Monthly Archives: April 2011

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Let’s say you run a business in Arizona making stuff.  You’ve owned it for five years.  You’ve invested millions – say $6 million – and created dozens of jobs – say 65.  The last few years have been tough, however, so although you may have wanted to expand, you’ve actually had to lay people off.  But things are turning around, so you’re hiring again now, slowly but surely.  This is not an atypical story these days.

A bill making its way in the legislature –  thanks to Republicans, no less – would subsidize business owners who invest $5 million and create 25 jobs. . . . starting now.   You (in the example above)?  You’re out of luck.  Why?  You had the misfortune of creating those jobs before this bill passes.

But let’s say for a moment that you run a business and you invest $4.9 million to expand.  Let’s even say you create 1,000 jobs with that expansion.  Sorry, you don’t qualify for the subsidy (investment must be $5 million).  Or let’s say you invested $15 million to grow your footprint and expand your market share, but you only create 24 jobs.  You’re sunk.  You don’t get the subsidy (must be 25 jobs).

Let’s say you’re on the Maricopa side of the Maricopa/Pinal border.  And let’s also say that you invest $4 million and create 30 jobs (no subsidy), but your competition moves in across the street on the Pinal side.  He only has to invest $1 million and create 5 jobs and he gets the state subsidy (only because he’s not in an urban area).

What’s the subsidy, you ask?  It’s a 75 percent break on property taxes.  So, if you’ve been in Arizona, slogging it out in this economy, and you’ve invested millions, created dozens or hundreds of jobs, and you are in the typical commercial property class that levies a 20% assessment, you get nothing.  But some new guy can move in right across the street from you, invest his first $5 million (or $1 million in some areas), create 25 jobs (or 5 in some areas) and walk away with a 75 percent better tax rate.

Doesn’t seem right, does it?



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