Councilman Tom Simplot's
North Central News Column
Finally. The Arizona Legislature has finally put a stop to the bizarre and self-destructive practice of cities providing huge incentives to attract business development in their communities.
The process had bordered on insanity with businesses ranging from car dealerships to sporting goods stores to mall developers pitting one city against another to see which was willing to fork over the biggest piece of the pie.
Our Valley cities were only too willing to vie away even bigger pieces of that pie.
In just the last decade, Valley cities provided a staggering $621.1 million in incentives to various retail business interests. Nearly two-thirds of a billion dollars in tax and other revenues we’ll never see. And the money wasn’t used for crucial infrastructure or schools or police and fire protection, but for car dealerships and malls. Just as bad, it put home-grown businesses at a tremendous competitive disadvantage.
It became clear Valley cities were unable to restrain themselves, so the Arizona Legislature had to step in. House Bill 2515, which requires a dollar-for-dollar deduction in a city’s state shared revenues when they offer retailers big incentives, should help stop the nonsense. It isn’t perfect – Peoria and most rural communities are inexplicably exempt – but it’s a big step in the right direction.
Phoenix State Senator Ken Cheuvront deserves significant credit for pushing this important bill through both houses of the legislature. Cheuvront’s willingness to stand firm against withering opposition from various developers, business interests and more than a few city officials from around the Valley will benefit taxpayers for decades to come.
Economic development and growth are important to Phoenix and the Valley. We need to keep working with those who want to locate here, especially those providing high-paying jobs in our growing bioscience and medical research industries. But giving away taxpayer money in a city vs. city orgy of spending became ridiculous. There is plenty of development for all of us and no indication our growth will slow dramatically or that new business will suddenly want to go elsewhere. This is one of the fastest-growing metropolitan areas in one of the fast-growing counties in one of the fastest-growing states in the country. Businesses that want to improve their bottom line and make their shareholders happy will come here without incentives. We have plenty to offer without sacrificing our much needed revenues.
We can do a lot better and HB 2515 is a very good start. We can thank Sen. Cheuvront for his persistence in getting the bill through and Governor Janet Napolitano for having the common sense to sign it into law.
Councilman Tom Simplot represents District 4, which includes parts of north central Phoenix. If you have questions, comments or suggestions on this or any other issue, contact his office at council.district.4@phoenix.gov or call 602-262-7447.
