Published on Friday, February 29, 2008
Republican State Sen. Bob Burns of Peoria asked tax opponents in Tucson and elsewhere last week to support a bill that would hurt their hometowns and do little good for them personally.
He wants to change a 1972 law that splits 15 percent of state income tax collections among cities and towns so he can give tax credits to non-city dwellers.
Cities get a share of state income taxes according to how many people they have. They also can increase their property tax collections by annexing areas that are developed or about to be, and by promoting infill within their current boundaries.
Annexing developed areas has been tough for the city in this century. Invitations have been turned down by residential and business property owners in the Catalina Foothills, on the far east side and elsewhere.
The reasons are many, and the Burns tax credit for staying out of cities would add one more.
Tucson officials apparently didn’t consider that when they decided recently to jeopardize an annexation deal to add nearly 500 acres of vacant state land on the southeast side and could lead to annexing 12,000 more acres in the future.
The first step would give Tucson control of development and population in a square-mile area bounded by East Valencia and Los Reales roads on the north and south and by South Alvernon Way and Swan Road on the west and east. The area also includes 150 acres of private land.
In future years, a mix of commercial, industrial and residential development would produce millions of dollars in property taxes and shared income taxes for the city.
But in yet another intergovernmental dispute where you and I might pay the costs for both sides, the city demanded the State Land Department spend $47,000 for a detailed study of plants along four washes that cut through the area.
State officials balked, not because it’s a big expense for this deal, but because it would set an expensive precedent for the 12,000 acres of vacant state land that Westcor is paying to have planned for a proposed "Second City" on the southeast side.
This spat could delay that, but it won’t stop Westcor or other firms from eventually moving ahead. People will continue to move here as long as winters elsewhere are cold.
State land officials agreed to let the city annex the property because they realized the Westcor plans would make it more valuable when the state sells it.
The project could help determine whether Tucson becomes a balanced, thriving city or a land-locked area of aging homes and businesses surrounded by more desirable suburbs.
If studying plants along washes had been required in the 19th century, Tucson might not have the University of Arizona, Davis-Monthan Air Force Base, cultural attractions and museums, attractive subdivisions, parks and the manufacturing and research firms it has today.
As for the Burns proposal, it would cut state revenues while legislators wrestle with the current year’s billion-dollar deficit and a bigger projected shortfall for 2008-2009.
Reducing the $700 million cities and towns now receive in state-shared income taxes will worsen their problems and force them to consider new taxes and fees or cuts in services.
The tax rebate to residents of unincorporated areas will also hurt cities and counties. Arizona will still have the same number of them, but less money to give them.
And while people who live out of town would pay a few dollars less in income taxes than city residents, they might not notice it because those taxes are already low.
But if things don’t change, we may long regret what the Burns bill and Tucson’s annexation demands could do to our future.
E-mail comments for publication to editor@azbiz.com. Steve Emerine, a Tucson resident since 1960, has run Steve Emerine Strategic Public Relations since 1994. He is a former local newspaper reporter, editor and columnist and served as Pima County Assessor from 1973 to 1980. He is a regular Monday guest on the John C. Scott radio talk show, which airs from 7 a.m. to 8 a.m. weekdays on The Voice KVOI 690-AM. This column appears weekly in Inside Tucson Business.
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