Citizen groups, education association differ on Prop 100

The Yuma Sun
The original article can be found here

A state agency's opinion is at odds with a series of citizen action groups as to whether Proposition 100 would be a benefit or a boon.

The proposition, one of eight to be voted upon in the Nov. 4 general election, would constitutionally prohibit new taxes and fees on the sale or transfer of real estate.

It does not, however, affect any taxes, fees or other related laws already in existence. Essentially a guaranteed maintenance of the current laws barring another vote, Proposition 100, as reviewed under law by the Joint Legislative Budget Committee, "is not estimated to have a direct or local fiscal impact," per the ballot's official performance review.

"(The transfer tax) does nothing but add another level of taxation on home loans, making it more difficult and driving the cost up of owning a home," said Sandy Griffin, president of Prudential Griffin Realty, 2855 S. 4th Ave. "There is no downside from a consumer standpoint.

"What has happened in other states is, they start with a transfer tax, and California has one, and it may start out at a modest amount, but that does not mean it can't be raised along the line. In a lot of cases it has been. When monies are tight I can understand why (the Legislature is) looking at new sources of revenue, but this affects people's ability to own a home."

That's a positive, according to Protect Our Homes and Americans for Prosperity, among other citizen action groups. The Arizona Department of Education argued in an official statement that the state faces "fast-paced growth and a drastic need to expand infrastructure for millions of new residents. ... Arizona is too reliant on taxes that do not produce consistent revenue in tough economic times."

The proposition, available online on the Arizona Secretary of State's Web site, will "amend the Arizona Constitution to prohibit the state or any county, city, town or other political subdivision of the state from directly or indirectly imposing any new tax, fee or other assessment on the sale, purchase, transfer or other conveyance of any interest in real property (such as homes and other real estate)." The final date for any changes to the current laws would be Dec. 31, 2008 if the proposition passes.

Several groups and individuals are on record as supporting the measure, including the Arizona Chamber of Commerce and Industry, the Arizona Contractors Association, the Cattlemen's Association and former Gov. Rose Mofford.

Protect Our Homes, the group for whom the measure is named, released a statement that a "real estate sales or transfer tax is both unfair to Arizonans and bad fiscal policy. Since home and property owners already pay annual property taxes, an additional tax, levied at the time people buy, sell or even transfer ownership of their home into a legal trust or to a family member, would be double taxation.

"Proposition 100 will protect the equity that people have worked so hard to build in their homes and property, equity that would be negatively impacted by the increased costs associated with a real estate sales or transfer tax."

The Arizona chapter of Americans for Prosperity (www.aztaxpayers.org), another action organization on economic matters, noted that "governments in other states have used a real estate sales or transfer tax as a new source of revenue to balance bloated budgets. Once this type of tax is put in place, no matter how low the rate is in the beginning, it always ends up being raised. The results are substantial increases in fees for real estate closing.

"In Arizona, we already pay multiple taxes and fees on our homes, making a real estate sales or transfer tax a form of double (or triple) taxation. ... Further, a real estate sales or transfer tax would add yet another layer to the costs of closing. That would decrease equity and damage ability to sell (a) home."

Arizona does not currently tax any property transfers or sales for homes - though it does have a state property tax - so, as president of the Arizona Farm Bureau Kevin Rogers said, the proposition "simply removes the temptation of government to enact it."

The Arizona Education Association (AEA) maintains that the "current downturn in the economy has caused the state a $2.2 billion deficit, and Arizona does not have a viable solution. Prop 100 will change the constitution of Arizona to protect real estate corporations and developers. Changing our constitution to protect wealthy special interests will cripple our state's ability to support the needs of a growing state."

AEA president John Wright and vice president Andrew Morrill released a statement reading that a vote against the proposition would be a step toward a stronger economy and services including "great public schools and universities, quality transportation and health care ... funded by a sound and equitable system of taxation."

Supporting the measure, they write, means Arizonans "fall farther behind our goals, dragged down by deteriorating services and poor amenities."

Text of the bill, and the entirety of some statements above, can be viewed online at www.azsos.gov/election/2008/Info/PubPamphlet/english/Prop100.htm. All general election propositions can be viewed online by substituting "contents" for "Prop100" in the address above and clicking on the desired measure. One can also toggle through the bills by using the arrow key links at the top of the site pages.

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Matt Keller can be reached at mkeller@yumasun.com or 539-6857.