Ducey Has Ceremonial Signing of Bill Granting New Tax Break to Religious Groups

Arizona Governor Doug Ducey yesterday held a ceremonial bill signing for legislation that provides a new tax break for certain religious groups.

Ducey had previously been quiet on the controversial legislation that he signed in late March. The bill, backed by the Center for Arizona Policy, was vetoed by Governor Jan Brewer after it was passed by lawmakers last year.

New Times sought Ducey's explanation on the bill before and after the signing, but didn't get a response. Now we have Ducey's rationale, as his office says in a statement that it "corrects a significant inequality in the way religious institutions are treated"

The legislation 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.

Ducey held his ceremonial signing yesterday at La Senda Antigua, a church the governor's office says will save $100 per month under this new law.

Ducey says in a statement:

"It was great to visit face-to-face with some of the many Arizonans who'll benefit from the positive reforms we've instituted these first 100 days. Churches provide enormous value to our communities - and whether they're rented or owned shouldn't dictate tax breaks they receive. I was proud to resolve this inequality this session, and appreciate the hard work of the sponsors and stakeholders who championed this measure. It's one more way we're keeping our pledge to ensure opportunity for all."
Support for the bill at the Legislature 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.

The Secular Coalition for Arizona, one of the major groups lobbying against the bill, pointed out that nonprofit organizations like charities -- which do plenty of good for their communities -- don't receive the same exemption.

Republican Senator Steve Smith, on the other hand, 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."

Brewer's main reason for vetoing the bill last year was that there was no guarantee the savings would actually be passed on from the landlord to the tenant.

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Matthew Hendley
Contact: Matthew Hendley