[Source: Mary Jo Pitzl, Arizona Republic, June 21, 2008] — Recent long-running legislative sessions have featured months of budget bickering between the GOP-led Legislature and the Democratic governor and at least one big last-minute deal. This year’s eleventh-hour proposal is the jobs-stimulus package, a plan to boost the state’s economy through tax breaks for developers, help for spring-training baseball in Tucson, and tax credits for solar manufacturing, research and development.
The idea — to energize the state’s sagging economy by generating jobs, primarily in construction — surfaced this week after Rep. Michele Reagan, R-Scottsdale, convened lawmakers and lobbyists… Here’s a rundown on the four components:
Urban Development. The impetus for this is a downtown Phoenix entertainment district proposed by developers Dale Jensen and Brad Yonover. They need the Legislature to waive four construction-related sales taxes — two collected by the state, two by the city — to give them a break on construction costs. Yanover told lawmakers the plan includes a 380-room Fairmont hotel (a boutique hotel from the Marriott Hotels line), a 2,500-seat House of Blues, high-end restaurants, and other amenities. But Reagan interrupted his presentation to make it clear that the package would not apply just to downtown Phoenix but also to other districts that meet certain criteria. The construction-related taxes would be returned to the developers for 10 years.
House Speaker Jim Weiers, R-Phoenix, made a special appearance this week to urge lawmakers to take a risk to launch the project. “This doesn’t cost the taxpayers one cent,” Weiers said. “It does have the potential for creating tens of thousands of jobs.” The argument for such tax-abatement projects is that none would be built without the tax waiver. And with the waiver, a project could proceed and generate new taxes for the city and state.
The proposal, pitched by lobbyists Mike Williams and Kevin DeMenna, caught at least one Phoenix official by surprise. “My personal feeling is, if they want to include the city in this, maybe we could have a conversation if we can afford to do this,” said Phoenix City Councilman Claude Mattox. Others see the still-emerging plan as special-interest legislation. “The urban-development project just smacks of handouts to developers,” said Michael Crowe, chairman of the leadership council of the local branch of the National Federation of Independent Business. “It just looks like a money grab…” [Note: To read the full article, click here. Related Phoenix Business Journal article here.]