AZ Chamber of Commerce supported initial education tax, but not in favor this time - East Valley Tribune: Business

AZ Chamber of Commerce supported initial education tax, but not in favor this time

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Posted: Friday, July 13, 2012 5:24 pm | Updated: 4:07 pm, Sun Jul 15, 2012.

A key element of the business community is gearing up to fight a permanent extension of the state’s one-cent sales tax surcharge.

Glenn Hamer, president of the Arizona Chamber of Commerce and Industry, said his organization is a big supporter of education and does believe more resources are needed. He said that is why they supported the temporary levy in 2010.

That tax, along with the nearly $1 billion a year it raises, self-destructs at the end of this coming May.

But Hamer said it’s one thing to support a temporary fix for a temporary budget problem, as the alternative would have been even sharper cuts to education than lawmakers approved to balance the books. This new measure, he said, is a permanent levy — with dollars earmarked to specific programs — one that could be altered only by sending the issue back to voters.

“To us, it feels like it’s basically ballot-box budgeting,’’ he said.

Hamer said he was not disputing a recent report by the U.S. Census Bureau which shows Arizona near the bottom of all states when it comes to spending money on public education. That study found per pupil spending in Arizona at $7,848. That compares with $10,615 nationwide, putting the state ahead of only Idaho and Utah.

He said, though, these numbers tell only part of the story.

“The more important metrics to focus on from our view is what are we getting from these dollars,’’ he said. “Are we getting an improvement in test scores?’’

Hamer said funding is “a part of that.’’

“But to permanently cut a check of about a billion dollars a year without meaningful accountability safeguards is not the best way to proceed, in our view,’’ Hamer said.

But Ann-Eve Pedersen, who chairs the initiative effort, said that’s not true.

“A piece of it includes performance measures such as test scores, third-grade reading proficiencies, graduation rates, drop-out rates,’’ Pedersen said, as well as how Arizona compares with other states on things like the National Assessment of Educational Progress. “And there’ll also be a piece of that, that gauges student engagement and parental satisfaction.’’

She acknowledged, though, that the bulk of the funds are distributed regardless of performance.

Hamer said the chamber supported the efforts by Gov. Jan Brewer to put more money into education for the current budget. He specifically mentioned the $40 million the governor sought to fund a new requirement for students to be able to read at the third-grade level before being promoted to the fourth grade.

While lawmakers funded that, they balked at Brewer’s request for $200 million for “soft capital,’’ which includes books, computers and supplies. Instead, the Legislature provided just $15 million in general capital funds to be divided among all the school districts in the state.

“Yes, we would have liked to have seen more funding in the budget when it came to education,’’ Hamer said.

“But we also understand that the state’s been in a difficult budget situation for a number of years,’’ he continued. “The Legislature at least made an important down payment on one important aspect.’’

Hamer said his board of directors was turned off by the fact that the initiative is about more than just education. He pointed out that, if approved, there also would be funds for everything from health care to new road construction projects.

“It reads more like a federal omnibus earmarks appropriations bill,’’ he said.

The chamber is supporting several other measures on the ballot.

One in particular would give the state more power to trade away trust lands rather than selling them off outright. The idea would be for the state to use that power to help the federal government acquire land around military reservations — air bases in particular — to create a buffer zone against residential encroachment.

“We need to make sure we’re doing everything to make the state attractive to the defense industry,’’ Hamer said. He said Arizona is very dependent on both the money that comes directly from the federal government to operate the bases as well as the industries and businesses that provide support services.

The chamber also is backing a proposal that would provide businesses a big break in property taxes.

That proposal would expand a partial exemption from constitutional requirements that businesses pay property taxes annually not only on the value of their land and buildings but also on the worth of every piece of equipment they own and use.

Voters have previously approved a $50,000 exemption. That, with inflation, has now risen to more than $68,000.

Companies whose property is worth less than that do not have to bother computing what their equipment is now worth, much less write out a check every year. Backers of that measure said it not only helped small businesses but also removed a lot of unnecessary work for county assessors, given the minimal amount of taxes these small firms generate.

This measure would boost that exemption sharply, using a formula tied to median earnings in the state.

At current levels, that computes out to a proposed $2.4 million exemption per year, said Farrell Quinlan, state director of the National Federation of Independent Business.

The chamber also is backing a measure to limit the year-over-year growth in a property’s assessed valuation for taxes as well as another which would smooth out the amount of trust land revenues paid out to education from year to year.

Hamer said the chamber is not taking a position on several other controversial measures, including one setting up an open primary system where all candidates would run against each other in the first election and the top two vote-getters would face off in the general election, regardless of party affiliation.

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