For the better part of the past decade, the Arizona state budget has been on a historic roller coaster. Significant budget increases between 2003 and 2008 were followed by a recession that stripped 35 percent of the revenue from the state general fund.


The good news is that the fiscal 2012 state budget is the first structurally balanced budget in four years. The bad news is that it contains roughly $950 million in temporary sales-tax revenue that will be gone after fiscal 2013.

All taxes and fees are a problem in New York state.

In Arizona, the problem is not with property taxes — or taxes paid to multiple governments since there is one school district and one municipal entity. The Grand Canyon state, however, does have high sales taxes, which rates it second in the nation. In the top spot is Tuba City, Ariz., with a rate of 13.725 percent. That is nearly twice the amount for Chautauqua County, which is 7.75 percent.

News that property values are rising throughout the East Valley — in some areas dramatically so — should bring smiles to many homeowners' faces. It's one of the few investments that have been going up instead of down in recent years.


But the news also will bring smiles to many local government officials — and not for reasons that will please owners of homes and businesses. Rising property values make it easier to slip property-tax increases past taxpayers.

It happens all the time, and homeowners often are unaware until their get their annual property-tax bill.

State lawmakers are taking the first tentative steps toward reducing the property tax burden on business.


Virtually all lawmakers agree the property tax structure is unfair. But the concept faces an uncertain future because of one simple fact: It would shift the cost of future bond issues and overrides from businesses to homeowners and apartment dwellers.

And lawmakers realize that this is an election year, and businesses do not vote.

The best political brawl in Arizona has broken out in an unlikely place: the Republican primary for secretary of state.


The chief antagonist is former Phoenix Councilman Sal DiCiccio. DiCiccio, 44, is a modern-era political entrepreneur. He has spent most of his adult life either holding or running for office, or helping others do so.

As a city councilman, DiCiccio was a useful gadfly, particularly on fiscal issues such as the financial viability of the city-built downtown garage, cost overruns on the new City Hall, and the lumbering Phoenix light-rail plan.

Calling business property taxes a major threat to the state’s economic stability, three organizations are asking the Legislature for a change in the tax system.


“The single greatest imbalance in Arizona’s tax system is the extreme burden placed on business property,” said a paper presented by the Arizona Chamber of Commerce State Budget Committee to the Legislature’s Tax Reform for Arizona Citizens Committee meeting on Sept. 23.

Arizona property owners paid $334 million more in property taxes this year compared with last year, shattering the one-year growth record set in 2000, a recent analysis showsMuch of the increase came from new construction. Maricopa County alone experienced $1.4 billion in new taxable property last year. But a substantial amount of growth came from the average 7 to 8 percent increase in the value of existing homes.

An Arizona mining company is trying to kill the main constitutional protection for homeowners against high property taxes.


Asarco is asking Maricopa County Superior Court Judge Michael Yarnell to void a voter-approved provision of the state Constitution, which limits primary property taxes to no more than 1 percent of a home’s full cash value. That translates to a primary tax rate for homeowners of no more than $10 per $100 of assessed value.

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 two most powerful lawmakers on issues of tax policy want to tap the state’s anticipated revenue surplus — eventually up to $200 million a year — to reduce what businesses pay in property taxes.


Sen. Dean Martin, R-Phoenix, and Rep. Steve Huffman, R-Tucson, are crafting legislation for the upcoming session to reduce the tax burden on businesses.