut or reduced, adding that the state’s recent cuts to the K-12 and university systems will keep businesses and employees from investing in Arizona.
“[Businesses] want to invest in a state where people are graduating from high school and have the skills to enter the workforce,” she said. “We are already a low wage state, and [a tax repeal] would only add to the problem.”
Reach the reporter at derek.quizon@asu.edu.
