An association of large business taxpayers wants to amend the state constitution to require future local government bond proposals and budget overrides to be approved by two-thirds of voters instead of a simple majority.
The Arizona Tax Research Association said the amendment might be the only way to resolve a perceived unfairness that business property tax assessment ratios are 2 1/2 times higher than ratios for residential property tax.
The association and other business groups have been trying for years to reduce the commercial ratio. But such efforts have been a political failure because homeowners would have to pay more in taxes to make up for lost revenue to cities, school districts and community colleges.
Kevin McCarthy, president of the association, said the new proposal might help avoid the annual legislative fight between business groups and lawmakers who don’t want to anger homeowners. Raising the vote threshold likely would force local governments to spend less and to reduce taxes for everyone, McCarthy said.
"When they pass a lot of these bonds, they’re very cognizant of how much they are going to ask for (in property taxes)," McCarthy said. "The dollar requests probably would come down in order to get 66 percent or better of the voting public to go for the idea."
A handful of other states, including California and Oregon , already require a "supermajority" of voters to approve local tax increases and government borrowing. The exact percentage needed for passage varies from 60 percent to 75 percent. But a 66 percent threshold for passage in Arizona would mirror the constitutional requirement for the number of votes needed in the Legislature to raise state taxes.
Some East Valley cities and school districts say the new proposed amendment would make proper funding for schools and vital government services nearly impossible.
"It would just be a nightmare," said Joel Wirth, assistant superintendent for business services in the Chandler Unified School District . "I think it’s time for me to retire if they ever get something like that through. It’s that crazy."
However, when East Valley voters pass local government spending measures, they tend to give approval by a huge margin. On Nov. 2, a $950 million bond package for the Maricopa Community College District passed with 76 percent of the vote. School bond proposals in Chandler and Scottsdale also passed with more than 66 percent.
In all, 60 percent of bond issues and budget overrides approved by East Valley voters in the past four years were above the proposed 66 percent threshold, according to a Tribune review of 64 individual ballot questions. Bond proposals were more likely to pass than budget overrides, which allow local governments to exceed spending limits originally set in 1980.
Larger governments and larger spending proposals likely would have the most difficulty in getting additional voter support. In May, Scottsdale ’s $500 million city bond package passed with 58 percent of the vote.
In March, Mesa voters approved eight city bond measures for $331 million. Four of the bond questions were challenged by critics, and those four passed with approval ranging from 51 percent to 61 percent. The other four passed with more than 70 percent.
Bob Flach, chief financial officer for the Scottsdale Unified School District , said making it harder for districts to win passage could result in a new conflict with court rulings that require adequate and uniform school funding. The last conflict in the 1990s forced the state to spend $1.2 billion on repairing aging school buildings and to finance $250 million a year in new school construction.
"It doesn’t make any sense," Flach said. "We’ve just been down that road. Let’s not do it again."