Tax break for GCU could mean higher property taxes

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By Matthew Seeman By Matthew Seeman
By Matthew Seeman By Matthew Seeman
By Matthew Seeman By Matthew Seeman
By Matthew Seeman By Matthew Seeman
By Matthew Seeman By Matthew Seeman

PHOENIX -- Arizona state lawmakers are considering approving a tax break for a private Christian university, which could also raise property taxes in the area.

The Arizona Legislature is working on a bill that would give Grand Canyon University a special subsidy on its property taxes. Republican Sen. Steve Yarbrough sponsored the bill, saying the subsidy is needed to incentivize West Valley development.

"It’s an economic development bill of great significance," Yarbrough said. "The west side of Phoenix has not exactly been the greatest beneficiary of our economic development efforts."

GCU would be the only private university in the state to qualify for the bill's tax breaks. The university had a net revenue of $600 million last year, and it plans to invest $400 million in the next few years.

University officials would not agree to an on-camera interview with 3TV. In a statement, university President Brian Mueller said GCU’s property taxes rose from $300,000 in 2012 to over $1 million in 2013, and the school expects those taxes to remain the same in 2014.

School officials added that the subsidy would spur economic growth in the West Valley. But Kevin McCarthy of the Arizona Tax Research Association, a tax watchdog group, does not believe a subsidy would help growth, calling it unfair to taxpayers.

"If I had a nickel for every company that made an argument that, ‘If you cut my taxes, I can do something great for the community,’ I’d be rich," he said.

Data from the ATRA indicates the university’s property tax rate would fall from 19 percent to 5 percent. A homeowner of a $150,000 house would then see a property tax increase of about $38, with local businesses paying even more.

"There are many impacts associated with it, not the least of which it shifts taxes to other taxpayers in the district," McCarthy said.

One homeowner said he has no interest in paying higher property taxes to subsidize GCU.

"I think it’s a wonderful school," Bill McGlamery said. "The people, the teachers, everything is great, but I don’t feel that I need to pay for it."

He added, "I’m retired. I’ve been on a fixed income for years, and I don’t care how little they say they’re going to raise it. Anything is too much for me."

Yarbrough said the tax burden could shift from the university to home owners, but the increase would be "infinitesimal" because the area affected would be large in scope.

McGlamery disagreed with Yarbrough’s assessment of the increase.

"Tell me what infinitesimal means to him," he said. "Because to me, I heard it was something like $50 to $60 and to me, that’s not infinitesimal. That’s a major event when you’re not making that much."