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Updated Apr 15, 2014 - 5:08 pm

Senate fails to revive Grand Canyon University tax break

PHOENIX — The Arizona Senate on Tuesday narrowly rejected an effort to
revive a proposal granting a private Christian university a major break on its
property taxes.

Grand Canyon University wants its property reclassified into a much lower rate
that would save it about $750,000 a year on its Phoenix campus. Under the
measure, any new construction at the school or at a planned Mesa campus also
would be reclassified, meaning the tax break could expand greatly over time.

A Republican senator on Tuesday unsuccessfully tried to resurrect Senate Bill
1303, which the House Rules Committee rejected on April 2 because of concerns it
ran afoul of constitutional requirements for uniform taxation and special

Sen. Steve Yarbrough, the bill’s sponsor, tried to amend another tax measure,
HB 2287, saying he had changed his proposal to address the constitutional
concerns. He said he expanded it to potentially include some other private
universities that hold regional accreditation.

“These would completely, absolutely remove any issue regarding
constitutionality,” Yarbrough said. Yarbrough has championed the bill, saying
the university was bringing good-paying jobs to the area and deserved a tax

But Democrats said the bill would shift taxes to the lower-income homeowners
who live near the university’s campus. They also said changes could expand the
proposal to include a raft of other universities and could hit the state’s
property owners with higher tax bills to make up the difference.

“This bill is a tax shift, it’s a tax increase on homeowners that cannot
afford the grave costs it is going to cause,” said Sen. Ed Ableser, D-Tempe.
“Do we want to raise taxes on good-old 80-year-old grandma who lives near Grand
Canyon University?”

The Senate rejected Yarbrough’s amendment on a 14-15 vote. He could try again
to add the amendment to other bills now making their way through the Legislature
in its final weeks of the session.

The university has poured hundreds of millions of dollars into expanding its
campus at 35th Avenue and Camelback Road in recent years and plans to start
construction on a $200 million Mesa facility this year. It also has been looking
at property in Tucson for a third campus and is considering expanding outside

But the expansion of the Phoenix campus came with sticker shock in the form of
soaring property taxes.

A major Realtor group and the Arizona Tax Research Association opposed the bill
because property tax cuts to one plot of land shifts those taxes to others.

Grand Canyon spokesman Bob Romantic has said an estimate for increased taxes on
other owners doesn’t take into account the new construction on campus that
increases the overall value of the property. That means even with the rate cut,
the campus could pay even more in property taxes.


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