People need places to live and businesses need space to operate. Thus, real estate development is a fundamental part of economic development in any market. This is particularly true in the State of Arizona where accommodating an influx of new residents has been a primary source of all economic growth. However the foundation of this growth, development, and success is something many outside the real estate development industry take for granted, the ability to finance public infrastructure. Public infrastructure is quite literally the foundation that real estate development and economic vitality are built upon. If we take away the ability to fully finance the construction of roads, utilities, parks, and other necessities, economic growth and development activity would be hobbled. Regrettably, our State legislature is now considering a bill that would strip the funding capabilities of Community Facilities Districts (“CFDs”) and do exactly that.
CFDs are a funding mechanism used to finance the acquisition, construction, and upkeep of public infrastructure by levying a tax against the real property that directly benefits from it. Simply put, when cities, towns, and counties do not have the funds to develop new roads, water, sewer, and other infrastructure to accommodate growth private developers can form a CFD, assessing the new development that will benefit from it directly. CFDs are a tool used by new development to pay for itself. Without their ability to operate in Arizona as they have historically, the economic development potential of our State will be jeopardized as the burden of funding new infrastructure will have to be shared disproportionately with existing residents and enterprise.
The Arizona State Legislature is contemplating SB1415, which contains language that would drastically reduce the funding capabilities of CFDs by capping their bonding capacity. If the legislature passes this bill, a critical tool to finance the acquisition, construction, and maintenance of public infrastructure will be diminished. The consequence will be a proportionate reduction in the potential for our State to continue to attract new investment and the sustained influx of human capital that has historically kept Arizona’s economy strong.
Contact your State Representative today and tell them to vote NO on SB1415 when it comes to the Floor! Below is a list of House Leadership. We encourage you to contact them and to contact your own representative where you live or where you have significant development plans.
Minority Leader Chad Campbell chcampbell@azleg.gov Majority Leader David Gowman dgowan@azleg.gov Majority Whip Rick Gray rgray@azleg.gov Speaker Pro Tempore JD Mesnard jmesnard@azleg.gov Minority Whip Eric Meyer emeyer@azleg.gov Speaker of the House Andy Tobin atobin@azleg.gov
Entire roster here
