Cities to sue over parts of state budget

The organization that represents cities around the state voted Friday to sue to overturn some provisions in the state budget approved by lawmakers.

Chandler Mayor Boyd Dunn said the purpose of the special legislative session earlier this year was to balance the budget. And he said the Arizona Constitution requires lawmakers to stick to what is in that official "call."

But one measure contained a variety of what the League of Arizona Cities and Towns contends are nonbudget items. More to the point, they are issues the majority of mayors on the group's executive committee believe can harm cities and their taxpayers.

One involves a provision that freezes for two years the amount that cities can charge developers in what are known as "impact fees." These are imposed based on formulas by cities of what will be the additional cost of the commercial or residential project on everything from police and fire protection to the need for wider roads and new parks.

Backers of the change argued that there is a connection to the state's budget problems: Higher impact fees raise the cost of homes, making them less affordable, resulting in less construction and less revenue raised in direct and indirect taxes on the building and the people who would be employed.

A related provision in the bill the cities believe was illegally enacted precludes communities from forcing projects that already had been approved for construction from having to comply with subsequently enacted new or modified building codes.

Finally, Dunn said it was illegal for lawmakers to require all levels of government, including cities, to require proof of citizenship or legal presence in the country to get any government benefits.

Dunn said that last one is of particular concern to smaller communities. Aside from the burden of having to verify someone's legal status, the law also allows any citizen who believes a city is not complying to file suit, forcing the community to spend tax dollars to defend itself.

The lawsuit is similar to one filed last month by the Arizona Bankers Association against the state. That group says a change in mortgage laws enacted during the special budget session also was unconstitutional.

Dunn acknowledged the vote was not unanimous.

He said there was some sentiment that filing suit was a slap not only at the lawmakers but at Gov. Jan Brewer, who signed the provisions into law. He said many mayors, himself included, believe that Brewer has been a supporter of cities and has used her veto pen to kill even more onerous measures.

And Dunn said some mayors felt that the changes, while not welcome, were things they could "live with."

For example, he said that two-year moratorium on new impact fees is far better than a plan which had been pushed by the Home Builders Association of Central Arizona to temporarily block cities from collecting any fees at all.