Majority support state's new employer sanctions law, poll says

Oct. 29, 2007

Most Arizonans support the state law scheduled to go into effect Jan. 1 that will punish businesses that knowingly hire illegal immigrants, according to a new statewide poll.

Of those surveyed statewide, 69 percent said they support the law that will require businesses to verify employees' legal eligibility status through a federal database, named E-Verify. The poll found 26 percent said they opposed the law and 5 percent had no opinion.

The strong support for the sanctions came even though 46 percent said they think the law will increase racial and ethnic profiling and 37 percent said it will hurt Arizona's economy.

Under the law, firms found to have knowingly hired illegal immigrants could face a 10-day suspension of business licenses. A second conviction would lead to permanent loss of a company's state licenses.

A coalition of business groups has filed a lawsuit in federal court challenging the law.

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As the lawsuit wound its way through the judicial system, civil rights groups partnered with representatives from the business community in opposition to the law.

The lower courts initially ruled that federal law does not prohibit states from requiring employers to use the E-Verify system.

The case reached the U.S. Supreme Court where arguments were heard in Dec. 2010. A ruling in the matter is expected by this summer.

Retail sales tax subsidies short in Oro Valley

Nov. 5, 2007

Subsidies by the Town of Oro Valley to persuade developers to build retail centers there have brought in only a fraction - less than one-fifth - of what was promised when the deals were made.

A report by Stacey Lemos, Oro Valley's finance director, to the Town Council says economic development agreements (EDAs) were signed with four retail developments but only two have opened so far.

The deals call for the two and the developer to share sales tax revenues as a rebate for building the centers.

The first center has been open for two years. In that time the original developer - it has since been sold by B.P. Magee to Bourn Partners - projected $106 million in sales bringing in $2.1 million in sales tax revenue.

Instead, the report says sales have been $35.5 million and sales taxes amount to about $442,000, of which $203,000 is being rebated to Bourn.

At Steam Pump Village, which has only been open a year, projected sales in the first year were to be $26.2 million with sales tax revenues of $525,000.

Instead sales revenues have been about $2.1 million and sales tax has amounted to $46,000 of which $18,300 is being rebated to developer Evergreen Devco Inc.

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In late 2007, the Oro Valley Town Council voted to stop using retail sales-tax sharing for economic development.

By January 2009, the council had decided to suspend payments to its EDA partners pending the outcome of an Arizona Supreme Court case that challenged the legality of a similar sales-tax sharing agreement in Phoenix.

In a Solomonic ruling, the court agreed that the deals could violate the state constitution but did not nullify any existing sales-tax sharing agreements. Instead, the court said future deals would have to display a discernable public benefit.

Oro Valley later reinstated payments to its EDA partners.

Another example of why politicians should be kept out of economic development

November 5, 2007

Even before it was born as a separate municipality, Oro Valley has been different. Special. If you don't believe us, just ask most anyone who is associated with the town.

Faced with then Tucson Mayor Jim Corbett's vow to bring nearby unincorporated areas of Pima County into the city limits - "kicking and screaming," if necessary - the good folks in Oro Valley decided in the late 1960s to incorporate. The Pima County Board of Supervisors refused to approve the incorporation and the legal wrangling went all the way to the state Supreme Court, which ruled in favor of the incorporation. And so, in 1974, the Town of Oro Valley was born.

Those founding fathers promised their citizenry at the time they could pull off incorporation without instituting a property tax. In these days of failed promises by politicians and lack of institutional memory, it's to the Town of Oro Valley's credit that it still doesn't impose a property tax.

Instead, Oro Valley mostly pays for itself through a 2 percent sales tax and its portion of state revenue sharing.

But like any bureaucracy, the Town of Oro Valley's revenue had to grow. The answer would obviously be in getting more sales taxes. So a couple of years ago the town got suckered into approving some economic development agreements to persuade retail developers to locate centers within the town's boundaries - and in one case, extending its boundaries. The deals called for developers to receive rebates - essentially kickbacks - from sales taxes their retail centers were supposed to generate.

Now the town is licking its wounds.

Two-year-old Oracle Crossings was forecast to have $106 million in sales over the first two years and bring in $2.1 million in sales taxes. Instead revenues are about one-third of that amount, $35.5 million, and sales taxes are amounting to just over $441,000.

It's a similar story at Steam Pump Village, which was projected to have $26.2 million in sales producing $525,000 in sales tax revenue. Instead it's less than one-tenth that amount, $2.1 million in sales bringing in just under $46,000 in sales taxes.

One of these days these people will come to understand they will make fewer dumb decisions when they listen to business. Even the politicians and bureaucrats from special places like Oro Valley can learn.