Homebuilders made bad deal on tax measure

It is understandable that home developers in Arizona want to avoid having to pay extra fees, but what is not understandable is their willingness to help push through a tax measure for other Arizonans.

An effort is currently under way in our state to fund a massive 30-year program of transportation improvements that would include new roads and new mass transit programs. An initiative petition will soon begin circulating seeking to place a 1 cent state sales tax increase on the November ballot to pay for the projects.

If voters were to approve the measure, it would bring the state sales tax to 6.6 cents from 5.6 cents beginning 2010. Added on top of that amount, of course, would be additional allocations from counties and cities. In the city of Yuma's case, the total sales taxes would be about 10 percent of most purchases.

It was revealed over the weekend in a story from Capitol Media Services that the actual initiative proposal was a little different than when it was first considered. It originally included a provision for some fees on new homes to cover the transportation costs, in addition to a sales tax hike. These are sometimes called developer fees.

However, a deal was cut between Gov. Janet Napolitano and the Homebuilders Association of Central Arizona, as revealed in a letter of agreement obtained by Capitol Media Services.

Under the deal, the home fees were removed from the initiative proposal in return for a promise from the homebuilders group to provide at least a $100,000 donation - and more in the future - to help pay for a campaign to gather signatures and to convince voters to approve the higher tax rate.

In addition, the homebuilders group promised in the letter to the governor not to oppose a separate initiative measure sponsored by environmental groups that would put 570,000 acres of state trust land off limits to development - even though developers actively opposed a similar measure last year.

We have no disagreement with the homebuilders trying to avoid taxation (or what are euphemistically called "fees"). They are overtaxed just like the rest of Arizona's taxpayers. Everyone needs relief from the voracious appetite of government entities for more money. And in the end, their avoidance of fees benefits consumers, since the cost of taxes and fees are often just passed on to them.

No, the fee avoidance is not a problem.

But it is a big problem when the homebuilders group then turns around and agrees to actively try to get general taxpayers to pick up the bill. More taxation is bad for everybody, not just homebuilders.

We are glad the governor insisted on this being put in writing. It enables all of us to see the shenanigans involved with this transportation measure.