The best political brawl in Arizona has broken out in an unlikely place: the Republican primary for secretary of state.


The chief antagonist is former Phoenix Councilman Sal DiCiccio. DiCiccio, 44, is a modern-era political entrepreneur. He has spent most of his adult life either holding or running for office, or helping others do so.

As a city councilman, DiCiccio was a useful gadfly, particularly on fiscal issues such as the financial viability of the city-built downtown garage, cost overruns on the new City Hall, and the lumbering Phoenix light-rail plan.

Calling business property taxes a major threat to the state’s economic stability, three organizations are asking the Legislature for a change in the tax system.


“The single greatest imbalance in Arizona’s tax system is the extreme burden placed on business property,” said a paper presented by the Arizona Chamber of Commerce State Budget Committee to the Legislature’s Tax Reform for Arizona Citizens Committee meeting on Sept. 23.

Arizona property owners paid $334 million more in property taxes this year compared with last year, shattering the one-year growth record set in 2000, a recent analysis showsMuch of the increase came from new construction. Maricopa County alone experienced $1.4 billion in new taxable property last year. But a substantial amount of growth came from the average 7 to 8 percent increase in the value of existing homes.

An Arizona mining company is trying to kill the main constitutional protection for homeowners against high property taxes.


Asarco is asking Maricopa County Superior Court Judge Michael Yarnell to void a voter-approved provision of the state Constitution, which limits primary property taxes to no more than 1 percent of a home’s full cash value. That translates to a primary tax rate for homeowners of no more than $10 per $100 of assessed value.

An association of large business taxpayers wants to amend the state constitution to require future local government bond proposals and budget overrides to be approved by two-thirds of voters instead of a simple majority.


The Arizona Tax Research Association said the amendment might be the only way to resolve a perceived unfairness that business property tax assessment ratios are 2 1/2 times higher than ratios for residential property tax.

The two most powerful lawmakers on issues of tax policy want to tap the state’s anticipated revenue surplus — eventually up to $200 million a year — to reduce what businesses pay in property taxes.


Sen. Dean Martin, R-Phoenix, and Rep. Steve Huffman, R-Tucson, are crafting legislation for the upcoming session to reduce the tax burden on businesses.

Arizona 's business community has long complained that the state's property tax system places a disproportionate and unfair burden on commercial establishments, but its calls for change have brought no relief from the Legislature. Now the Arizona Tax Research Association, which represents the interests of many of the state's large employers, wants to ask voters for reform through a state constitutional amendment.

Arizona business property taxes are high and lowering them would be economically productive.


But it seems that lawmakers are mostly looking at bad ways to do a good thing.

The problem is Arizona's complicated property tax system. All property is appraised at its market value. Property tax rates, however, are applied to 25 percent of that value for businesses, but only 10 percent for homeowners.

As a result, Arizona has relatively low residential property taxes, but among the highest in the country for business.

Construction and skyrocketing property values could translate into millions of dollars in extra funds for cities, schools and Maricopa County agencies this year.


That boost could spell some relief for cash-strapped government agencies.

"The county attorneys in three different counties, as well as a Flagstaff law firm, have been looking at this issue, and they’ve all come to different conclusions," said Deputy County Attorney Lance Payette regarding a request by the Northeastern Arizona Technological Institute of Vocational Education (NATIVE) to raise its tax levy from five cents to $1.25 per $100 of assessed valuation in the Kayenta and Piñon school districts.