Prop 117 – Property Taxes
Morrison Institute for Public Policy
Proposition 117, also known as the Property Tax Assessed Valuation Amendment, would amend the Arizona Constitution to limit the annual increase in the value of property used to calculate property taxes. Beginning in 2014, the ballot measure would cap this value to no more than 5 percent above the previous year, and establish a single limited property value for property tax purposes.
Currently, real property in Arizona is assessed at market value and a secondary limited value.2 The market value is mainly used to service debt or fund budget overrides, as well as special districts such as fire or flood control. The limited property value is calculated by a statutory formula. It funds general operations, including those for school districts and local governments. Under Prop 117, this limited value would become the basis for determining all property taxes on real property. In effect, the value used will either be market or 5 percent more than it was the previous year, whichever is less.
Prop 117 would make no change to the methodology used by county assessors to calculate limited value; and a homeowner could still appeal to the assessor if he or she believed the full cash value of a property exceeds market value.3 Under the state’s valuation calendar, the 5 percent cap would first apply to 2014 real property valuations, which are not subject to taxes until FY 2016.
The crux of the debate over Prop 117 is whether the measure will rein in property taxes on homeowners. Advocates say it will simplify the property tax system, provide stability and insulate taxpayers from dramatic increases in their tax bills. Opponents say Prop 117 does little if anything at all to prevent tax rate increases since taxing districts can still determine the amount of taxes levied.
Prop 118 – STATE LANDS SPENDING
by E.J. Perkins
Morrison Institute for Public Policy
Proposition 118, also known as the Permanent Funds Amendment, would amend the Arizona Constitution to allow the state to change the formula for distributing money from the state land trust “permanent fund” to public institutions, primarily schools. The new formula would be employed from fiscal years 2013 through 2021.
Experience since 2004 has demonstrated that the current formula can result in years with little or no payout due to economic fluctuations or downturns. Prop 118 would guarantee annual payouts, but likely at smaller average distributions over time.
State trust land refers to approximately 10.9 million acres of land granted to Arizona in 1910 by Congress prior to statehood. Although there are 13 beneficiaries of the permanent fund, K-12 schools are the largest in receiving about 90 percent of the overall payout. The fund is currently valued at $3.5 billion.2 Monies are distributed annually.
The permanent fund receives revenue from natural product leasing or sales, royalties from mineral materials, and land sales. In 1998 voters passed Proposition 102, which amended the Arizona Constitution to allow revenues to be invested in equities (or stocks). It also established the current distribution formula. Fund investments are managed by the State Treasurer.
The current distribution is determined by the average total rate of return on the previous five fiscal years. This figure is then adjusted for inflation by subtracting the average of the annual percentage change in the GDP price deflator (a measure of price levels for goods and services) for the previous five fiscal years. That inflation-adjusted rate of return is then multiplied by the average market value over the previous five years. The formula, first implemented in 2004, was designed to protect the permanent fund from the vagaries of the equities market where nearly 60 percent of the fund is now invested.
Prop. 120: State sovereignty
By SEAN PEICK
Cronkite News Service
When Rep. Chester Crandell, R-Heber, looks back at wildfires that have devastated Arizona’s forests in recent years, he sees a legacy of mismanagement by the federal government.
“We have not been able to get in and log properly and to clean our forests up,” he said. “And that’s led to catastrophic wildfires.”
That’s just one example, according to Crandell, of the federal government keeping Arizona from properly managing and benefiting from natural resources within its boundaries.
In response, he and other supporters of Proposition 120 say, Arizona should declare its sovereignty. “This just simply sets the groundwork and sets the message to the federal government that we are a sovereign state,” Crandell said. “And we will take care of things within our state boundaries.”
Proposition 120 would amend the Arizona Constitution to say that the state “declares its sovereign and exclusive authority and jurisdiction over the air, water, public lands, minerals, wildlife and other natural resources within its boundaries.”
The proposition wouldn’t cover Native American reservations, national parks and military installations.
Crandell said sovereignty would put Arizona in charge of its forests, including managing logging and thinning, to prevent catastrophes such as the 2011 Wallow Fire, the largest wildfire in Arizona history. Managing logging also would increase state revenues, he said.
“It would be managed to the point that we would utilize it and it would be sustained, but we would generate income off it,” Crandell said.
State Sen. Sylvia Allen, R-Snowflake, a co-sponsor of the legislation referred to the ballot, said Arizona could fight wildfires on its own as well as the federal government does.
“And there’d be many firefighters from around the country who’d be willing to come help,” she said.
But since federal authority trumps that of the states, would this be anything more than a political statement to Washington?
“It’s very clearly unconstitutional,” said Paul Bender, who teaches state and federal constitutional law at Arizona State University’s Sandra Day O’Connor College of Law.
“Most people have more sense than to think that you can be part of the United States and not part of the United States depending on whether you like what the federal government’s doing or not,” he said.
Sandy Bahr, director of the Sierra Club’s Grand Canyon Chapter, scoffed at the idea that a state unable to fund its own parks could take over managing federal land.
“The Legislature has a dismal record when it comes to public lands issues,” she said. “Frankly, they cannot be trusted with these federal public lands.”
Rep. Tom Chabin, D-Flagstaff, called the notion that local fire departments could effectively fight large wildfires “outlandish.”
“The truth is, even all of the state’s fire departments could not mobilize, secure air tankers and deliver a thousand firefighters in three days as the federal government has done with the Wallow Fire,” he said. “I mean, how in the world could we respond to that, and then secondly, how in the world could we afford it?”
Crandell acknowledged that the state doesn’t currently have the money to manage forests and other natural resources on federal land. But he said private businesses could help.
“As you open these up and we are able to have logging contracts, we’re able to have other projects to go in and harvest and use the product for a beneficial purpose, then I think you generate the money, that it takes care of itself,” he said.
Proposition 120 would repeal language in the Arizona Constitution giving up claim to any unallocated public land. That provision was required under the Arizona-New Mexico Enabling Act, which cleared the way for statehood and granted Arizona nearly 11 million acres of land in trust, primarily to benefit public education.
Crandell said that act is an example of western states being denied the same control over public land as other states.
“We’re at a huge disadvantage economically with the rest of the states east of the Colorado border,” he said.
While Arizona most likely would face a lawsuit from the federal government if it attempted to assert sovereignty, Crandell said Arizona’s rights are worth the fight.
“Does that mean, then, that we don’t push back, that we don’t look at why we’re not equal with other states that had their land given to them?” he said.
Prop. 121 - top-two primary
By SEAN PEICK
Cronkite News Service
As mayor of Phoenix, Paul Johnson found city officeholders and candidates more willing to seek common ground and less beholden to groups promoting narrow interests.
The reason, he said, was the city’s nonpartisan primaries.“It created substantially better results,” Johnson said.
Then came running for governor in partisan primaries. And seeing rising public discontent with divisive politics.
Those experiences, he said, are behind his support of a ballot proposition that would create open primaries for state offices. If approved in November, Proposition 121 would have the top vote-getters advance to the general election regardless of party.
Johnson joined with other business and civic leaders to form the Open Government Committee, which got the measure on the ballot and fought successful court battles to keep it there.
With relatively few voters currently taking part in primaries, especially independents, Johnson said open primaries would lead to a more inclusive government.
“It is a way to allow independents and independently minded Democrats and Republicans to have an equal voice with what has become an ideological extreme in both parties,” he said.
The group promoting that idea has raised a large amount of money along the way.
As of Aug. 24, the Open Government Committee had raised $965,000 and spent $954,000, according to its latest filing with the Arizona Secretary of State’s Office. That’s the most to date among groups supporting or opposing the various ballot measures.
Save Our Vote, a group headed by Maricopa County Attorney Bill Montgomery that is opposing Proposition 121, had raised $33,000.
Even so, Johnson sees both sides’ finances as fairly even because his group spent more than $800,000 on petitions to get on the ballot. The group’s lawyers wrote off most of the fees from court battles that twice reached the state Supreme Court.
“We’re now with the media portion of the campaign,” Johnson said. “They’ve got to go run a media campaign, we have to go run a media campaign. The good news for us is we’ve already identified people who like our initiative and that’ll give us money.”
Forty-six of the 255 total contributions, including loans, totaled at least $5,000 each.
While the 177 individuals who donated gave a combined $284,000, 15 organizations donated a collective $334,000.The largest donation was from Greater Phoenix Leadership, a coalition of Phoenix-area business leaders that has given $121,500 in six installments.
“We believe in representative democracy, we believe that every voice is important to be heard,” said Thomas Franz, the group’s president and CEO.
Professional Fire Fighters of Arizona, a union representing thousands of firefighters statewide, donated $100,000. Other contributing organizations included Cowley Companies Inc., the Southern Arizona Leadership Council and the Arizona Cardinals.
Sarah Smallhouse, president of the Thomas R. Brown Foundations of Tucson and a member of the Open Government Committee’s leadership, contributed $5,000. She said Arizona’s current primary system leads to elected officials who won’t work effectively with the business and nonprofit sectors.
“Together, with reinforcement, we can do a lot more than those three things working independently,” she said.
Having to spend so much money supporting open primaries is discouraging but necessary to Lea Marquez-Peterson, president and CEO at the Tucson Hispanic Chamber of Commerce, which has endorsed the effort.
David Berman, a senior research fellow at Arizona State University’s Morrison Institute for Public Policy, said organization and fund-raising ability don’t necessarily lead to a successful campaign. But Proposition 121 has a good chance to pass, he said, because of growing public dislike for partisanship and the success of similar systems in California, Washington and Louisiana. One thing opponents have in their favor, Berman said, is that the Open Government Committee is proposing something new and unfamiliar to many voters.
“When people are confronted with something like that, they’re likely to say ‘no’ because they don’t want to gamble.”