Arizona Lawmakers Pass New Tax Break for Religious Groups

Arizona Lawmakers Pass New Tax Break for Religious Groups
Matthew Hendley

The Arizona Senate yesterday passed a bill that creates a new tax break for certain religious groups.

A version of the bill, which is being pushed by the notorious Center for Arizona Policy, was vetoed by Governor Jan Brewer after it was passed by lawmakers last year. Now it's up to Governor Doug Ducey to decide whether this bill becomes law.

See also: -Proposed Tax Break for Religious Groups Protested at Arizona Capitol

The legislation, House Bill 2128, creates a property-tax exemption for religious groups that lease, rather than own, their places of worship.

According to an analysis prepared by budget staff at the Legislature, this bill could cost the state up to $2.1 million starting in 2017.

"This bill would shift the tax burden to property owners not affected by this legislation and/or result in property tax losses for local governments," that analysis says.

Support for the bill was largely Republican, and opposition largely Democrat. The opposition argued that this was an unfair exemption for churches, as proponents argued that the bill is necessary because churches do good in the community, while nonprofit organizations don't receive the same exemption.

"We've heard over and over on different bills, 'We can't play favorites,'" Democratic Senator Olivia Cajero Bedford said. "But it plays favorites, and [would cost] the state too much money, and it's simply not not needed. In my opinion, this is unfair policy for the state of Arizona."

Opponents also noted that the tax break actually goes to the property owner that leases the space to a religious group, and there's no guarantee that they'll actually pass along that tax break.

Republican Senator Steve Smith argued that churches that own their own property already enjoy such a tax break, so this is simply making state law consistent.

"Our Constitution is very clear when it says religious associations and institutions are allowed to be exempt," Smith said. "So we're not reinventing the wheel and we're not asking that daycare centers and those that feed the hungry be exempt.

Republican Senator John Kavanagh, also in favor of the bill, argued that this bill actually preserves the separation of church and state.

"The whole reason why we don't tax churches is that we want to maintain separation between our churches and our states," Kavanagh said. "We don't want churches involved in court litigation and tax assessors trying to figure out how much a church is worth. That's what destroys the separation of church and state."

Despite efforts from groups like the Secular Coalition for Arizona trying to defeat this pill, it actually received more support from the Senate this year than it did last year, passing this time around on an 18-11 vote. Last year, it was a 16-14 vote.

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Follow Valley Fever on Twitter at @ValleyFeverPHX. Follow Matthew Hendley at @MatthewHendley.


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