Arizonans May Vote To Pre-empt Real Estate Transfer Taxes
Tucson, Arizona — Arizona does not currently levy a real estate transfer tax. If Proposition 100, the Protect Our Homes Act, passes in November, such taxes may be permanently banned.
Proposition 100 is a constitutional amendment proposed by No New Homes Tax, an ad-hoc group run by Bettina Nava and Frank Dickens; its major support is coming from the Protect Our Homes Coalition, a group funded by the Arizona Association of Realtors. A preliminary sample showed that the measure may plunge slightly short of the required number of signatures, however, following established legal precedent, the Secretary of State’s Office approved the measure for the 4 November ballot.
Proposition 100 would forbid the State of Arizona or any district or political subdivision thereof from imposing any “new tax, fee, stamp requirement, or other assessment” that did not exist as of 31 December 2007 on the purchase, receipt, transfer, or any other conveyance of interest in real estate. 36 US States and the District of Columbia currently charge such taxes. Arizona does not, but such a tax has been recommended in county and municipal whitepapers and proposed in 2007’s HB 2762, which was held in committee. Fearing that, with budget shortfalls becoming more common, the State of Arizona or its counties and municipalities would seek unusual sources of revenue, and taking HB 2762 as an early warning, the amendment’s supporters seek to pre-empt the establishment of such a tax.
Preemptive ballot measures are a novelty in Arizona; in past years, initiatives have generally been either positive proposals for current laws like smoking or racial-preference bans, reactions to governmental abuses like 2006’s Prop. 207 Homeowner Protection Act, or populist turnout-boosters like 2006’s attempt to ban gay marriage. This year there were two major pre-emptive efforts: Proposition 100 and the Freedom of Choice in Healthcare Act. Although the latter effort’s ballot status is in question, the result of the Secretary of State’s office finding unusually large numbers of invalid signatures for all initiatives this year, such initiatives show that Arizona’s limited-government, Goldwaterite trail remains strong despite an influx of fresh residents from California and relatively big-government states back east.
No organized opposition to Prop. 100 has yet emerged, and unlike the Payday Loan Reform Act, we have yet to hear from any newspaper editors or state Senators in strong opposition to the measure. We can, however, expect municipal and county bureaucrats and at least considerable portions of the several counties’ Boards of Supervisors to come out against anything that would cut off a potential revenue source. It’s doubtful that Arizonans will follow their lead; as home valuations increased during the real estate boom, a strong backlash against rising property taxes emerged, and Prop. 100’s backers are selling the measure as preventing a sort of “double taxation” of property.
We need taxation, of course, to fund government; volumes upon volumes of scholarly books and articles have been and continue to be written on the question of what the best system of taxation is. Nevertheless, some things are known almost surely. For one, principles of fairness necessitate that, beyond what’s necessary to provide basic protection of law to all, people ought to pay for what “extra” they use and not be made to pay more if they do not use extra. The question “Why should I have to pay an extra tax if I didn’t cost the State anything? ” leads many to a “gut” opposition to modern taxes. Beyond processing of documents, which can be covered by a shrimp fee, real estate transfers cost the State nothing, and certainly don’t impose a cost proportional to the value of the transfer. Mature out from years of property tax increases and jaded from hearing state and local politicians ask for more revenue instead of trimming their budgets, we can demand opposition to even the idea of levying a proportional tax on a seemingly random choice of commercial transaction to be fairly widespread. Hence we can expect broad support for Prop. 100 at the polls this fall.
Sources:
Protect Our Homes Act, full text, office of the Arizona Secretary of State.
Amanda Crawford, “Real Estate Initiatives OK’d For Ballot“, Arizona Republic, 9 Aug 2008.
HB 2762, 1st Regular Session, 48th Legislature of the State of Arizona.
Bennett Kalafut, “Arizonans to Vote on Freedom of Choice in Health Care Act“, Associated Content, 23 June 2008.
Mary Jo Pitzl, “Backers face trouble with ballot initiatives“, Arizona Republic, 3 Aug 2008.
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