Arizona Ballot Intitive: Proposition 100

This post is in response to a friends post. You can read her post here. As I said in her comments sections of her blog, but I think it bears repeating. I know her to be a Intelligent and well educated person and I respect her opinions. I just happen to disagree with her on this one. That doesn't mean I think she is wrong and I am right. It just means I have a different opinion.

So onto the rebuttal.
Prop. 100 - Protect Our Homes (As pulled from AZ Republic)

Would amend the state Constitution to prohibit the creation of a real-estate transfer tax.

A yes vote would constitutionally bar the state, or any county, city or government entity from collecting a new tax or fee on the sale, purchase or transfer of a home or other property.

A no vote would leave open the possibility of such as tax or fee.

Excerpts from my friends Blog Post. I will be making references to it and don't what it to look like I'm quote mining or taking things out of context.

I am voting no on this amendment - I don't believe this is grounds for a constitutional amendment, and I am agreement with the Arizona Education Association, which states: "It is clear that Arizona is too reliant on taxes that do not produce consistent revenue in tough economic times. The current down turn in the economy has caused the state a $2.2 billion deficit, and Arizona does not have a viable solution. PROP 100 will change the constitution of Arizona to protect real estate corporations and developers. Changing our constitution to protect wealthy special interests will cripple our state's ability to support the needs of a growing state. 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."

The $2.2 billion deficit is a non issue in this matter. I'm not aware of any tax like this in the works, so if the prop fails to pass that doesn't mean our deficit problem would be fixed. Even if there was title transfer tax, that doesn't make it right. If I make bad financial decisions, I can't go to my boss and force them to pay me more money. That's what the politicians would be trying to do. The deficit problem was caused by the legislators not being able to budget properly. They saw all the revenue coming in with resent real estate boom and budgeted like it was going to continue indefinitely, despite advise that the real estate bubble was going to burst. Instead of preparing for the downward trend they ignored it and got us in our current mess. So instead of being responsible and budget like you or I would have to do, they would want us to fork over more money to bail them out. You and I have to live within our budget, Arizona should have to as well.

Prop. 100 may protect developers and real estate corps. but they are in the minority. Mostly it protects the home owners of Arizona. I don't know the statistics and if anyone can find them, I'd be willing to revise my position, but I'm sure the number of families that owns a single home out numbers all the homes real estate corps and developers own. By taxing the sale or transfer of titles, this hurts families more then the real estate corps. and developers. Also it could drive the value of houses down. Here's how. Say you're looking to buy a $200K house, you find one you like within your price range. You manage to come up with the down payment and financing you need. But there is this transfer tax. Lets say it's only 1% (maybe low, maybe high, I don't know, but it makes working with numbers easy), so now you need to come up with an additional $2,000 for your $200K house. Either you pony up the extra money or you try to get the seller to drop the price of the house by $2,000. $2,000 my not seem like a lot of money when it comes to a house, but it could be a deal breaker and that benefits no one. So either you are forced to pay more then the value of your house. Or the seller has to drop the price of his house. When people look at houses they look at the prices of houses recently sold in the area as a guild before making any offers. If most of the house in the area sold under there value to cover the tax, property values drops.

It's not just a tax on the sale but on the transfer of title. So if you leave a house to your children, your children are taxed. And if they can't pay the tax and are forced to sell it to cover the tax. Then the same tax gets reassessed to the new purchaser. Also any time a family looks to upgrade or downgrade their house, they are taxed on the purchase of the new home and the sell of their old home. The corps. aren't affected much because they will just adjust their prices to cover the taxes.

The Arizona Education Assoc. statement about "long-term damaging effect on public education" is just fallacious. It is just scare tactic, an appeal to your emotions, a tactic that politicians love to use. No where does it say that any title change tax would go towards education, health care, transportation, or other states services that we think to be beneficial. A title change tax could be a blank check for the legislators to spend as they see fit. To be used on special projects that benefit them. Since they mismanaged the budget already, I don't see them managing it any better with more money. I have a friend who retired this year after 35+ years as a juvenile probation officer. She has a nice pension now but while she worked there, she did not get a raise in years, aside from the occasional cost of living adjustment. (Which didn't really adjust to the raise in cost of living.) The department also had more and more budget cuts, and hiring freezes. Even during the real estate boom when Arizona saw an increase in revenue from property taxes. You would think that some of that money would go towards helping troubled kids. Help that might prevent them from becoming career criminals and hopefully transform them into honest, respectable citizens. But getting funding, even federal grants, for these children was difficult to say the least. I don't doubt that Education in Arizona is underfunded, but I don't believe that is why we are ranked last when it comes to education. Funding helps, but money is not the solution. Letting schools do what is they do by getting out of their way would go along way to improving our schools system. How can people you've never met, probably didn't even vote for, know what's best for your children's education then you and your school?