SB1402 Provides Targeted Tax Break at the Expense of All Others

The Free Enterprise Club consistently opposes legislation that provides special tax breaks for targeted businesses.  This session’s “special unicorn” is SB1402, informally known as the Grand Canyon University bill (GCU).

SB1402 would create a property tax carve out for nationally accredited institutions of higher education to be reclassified as a class six property, taxed at 5 percent of full cash value.  Namely, this would benefit Grand Canyon University, the main proponents behind the bill, and a handful of other private educational entities.

Though understandably lawmakers wish to help Grand Canyon University grow and thrive, this is the wrong approach.  Individual tax carve outs unfairly redistribute tax liabilities on other tax payers, and discourage improvements to the system as a whole.  In fact, the state’s impact alone is estimated at $2.6 million which goes to back filling K-12 funding and does not take into account every district’s cost that has a higher education institution.   There is no way to provide targeted property tax relief to GCU, University of Phoenix and other institutions without shifting those costs to every other tax payer.

Inevitably every session a new business comes along which lawmakers claim is unlike any other.  They insist that this business is so unique and provides such monumental benefits that they should have particular exemptions not granted uniformly across the field.  But this is poor public policy.  Every business in the eyes of government should be treated equally and fairly.  That is where lawmakers should spend their time and energy if they truly wish to help GCU, improving the exorbitant and disparate burden of commercial property taxes on all businesses.