ATRA Press Releases

Friday, August 24, 2018

Repealing Bracket Indexing is a $1.25 Billion Income Tax Increase over 10 years on all Arizonans

The Joint Legislative Budget Committee (JLBC) released a memo analyzing the impact of the Prop 207/InvestInEd proposal which eliminates income tax bracket inflation adjustments. They conclude the proposal resets income tax brackets to 2014 levels and eliminates the estimated 2.26% annual bracket shift as a result of inflation. The purpose of adjusting brackets to inflation is to prevent a tax increase associated with wage inflation over time. Prop 207 permanently eliminates this feature.

The 10-year impact of this change is an estimated $1.252 billion tax increase which will be shouldered by all Arizona income taxpayers. The first year impact is roughly $50 million and by the tenth year in this study, it grows to $211 million, demonstrating the compounding impact of removing the inflationary adjustments. This tax increase will be deposited in the State General Fund which can be spent by the Legislature in any legal manner.

The Arizona Tax Research Association, using the assumptions developed by JLBC, calculates the 10-year impact of this tax increase to be $1,255 on a single filer with $50,000 in taxable income and $2,509 for a family with a combined income of $100,000.

"While proponents have attempted to deflect the issue by calling this tax increase insignificant, JLBC analysis shows it's anything but small. This permanent tax increase grows exponentially, annually increasing income tax exposure for all Arizonans." - Kevin McCarthy, President

For questions and media inquiries please contact Sean McCarthy at (602) 253-9121

Monday, August 6, 2018

In July, the Arizona Tax Court ruled against Pinal County in the Goldwater Institute’s challenge of Pinal’s transportation sales tax. As you know, ATRA was directly involved in this issue from the outset and informed Pinal County officials at their budget meeting on June 20, 2017 that ATRA had significant legal concerns regarding their proposal.

Subsequent to that meeting, ATRA Vice-President Jennifer Stielow publicly questioned the legality of the proposal in an op-ed published in the Arizona Capitol Times and Case Grande Dispatch. Despite still having adequate time to address ATRA’s concerns, the Pinal County Board of Supervisors regrettably chose to ignore ATRA and proceeded with the flawed Resolution that called for a half-cent sales tax on tangible personal property sold at retail. In addition, that resolution capped the tax at retail transactions under $10,000. I have attached the Tax Court decision, Jennifer Stielow’s op-ed, as well as the January 2018 ATRA Newsletter that provides a brief summary of the issue.

For those of you impacted by the tax, I am told by ADOR that they are going to encourage Pinal County to decide quickly regarding any decision to appeal. ADOR’s recommendation is to continue collecting the tax until there is a final decision regarding an appeal. More information on how refunds will be handled will also be available at that time.

If you have any questions on this issue, please call me at the ATRA office at 602-253-9121.

Friday, August 3, 2018

The State of Arizona recently responded to demands for higher teacher pay with a plan to increase base K-12 funding to provide a 20% teacher pay increase by the fall of 2020. ATRA analyzed Arizona teacher pay earlier this year, providing relevant facts and context to the policy issue. With this dramatic taxpayer investment, Arizona’s relative teacher pay ranking shifts considerably. This release also highlights conclusions from our K-12 funding studies.

Thursday, July 12, 2018

Dubbed the “Clean Energy for a Healthy Arizona Amendment,” this measure will require affected Arizona utilities provide at least 50% of their annual retail sales of electricity from renewable energy sources by 2030. The initiative will have a profound impact on the capital investment and production costs for Arizona utilities which will require significant rate increases on customers.

Saturday, June 30, 2018

The SCOTUS ruling overturning Quill/Bellas Hess in South Dakota v. Wayfair is good news for Arizona businesses and taxpayers. The court sided with South Dakota and invalidated the “physical presence” test for the collection of sales taxes on remote sellers. The Court made the case for why South Dakota’s simplified sales tax law does not burden out-of-state (remote) sellers, but also insisted that states with more complex or overreaching laws would be in violation of the commerce clause. Known for having one of the most complex and burdensome sales tax systems in the United States, Arizona will be forced to simplify its sales tax if it wishes to require out of state sellers collect sales taxes in Arizona.

Thursday, August 11, 2016

In a split vote, the Town of Gilbert elected to raise its secondary property tax for FY17 from a rate of $1.0567 to $1.0609. This results in a tax levy increase of approximately $1.5 million. Surprisingly, some councilmembers attempted to argue the tax rate and levy increase wasn’t a tax increase at all. For town leaders to suggest this is not a tax increase is simple obfuscation.

In actuality, the rate should have decreased substantially this year if they accounted for what property taxpayers have already paid. For cities and towns, the secondary property tax is used exclusively for the repayment of voter-approved bonds. The estimated debt service schedule in this year is $22.7 million. The town has previously over collected nearly $15 million for this purpose. This money is not a rainy day fund and cannot be used for any other purpose. The town voted to use just 12% of this overpayment account ($1.7 million) to pay for debt service in FY17. It is regrettable the town elected to increase taxes while it earns interest on past over-collections which sit in the bank. Taxpayers must pay the debt-service on bonds, but they first ought to be credited for what they have already paid. At a minimum, Gilbert owes a specific plan to its taxpayers to credit them back for what they have previously overpaid. There is no financial justification to stockpile a massive sum as taxpayers are constitutionally obliged to repay the debt service on voter-approved debt each year via the property tax, making it an incredibly reliable and secure debt-instrument.

Kevin McCarthy, President

Thursday, September 24, 2015

Many Maricopa County lawmakers have been asking for information regarding tax rate changes in their respective districts in order to respond to their constituents' questions resulting from the Maricopa County Treasurer Hos Hoskins' letter to homeowners blaming the State Legislature and the Arizona Tax Research Association for any tax increases in those bills.