December 31, 2004
Figuring that more is not necessarily better, the state’s largest business group has decided to concentrate its agenda for the upcoming legislative session on four key issues.
As it does every year, the Arizona Chamber of Commerce is putting out a booklet with a laundry list of things it would like lawmakers to enact — and things they intend to fight against if others raise the issue.
But Farrell Quinlan, the group’s communications chief, said that wish list is not a realistic goal of what the chamber expects the Legislature to do. "We tried to boil it down to what we found important," he said. Those top four issues are reducing business property taxes, tort reform, accountability for public education and "budget transparency," he said.
Quinlan said the chamber is uniting behind efforts by Rep. Steve Huffman, R-Tucson, and Sen. Dean Martin, R-Phoenix, to reduce the disparity between the effective tax rate paid by business and that paid by owners of residential property. That system essentially levies a tax on business equal to 250 percent of what homeowners pay.
The idea is not new — or even unique to the chamber: Reducing business property taxes was one of the main recommendations a year ago from the Governor’s Finance Review Commission. Gov. Janet Napolitano has yet to include that proposal in a budget plan to lawmakers.
Quinlan acknowledged that making property tax reduction the top tax priority means putting other forms of business tax relief on the back burner. That includes reducing the overall corporate income tax rate and changing the way multistate companies compute their Arizona taxable income.
"I think if there is one area of the tax system that all business sectors can agree on is that our property tax system is unfair to business property," Quinlan said. Other proposals, he said, help only certain segments of the business community.
That doesn’t mean the chamber no longer wants those other changes. But Quinlan said the organization is being realistic.
"You never get everything," he said. The chamber also is going to get involved in "tort reform" efforts to reduce the size of jury verdicts.
So far, the Arizona Medical Association has taken the lead, hoping to alter or repeal a state constitutional provision that now bars lawmakers from enacting limits on malpractice awards. But Quinlan said the business community also believes it should get some relief.
At this point, Quinlan said, the details still are being worked out. But he conceded that asking voters to approve outright across-the-board repeal — a move that would let lawmakers cap all damage awards — might not politically be the way to go.
"We recognize the abysmal record at the ballot," Quinlan said, with voters having rejected altering the constitution five times going back to 1986. "We understand that going to the ballot with the same strategy is a loser."
But Quinlan said the chamber is exploring some other alternative, perhaps constitutional language that would allow consumers, through a contract, to voluntarily give up their right to sue for certain damages. That is a philosophy being espoused by Paul H. Rubin, a professor of law and economics at Emory University.
The chamber also wants more "accountability" for public education.
Quinlan said there already is much information available about classroom performance, including how students do on the AIMS test. The problem, he said, is there is no central way of pulling that data together in a usable form.
The reason that is important, Quinlan said, is lawmakers are asked perennially to add more dollars for schools or alter formulas used to determine which programs are funded. That includes not only basic state aid but even other programs such as teacher compensation.
But without that information, he said, lawmakers cannot make informed decisions.
Finally, there is what Quinlan is calling "budget transparency." The $7.3 billion state budget actually is less than half of the money that passes through the hands of state agencies, with the balance being federal dollars.
Lawmakers have tried for years to get authority over how these funds are spent, only to have these bills vetoed by governors of both parties. Quinlan acknowledged a similar effort this year would meet a similar fate.
But he said legislators — and the public — need a better idea of where all of those dollars are going, not just by state agency but by individual programs. That would enable legislators to determine if additional state tax dollars are necessary.