Arizona Proposition 100 (2008)

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Arizona Proposition 100, known by its supporters as the Protect Our Homes Act, appeared on the November 4, 2008 ballot as a citizen-initiated constitutional amendment. It amends Article IX of the Arizona Constitution.

The sponsor's statement describes the measure this way: "this Initiative prohibits the government from charging any new tax on the sale or transfer of real property in Arizona. Currently, there are no real property sales or transfer taxes in Arizona. However, the government could enact a real property sale or transfer tax at any time. This Initiative would prohibit the enactment of any new real property sales or transfer tax by a constitutional amendment."

2008 election results

Arizona Protect Our Homes Amendment
Yes or no Votes Percentage
Yes 1,483,240 76.7%
No 451,817 23.3%
Total votes 1,935,057 100% precincts

Results according to the Arizona Secretary of State.[1] Results are unofficial pending an official canvass on December 1, 2008.

Background

Real estate transfer taxes are imposed on the sale or transfer of real property[2]. According to a 2006 study from the Federation of Tax Administrators, thirty-five states plus D.C. impose a real estate transfer. Tax rates range from a low of 0.01 percent in Colorado to a high of 2.2 percent in D.C. In about 2/3 of the states imposing the tax, the rate is below 0.5 percent of the value of the transfer. Nationwide this raised approximately $7 billion for state and local governments in fiscal year 2004. [3]

Supporters

The listed sponsors of the initiative are Bettina Nava and Frank Dickens. Supporters filed approximately 372,000 signatures on June 24, 2008.

The ballot measure was backed by the Arizona Association of REALTORS, Arizona Cattlemen's Association, Arizona Farm Bureau, NAIOP-AZ Chapter, the Arizona Contractors Association, and the Arizona Chamber of Commerce.[4]

Supporting Arguments

  • Governments already collect taxes on your property based on the property's value. This new tax would unfairly cause a second tax to impact your home or property.
  • Since the tax is assessed against the total value including the amount you owe on your mortgage(s), the overall equity earned by the seller is decreased.
  • In the current slow market, a transfer tax would make it more difficult for people to buy or sell homes. Once a transfer tax is put in place, it can be raised at any time. This costs people buying or selling their homes even more money.
  • A home is often the biggest and most important asset a person has in life. A transfer tax reduces the equity people have worked hard building. People already pay multiple taxes and fees on their homes. This tax will layer on one more significant closing cost you will have to pay.
  • This tax imposes the higher tax burden on lower income households that typically spend a larger percentage of their income on their home. [5]
  • Proposition 100 would prohibit state and local governments from imposing a tax when a home or other property is bought, sold, or transferred. The “Protect Our Homes” measure would guard against future efforts to pass a tax on property transfers. [6]

Donations to Proposition 100

Through October 20, the supporters of Proposition 100 had raised about $5.5 million to support their campaign. The main donors to the group are an Arizona realtors PAC and the National Association of Realtors.[7]

Opposition

The Arizona Education Association is opposing this measure. The association, whose president is John Wright, says Proposition 100 is "an attempt to tie the hands of Arizona's elected officials as they determine the best way to grow Arizona into the future." A statement issued by the association says:

"The Arizona Education Association opposes this initiative because it will have long-term damaging effects on public education. A vote in opposition is a step toward a stronger economy and high-quality services including great public schools and universities, quality transportation, and health care needed in the 21st century knowledge-based economy, and funded by a sound and equitable system of taxation."[8]

Opposing Arguments

  • Arizona's current tax system is too reliant on sales tax revenue, which is unstable, regressive, and unnecessarily limits economic growth. [9]
  • A real-estate transfer tax would raise in the neighborhood of $200 million per year, creating an opportunity to reduce or shift taxes in a manner that would increase economic growth. [10]

Newspaper Endorsements

Opposing Editorials

The Tucson Citizen [11]
The Tucson Weekly [12]

Ballot Status History

On August 1, supporters of Proposition 100 filed a lawsuit in Maricopa County Superior Court in the wake of news that election officials were finding a 35% rate of invalid signatures on the petitions submitted in early July, which might mean that the measure won't have enough valid signatures to qualify for the ballot.[13]

On August 9, the Arizona Republic reported that the initiative would be on the ballot despite not having enough signatures to automatically qualify. If estimates based on a random sampling of the petition signatures exceed 105 percent of the number needed to qualify for the ballot, then the measure automatically qualifies. Estimates that fall between 95 and 105 percent are supposed to be validated by each county; however, several county recorders report that they would be unable to do so by the deadline. A 1983 Arizona Supreme Court decision ruled that measures which could not be validated in a timely manner must be placed on the ballot. [14]

External links

Basic information

Supporters

Opponents

References

  1. ↑ Arizona Elections Division, 2008 Election Results
  2. ↑ Wikipedia: Real Estate Transfer Tax
  3. ↑ State Real Estate Transfer Taxes, Federation of Tax Administrators Bulletin, Feb 16, 2006
  4. ↑ Arizona Chamber steers clear of sales tax/transportation ballot measure, but endorses McCain, real estate tax ban, July 29, 2008
  5. ↑ What Are the Problems with a Transfer Tax?, Protect Our Homes website
  6. ↑ National Taxpayers Union
  7. ↑ Arizona Republic, "Big money behind some ballot props", October 27
  8. ↑ Ballot proposition guide for Prop. 100
  9. ↑ Ballot proposition guide for Prop. 100
  10. ↑ Arizona Republic, "There's a devil lurking in propositions' details", Robert Robb, September 26, 2008
  11. ↑ Tucson Citizen, "Our Opinion", October 14, 2008
  12. ↑ "Tucson Weekly", "Our 2008 Endorsements", October 2, 2008
  13. ↑ Arizona Republic, "Backers face trouble with ballot initiatives", August 4, 2008
  14. ↑ Arizona Republic, "Real-estate initiatives OK'd for ballot", August 9, 2008


Additional information about ballot litigation in 2008


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