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GOP plan would allow Arizona property owners to get a tax refund over 'public nuisance' complaints

By Wayne Schutsky
Published: Tuesday, January 23, 2024 - 9:33am

no camping
Katherine Davis-Young/KJZZ
Signs around the Human Services Campus in downtown Phoenix warn that camping is not permitted in the area.

Republican lawmakers want to give Arizonans the chance to recoup some of their property tax payments if cities refuse to enforce laws related to homelessness and panhandling. 

The proposal from Senate President Warren Petersen (R-Gilbert) and the conservative Goldwater Institute would allow property owners to request a refund if cities or counties fail to address public nuisances like illegal camping, panhandling and public urination.

Proponents argue that refund, capped at the total amount the individual paid in primary property taxes that year, would offset reductions in property value or expenses incurred by the property owner related to the public nuisance. 

Petersen said the money would be taken from a city or county’s portion of state shared revenue — or tax revenue distributed to cities by the state — so it would not impact other entities that benefit from residents’ property taxes, such as school districts. 

The proposal’s supporters said the goal is to motivate municipalities to act.

They cited a recent high-profile legal battle between city of Phoenix and property owners near “The Zone” homeless encampment that resulted in a court order requiring the city to clean up the area.

“The goal here is to get the cities to provide the services that they promised the taxpayers they would,” said Jenna Bentley with the Goldwater Institute.

Organizations representing Arizona’s cities and counties both opposed the bill, arguing it could actually hurt their ability to address those problems by redirecting resources to deal with administrative headaches and costly litigation.

Tom Savage with the League of Arizona Cities and Towns said property taxes make up about 20% of revenue for most Arizona cities. He said that money shouldn’t be put at risk, because cities are currently constrained by a Ninth Circuit Court of Appeals ruling barring them from criminalizing homelessness. 

Savage said those restrictions could change in the future after the U.S. Supreme Court agreed to consider a case that could overturn that Ninth Circuit precedent.

“In the meantime, while there may be frustration with the Ninth Circuit's ruling, withholding funding from cities that comply with the U.S. Constitution will neither solve homelessness nor make these encampments go away,” Savage said.

Warren Petersen on the Arizona Senate floor in 2023
Gage Skidmore/CC BY 2.0
Warren Petersen on the Arizona Senate floor in 2023.

But Bentley, with the Goldwater Institute, pointed out that Maricopa County Superior Court Judge Scott Blaney ordered the city of Phoenix to clean up “The Zone” in spite of the Ninth Circuit precedent and other conflicting federal rulings.

That Phoenix cleanup proves that cities and counties can act now to address what Petersen’s resolution calls “public nuisances,” Bentley said. 

The resolution passed the Arizona Senate’s Finance and Commerce Committee along party lines, with no Democrats in support.

Sen. Brian Fernandez (D-Yuma) said he agreed lawmakers needed to do more to address homelessness and the impact on local property owners but that this is not the right solution. He said he is worried about affected cities succumbing to a “death spiral” caused by a drain on property tax dollars.

“And then eventually they just have to kind of ease the policing altogether from everywhere, and then sort of like everyone drops to that baseline,” Fernandez said.

He also expressed concern that cities losing out on revenue could then raise taxes on all residents to make up for the shortfall.

But Sen. David Gowan (R-Sierra Vista) said those concerns miss the point.

“The purpose of it is we don't want them to lose their money; we want them to do the job that they were hired to do and make sure the streets are clean and have the proper lawfulness that we expect as citizens when we do pay taxes,” Gowan said.

If approved by the Arizona Senate and House of Representatives, Petersen’s Senate Concurrent Resolution 1006 would bypass the governor’s veto stamp and be placed on the ballot, giving Arizona voters final approval. 

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