ATRA: AG Audit Harshly Critical of GPLET

ATRA

By Jennifer Stielow

A recent audit by the Arizona Auditor General (AG) revealed many critical flaws surrounding the calculation, collection, distribution, and reporting of the Government Property Lease Excise Tax (GPLET).

According to the AG’s review of 268 leases, nearly half are currently under eight-year abatement; and therefore, no revenue is being collected. Forty-five percent of the leases examined are paying GPLET under the rate structure that existed prior to 2010 that imposes a dramatically lower tax burden than the current GPLET rates. Of all the leases audited, only 16 (6%) are subject to the new GPLET rates. As a result, the AG found that the 2010 GPLET revisions have not resulted in increased revenue as expected because so few leases pay tax under the new rate structure.

Additionally, the AG found many examples where the incorrect GPLET was calculated because either the wrong rates were used and/or not all of the property subject to GPLET was included. In fact, in certain instances lessees failed to remit GPLET payments altogether.

The audit also found that the distribution of GPLET revenues by county treasurers was done incorrectly by using the distribution percentages for property tax rather than GPLET, which are different. Furthermore, although county treasurers are required to assess penalties and interest on delinquent payments, none did so.

There are several reporting requirements under GPLET, one of which requires county assessors to annually report the value of all GPLET property, which includes properties under abatement, to the Arizona Department of Education (ADE). The AG found that only three of the seven counties that have GPLET deals reported the valuation of GPLET properties to ADE. This is a major cause for concern since underreporting GPLET values to ADE requires the state general fund to pay more in state aid payments to school districts than otherwise required. Overall, auditors’ interviews with city, town, and county officials indicated a general lack of understanding of GPLET requirements and recommended the Legislature modify statutes to address GPLET deficiencies.

This special audit was a requirement of the 2010 legislation that enacted several revisions to GPLET. The purpose of the audit was to determine if the revisions resulted in a viable revenue source in lieu of an ad valorem property tax on possessory interests for counties, cities and towns, community colleges, and school districts.

Originally enacted in 1996 as a successor to the possessory interest tax, GPLET allows government to enter into lease agreements with private entities to use government-owned property for private use and be subject to an excise tax in lieu of a property tax. By 2010, cities had dramatically expanded their use of the eight-year abatement. Additionally, the tax liability under the existing GPLET rate structure was not only considerably lower compared to the property tax, but the entire tax obligation disappeared at fifty years.

In an effort to address some of the inequities with GPLET, the 2010 legislation limited the size of Central Business District (CBD) boundaries for leases who qualify for the eight-year abatement. A new rate structure was implemented that nearly doubled the existing rates, and while rates under the old structure dropped 20% every ten years until reaching zero by the fiftieth year, the new rates are adjusted annually by the producer price index for new construction indefinitely. Finally, the legislation prospectively limited GPLET deals to a maximum of 25 years, including any abatement period, at which time the government lessor is required to convey the property to the prime lessee and the property is then placed on the property tax rolls.

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The Arizona Tax Research Association (ATRA) is the only statewide taxpayer organization representing a cross section of Arizona individuals and businesses. Organized in 1940, ATRA is the largest and most respected independent and accurate source of public finance and tax policy information. ATRA represents taxpayers before policy makers at the state and local level. ATRA’s fundamental belief is that every governmental expenditure is directly related to a tax. ATRA’s goal is efficient statewide government and the effective use of tax dollars through sound fiscal policies.

POLL: Maricopa County Voters Say Raise Age to 21 to Buy Tobacco, Keep Coyotes in Glendale

MBQF
MarsonMedia

Poll also shows voters want Arizona Coyotes to stay in Glendale

(Phoenix, AZ) — Only adults 21 and over should be able to buy tobacco products, according to a new poll of Maricopa County voters.

Of the 584 respondents to a poll conducted Dec. 29 by MBQF Consulting and Marson Media, 72 percent said they support increasing the age to buy tobacco from 18 to 21. Just 28 percent oppose the move.

The poll also found Maricopa County voters prefer the Arizona Coyotes remain in Glendale, 55-45. And finally, Maricopa County approve of Indian tribes opening Las Vegas-style casinos off traditional reservation land by a margin of 45-39.

“It is clear among all political stripes that voters want to increase the legal age to buy tobacco to 21,” said Barrett Marson, CEO of Marson Media. “As cities in Maricopa County consider these proposals, they can move forward knowing voters support the move.”

Mike Noble Added, “What was interesting was that support to increase the legal age was basically the same between Republicans, Democrats and Independent voters.”

Despite spotty attendance performance throughout its years in Glendale, voters don’t support moving the Arizona Coyotes to a downtown Phoenix or East Valley location, the poll found. The team has said it will explore a move to a new arena downtown or could build an arena on the Salt River Pima Indian Community near Scottsdale.

“The Coyotes are locked in a battle with Glendale but voters actually prefer the team stays in the Gila River Arena,” said Mike Noble, CEO of MBQF Consulting.

As for Indian gaming, county voters appear OK with tribes opening casinos off of traditional reservation land. The Tohono O’odham recently opened a casino near Glendale though it lacks table games like blackjack that are at other casinos.

“Voters don’t mind Indian casinos in the metropolitan area even if they are operated by tribes far away,” Marson said.

In the automated telephonic non-partisan survey of 584 high efficacy voters, conducted on December 29, the survey calculates a 4.06% theoretical margin of error, plus or minus in percentage points.

For more information about this survey, or a summary of topline data and wording, please contact Mike Noble or Barrett Marson.

Dial “D” for Disappointing

Jeff Dial D

Dear Arizona Taxpayer:

You may not know Arizona state Senator Jeff Dial.  But his disappointing record on fiscal policy issues affects you and your family. CONTACT DIAL NOW to TAKE ACTION.  Or join AFP-Arizona’s field teams (info below) as we go door-to-door in Dial’s district, letting taxpayers in his district know about his record:

— Senator Dial voted against Governor Doug Ducey’s fiscally conservative balanced budget.  His failure to support the budget almost caused the state to spend millions of dollars we can’t afford.

— Senator Dial single-handedly blocked passage of the Truth in Spending budget transparency bill, by not even allowing the bill to be heard in his committee.

— Senator Dial scored 47 percent on AFP-Arizona’s 2016 Legislative Scorecard, earning him the designation of “Friend of Big Government.”

— Senator Dial’s cumulative score on the Legislative Scorecard is 51 percent, earning him the designation of “Needs Improvement.”

The 2016 legislative session that begins in January will give Senator Dial another chance to get it right and vote for fiscally conservative policies.   Tell Senator Dial to stop listening to the teacher unions and the Big Spenders and start listening to the hard-working taxpayers in his district.

Use THIS LINK to TAKE ACTION and contact Senator Dial.

To join our field teams for door canvassing action in Dial’s district (Ahwatukee/Tempe/West Chandler), contact Leslie White atlwhite@afphq.org

For Liberty & Prosperity,

Tom Jenney
Arizona Director
Americans for Prosperity
tjenney@afphq.org

Paid for by Americans for Prosperity, the nation’s largest free-market grassroots organization.  To get on our email list and help us encourage Senator Dial do the right thing, contact us at infoAZ@afphq.org or (602) 478-0146.

Who is responsible for raising your property taxes?

AFP

Dear Arizona Taxpayer:

Maricopa County Treasurer Hos Hoskins made headlines with the policy letter he included with recent property tax bills for Maricopa County residents.  (Note for those living outside of the “Great State of Maricopa”: this does apply to you, as well.)   Hoskins has re-opened an interesting policy debate about the extent to which property tax burdens have been shifted from business property taxpayers to residential property taxpayers (or vice-versa, depending on your point of view).  We have included some links below about that debate.

Setting aside the debate about the burden shift, Hoskins made a claim that is very counterproductive to the efforts of property taxpayers to fight for tax relief.   Multiple times in his letter, Hoskins made the following claim: “Voicing your opinion to anyone other than your legislators will change nothing.”

That claim is highly misleading.

Consider just a few examples from your property tax bill.  If you look closely, you will see several line-item levy amounts from several different local government taxing authorities: your K-12 school districts, your community college district, your city government, your county government, and multiple special taxing districts.  Each of those taxing districts have authority, completely independent of the state Legislature, to raise (or more rarely, lower) your property tax levy.

(Note: Always focus on the levy, which is the actual number of dollars you must pay, rather than the rate.  If local officials brag to you that they have lowered property tax rates, hold onto your wallet and ask them what is going to happen to your actual levy.)

Many Arizona school districts and municipalities have put budget override and bond measures on your November 3 ballot.  If passed by voters, those measures will increase your property tax bill.  Those measures were not placed on your ballot by the Arizona Legislature.  They are on your ballot, and driving up your tax bill, at the sole discretion of local elected officials.  Your school district board members are under no legal (or in our opinion, moral) obligation to try to push for an override.

For example, Phoenix Union school board members could have decided that spending $9,627 per student  (in current expenditures, not counting capital and other costs) is enough.  Even without the override, Phoenix Union will spend more than $9,000 per student – enough money to put two teachers in every classroom of 25 students and pay each of those teachers $75,000 per year.   Instead of trying to raise taxes via an override, the Phoenix Union board members could cut excess administration and other waste.  See our Phoenix Union flyer HERE, and contact us at bwitbeck@afphq.org if you want us to send you a flyer for your own school district.

We as citizens and taxpayers must hold the local officials in our cities, counties and school districts accountable for the dollars they choose to spend.  See AFP’s Local Government Scorecard to learn more about holding your local officials accountable.

Back to the interesting debate on the business-residential property tax levy shift…  For a defense of the shift and Proposition 117 (which passed in 2012), go here for the response of the Arizona Tax Research Association to the Hoskins letter.  Or go here for Senator Debbie Lesko’s response.

Boaz Witbeck
Arizona Policy Analyst
Americans for Prosperity

All Hands on Deck in Tempe! Rally To Stop The TUHSD Override!

By Peggy McClain

Are you tired of governments demanding more of your paycheck with negative results?

Say NO to Tempe Union High School Override (TUHSD)

All are invited to join us on Tuesday, 10-13-15 at 2 PM at the TUHSD office at 500 W. Guadalupe Tempe  85283 (NW corner of Guadalupe and Kyrene)

Let’s let the TUHSD Superintendent and Governing Board know they cannot fool us anymore.  Other districts will be taking notice as these override elections are occurring in many districts.

VOTE NO:  Why does TUHSD need 28,000 devices “for the students” if the student population is 13,600?

VOTE NO:  This is a permanent tax increase as overhead, staff, and increased bandwidth have not been budgeted for.

VOTE NO: There is NO PARENTAL CONTROL over who your student will interact with on-line nor what content your child will download.

VOTE NO: This tax increase WILL NOT lead to more money for teachers but will lead to a decrease in teachers.

(LINK)

Prop 104: Phoenix Doubles Budget!

By Tom Kouts

Original reasons given in support of the light rail:

  • pollution reduction
  • traffic congestion reduction
  • vehicles will be removed from the road

An environmental impact study, conducted by the city of Phoenix as a requirement by the Federal Transit Administration to receive more funding, revealed that light rail increased pollution and increased traffic congestion. It did remove one car in 2,500, which was more than offset by the reduction in lane-miles available. Light rail tracks remove one lane of traffic in each direction. The 2,499 cars remaining had to squeeze into fewer lanes.

Reasons now given for new Light Rail construction:

  • It provides jobs. Only if you work for one of the construction companies that are liked by city hall.
  • It returns $7 for every $1 invested. This is partly true for developers that buy land before the rail is built. These numbers come from taking credit for any company that changes its location in order to build along the tracks. No company is going to start up just to be next to a rail line.

Prop-104 is also being promoted because it will increase funding for pot holes and buses. They must be some fancy buses and pot hole repairs because Prop-104 will more than double the city budget.

The original reason for public transit is to help those people who do not have private cars. LR does not help them, at most, removes them from a bus and places them in a light rail.

The budget explodes next year and only gets worse in future years. We need to start marshalling our limited resources now in order to protect city buses and other services vital to our city.

NO on Prop-104.

Prop 104 Is WRONG

By Wm. T. (Sparky) Smith ’64

WRONG DIRECTION – WRONG TAX – WRONG BOND PACKAGE

I am an appointed volunteer of the INNOVATION AND EFFICIENCY TASK FORCE. The I&E TF consists of volunteers and City employees. We spend hours and hours studying Phoenix departments, their operations and budgets looking for ways to cut expenses, to balance Phoenix’s budget, to keep taxes affordable.

Wrong Direction: WHY GO BACKWARDS?

More Light Rail will add MILLIONS to PHOENIX’S OPERATING BUDGET, undoing the $98 million in savings found by the I&E TF. This ever-increasing BUDGET HOLE leads TOWARD PHOENIX’S BANKRUPTCY!

This $30,000,000,000.00, yes “Billion” dollar Tax Package, the Mayor and the City Council, have BETRAYED the Taxpayers of Phoenix.

Wrong Tax: SALES TAX

By increasing by 70% the city sales tax portion that goes to support public transportation, city merchants will find competing more difficult; people will just buy in cheaper cities! The City recognized this: they exempted purchases of over $10,000 to keep from killing car sales in PHOENIX, “buying off” the wealthy car dealers at our expense!

Wrong Bond Package: LIGHT RAIL

Facing multi- million dollar budget deficits for the fore-seeable future because of UNION PENSIONS, why would PHOENIX triple the size of the “TAX DOLLAR BLACK HOLE”, light rail system?.” We have gone from Transit Busses that required a 35% tax subsidy to Light Rail that requires a 95% with no more riders. There is not one LR system in the country that is sustainable without massive local taxpayer subsidies; costing $MILLIONS & $MILLIONS, year after year!

“WHEN YOU FIND YOURSELF IN A HOLE, STOP DIGGING!”

Phoenix VOTERS, WE CAN STILL STOP THIS BETRAYAL!

VOTE NO! on PROP 104 !

A Very Concerned member of Phoenix’s INNOVATION and EFFICIENCY TASK FORCE

Prop 104: Phoenix Light Rail Continues to Operate At A Loss

By Tom Jenney

The Prop 104 tax increase would fund a gigantic $31 BILLION boondoggle – the largest tax-and-spend plan in Phoenix history. The proposal is light on real transportation, spending only a small fraction of revenues on street improvements. But the plan is heavy on light rail.

According to the Arizona chapter of Americans for Prosperity (www.afpaz.com), light rail transit is far and away the most expensive and inefficient transportation option available to Phoenix commuters. As Valley Metro admitted in projections submitted to the federal government, light rail removes only about one car in 1,000 from traffic, doing nothing to improve traffic congestion. In fact, by blocking traffic flow in Phoenix, light rail actually makes traffic congestion and commuter pollution worse.

Fewer than one percent of Phoenix commuters use light rail. Most light rail riders are people who would otherwise ride buses. In the decade before light rail, Phoenix bus ridership increased by an average of five percent per year. Since the opening of light rail, bus ridership has fallen by ten percent. We need a transportation plan to help the 99 percent, not the one percent!

According to Phoenix City Councilman Sal DiCiccio, who opposes the proposal, the plan would spend over $161 MILLION per mile of track. That money could be much better used almost anywhere else. In government, that money would be better spent on road repairs, bus transit, education or police and fire services. In the private sector, that money could be used to start businesses and create jobs. Also, according to the Arizona Free Enterprise Club, Phoenix light rail has operating losses exceeding $10 million a year.

Please vote NO on Prop 104 to protect taxpayers and to improve transportation in Phoenix!

Phoenix Councilman Sal DiCiccio: Vote NO on Prop 104!

By Phoenix Councilman Sal DiCiccio

If you support education, please vote NO on Proposition 104.

According to Phoenix staff, light rail will cost $161 Million per mile. The $31.5 Billion tax will take needed monies from education and other higher priorities.

The same politicians and insiders who brought you the failed Sheraton and pension fiasco are now bringing you this rushed train tax increase.

The Sheraton has lost over $130 Million in value and pensions are draining millions from our police and fire services every single year.

Mayor Stanton rushed the tax increase and exempted big business, forcing small business to pay the full tax. According to a City of Phoenix staff report, exempting big business from the tax increase will cost you $300 Million more in interest expense. Big business is now pouring millions into the campaign to pass this tax increase.

Education is the highest priority in our city. This tax increase will take money away from education. One mile of rail could pay the salaries of over 2,900 teachers.

Phoenix must first get its financial house in order and restore fiscal responsibility and accountability.

This election is about the future of our great city. Phoenix can either choose a path like other bankrupt cities, or, you can send a message to leadership to get its financial house in order.

  • $31.5 Billion in new taxes
  • $161 Million – cost per mile to build rail
  • $300 Million in more interest expense by exempting big business
  • 2900 NEW teachers for the cost of just one mile of rail

I strongly urge you to vote NO on Proposition 104.

Four Reasons to Vote NO on Prop 104

By Bill Haynes

The people of Phoenix should vote “No” on Proposition 104 for many reasons. Consider these four.

First, the price tag is beyond huge, imposing a $31 billion tax burden on Phoenicians. Such a tax burden could be a direct assault on property values as future city councils seek funds to pay debt by considering property taxes.

Definitely, Proposition 104 is an assault on the paychecks as it calls for still another increase in the city’s sales tax, which would put it near the highest rate in the US for major cities.

Second, while proponents of light rail gleefully point to business development after construction is completed, they never discuss the number of businesses that were destroyed during construction and the businesses that suffer reduced traffic because of now being less accessible.

Third, light rail proponents like to say that is reduces air pollution by taking autos off the streets. Fact is, less than one in a thousand (0.1%) is the auto reduction because of light rail in Phoenix. Further, advocates ignore that because of light rail it sometimes takes 3-1/2 minutes to make a left turn on Central Avenue, a development that adds to air pollution.

Finally, Prop 104, regardless of what proponents say, is not about “expanded transportation options for the people of Phoenix,” but is about massive contracts for companies in the light rail construction industry, which are the primary funders of the Pro-104 movement.

Phoenicians need to recognize that they are being taken for a ride with Prop 104. By voting it down, they will safeguard their pocketbooks and their property values.