Arizona is considering legislation that would end the destructive "race to the bottom" in tax competition among some of the state's municipalities. The Arizona Senate - and a key House committee - have both approved measures that would reduce state aid to any municipality in the Phoenix metropolitan area that uses tax breaks to entice businesses to locate there. State Senator Ken Cheuvront, one of the backers of the legislation, argues in a recent op-ed that "developers have learned that they can play off one city against another in order to get special tax incentives", usually in exchange for projects that would go forward without tax incentives.
Phoenix's CityNorth project - the recent recipient of $100 million in municipal tax breaks - is a perfect case in point. As the development's web site boasts, CityNorth will be "surrounded by some of the strongest housing growth in the country and the highest incomes in Phoenix," so it hardly seems that the project wouldn't be viable without millions in city subsidies. For more on how wasteful these kinds of giveaways can be and what can be done to curb them, visit Good Jobs First.