2008 Ballot Propositions Transcript

PROPOSITION 100, PROTECT OUR HOMES

Secretary Brewer Explanation of a Yes and No Vote

MODERATOR CAREY PFEFFER: First, Proposition 100, Protect Our Homes.

SECRETARY JAN BREWER: A yes vote shall have the effect of prohibiting any new tax, fee, or other assessment on the sale, purchase or other conveyance of real estate after December 31st, 2007.

A no vote shall have the effect of retaining the current law, which allows taxes on sales or transfer of real estate.

Argument For Proposition 100

MR. FRANK DICKENS: Good evening. I'm Frank Dickens, and I'm honored to be here tonight to talk in support of Proposition 100. Yes on Proposition 100, Protect Our Homes, is a citizen's initiative to protect your home from double taxation. In Arizona, politicians have considered a real estate transfer tax for the past few years. This tax would be charged when you buy or sell a home. This type of double tax is just a bad idea. Governments already collect taxes on your property every year.

Can you imagine how devastating it would be, in this economy, for someone to sell their home and also lose additional equity by having to pay a transfer tax? Transfer taxes are charged not only on the equity of your home, but also on your mortgage, so you actually would pay a tax on something that you didn't receive.

In recent news we have learned that many Arizonans pay over 50 percent of their income to mortgage payments and home expenses. A transfer tax just adds to the burden and will make it more difficult to sell your home. Some will say that a transfer tax should be decided by politicians.

By voting yes on Proposition 100, you will have the best protection available from double taxation. Voting yes on Proposition 100 puts decisions about real estate transfer taxes where it should be, in the hands of the citizens of Arizona.

You can't tax something and make it more affordable. Teachers, firemen, and police officers can't afford to live in the communities that they serve and they don't need additional taxes driving up the cost of housing. There are those who are on fixed, moderate, and low incomes, and they should not be burdened with the sales tax when they are forced to sell their home because of a job transfer or a medical condition.

Remember, we already pay annual property taxes, and being double taxed just because you buy or sell a home is just wrong. I hope you will join me in voting yes on Proposition 100 to protect your home. Thank you.

Argument Against Proposition 100

MR. BRAD VANDERMARK: Vote no on Proposition 100. This is a horrible proposal and a destructive public policy of past.

First, this hypothetical real estate revenue source, or tax, or fee is not being assessed anywhere in Arizona.

Second, under the Arizona Constitution, it takes a super majority, a two-thirds vote of the Arizona House, the Arizona Senate, and the Governor's signature in order to enact any new proposed revenue source or fee or tax. If the Governor vetoes it, it takes a three-quarter vote of the Arizona House and the Arizona Senate. These are huge hurdles for democracy to overcome. If they do, that's democracy at work. Vote no on Proposition 100.

Third, the agricultural sector is a proponent of this proposal. According to the United States Department of Agriculture, Arizona and Wyoming have the largest average farm size in the United States. Not just bigger, but over eight times bigger than the national average. We are talking about multi, multi, multi million dollar corporations and properties that want to be exempt from their social responsibility of paying the cost of doing their business. Ultimately, you and I, the taxpayers, will pick up their cost.

Fourth, and finally, the real estate sector is another proponent. Over the last two weeks, the financial markers are in crisis with a proposed massive bailout to deal with the real estate sector's sub-prime loan mortgage, greed, and fraud. Now the real estate sector is supporting another proposal to shift their social responsibilities to you and I, the average taxpayer.

Vote no on Proposition. I'm Brad Vandermark. I approve this message. Vote no on Proposition 100. Thank you.

Questions and Answers for Proposition 100

Our first question is from John. The question is: How is a real estate tax different from a property -- how is a real estate transfer tax different from a property tax? Sort of explaining the difference between a real estate transfer tax than what we traditionally know as a property tax.

MR. MIKE BRAUN: Carey, you're correct. Most of us in the room tonight are familiar with the property tax. That tax is assessed on the value of the property and it's assessed and paid every year. A transfer tax, or at least transfer taxes that have been enacted in other jurisdictions, are traditionally a one-time tax when the property actually changes hands, either by sale or really any other technical legal transfer of the ownership of the property. But that transfer tax would not be paid on an annual basis.

MODERATOR CAREY PFEFFER: All righty. And I think we've got time for one other quick question. This is from Andrea. The question is: I don't own property. How will this proposition effect me if it's approved? If someone is not a property owner, how might they, if they would be, in any way, impacted by the passage of Proposition 100.

MR. JOSEPH KANEFIELD: Carey, currently if you're not a homeowner, and this proposition were to pass, it wouldn't have an impact on you. If you were -- if it were to pass in the future, and you were to purchase a home, I suppose it would impact you because it would prohibit any governmental entity from imposing a transfer tax on that transaction.

MODERATOR CAREY PFEFFER: Thank you, Joe.

MODERATOR CAREY PFEFFER: A question from Connie in Proposition 100, the Protect Our Homes Measure: If Proposition 100 fails, could the cost of purchasing a home increase? If Proposition 100 fails, could the cost of purchasing a home increase?

MR. MIKE BRAUN: Carey, if Proposition 100 were to fail, I suppose theoretically in the future it could cause the increase in the purchase or any other transfer of a home. That transfer fee does not exist at this time, but if the constitutional amendment were to fail, then a future legislature or a future initiative proponent could at least theoretically propose that transfer tax. If it were enacted, that would increase the cost of acquiring the home.

MODERATOR CAREY PFEFFER: But it would take that action?

MR. MIKE BRAUN: It would take that action. It does not automatically follow from passage or defeat of the proposition.

MODERATOR CAREY PFEFFER: On Proposition 100, the Protect Our Homes Measure: Do we have an estimated tax percentage that would be used to figure the transfer tax amount? In other words, what is the mechanism that would be used to calculate the transfer tax amount? That seems to be -- the question is from Kristine. Again, the focus of the question is Proposition 100. Do we have an estimated tax percentage that would be used to figure the transfer tax on?

MR. JOSEPH KANEFIELD: We can look at what other states charge, the states that do impose a real estate transfer tax. And that ranges from .5 percent to 2.2 percent generally. But as noted in the publicity pamphlet on -- on page 10, there has been no such fee or tax enacted in Arizona, at least since this year, and arguably even before that.