Editor’s Note: The Rules Committee passed HB2456 today.
According to the 2016 performance and financial analysis of the Rio Nuevo Multipurpose Facilities District, “when considering the District’s ability to undertake currently unbudgeted projects that would substantially improve the design quality and performance of the TCC (i.e., the full renovation of the TCC and additional hotel development); it does not appear as though the District’s financial position would be sufficient to maintain solvency and cover the costs of construction.”
The Rio Nuevo Multipurpose Facilities (stadium) District was supported by southern Arizona residents in 1999 in an effort to revitalize down town Tucson. The District was tasked with building a stadium and a hotel and a handful of cultural projects.
After squandering over $200 million on nearly everything but projects the voters approved, the Arizona Legislature changed the terms agreed to by the voters and extended the life of the District.
Last week, in front of the Arizona House Of Representatives’ Ways and Means Committee, Rep. Mark Finchem defended his bill, HB2456, which will extend the life of the District to 2035 and beyond.
Rio Nuevo District Board chair, Fletcher McCusker, and car salesman Jim Click joined Finchem in a rare appearance before the committee.
Many in the community remain skeptical about the management of the Rio Nuevo TIF District. “I am very concerned these funds are being used to support the causes and cronies of the Rio Nuevo Board members,” stated Pima County Supervisor Ally Miller. “Pima County administrator Chuck Huckelberry has already partnered with Rio Nuevo to build one of the largest office spaces in Pima County. I have a lot of concerns because I followed the past abuses of the Rio Nuevo funds and it now appears that Chuck Huckelberry and others have found a way to avoid the constitutional Gift Clause requirements which are in place to protect taxpayers against crony deals. Rio Nuevo Board member, Fletcher McCusker, who testified before the Legislature discussed a deal he has struck with the City of Tucson when the Broadway Road widening occurs. McCusker stated approximately 50 properties would be condemned and then “gifted” to the Rio Nuevo TIF District for development. Condemnation should be a rare action and used only for the greater good of the community. It certainly raised a red flag when McCusker stated the City would ” gift” those condemned properties to Rio Nuevo. The taxpayers were promised a sunset of this District and I believe the Legislature should honor that promise and allow this authorization to sunset,” said Miller.
The District’s lobbyists, former Arizona legislator Jonathan Paton, unnecessarily introduced the used car sales celebrity to the committee as part of his duties.
For his services to the District, Paton has received over $287,000 from Tucson taxpayers since 2013. Many say he has earned it. Just last week, Paton raised eyebrows when he was kicked out of the legislators’ lounge for aggressively lobbying for Rio Nuevo.
| RN Payments to Paton & Assoc. | |
|---|---|
| 2018 19-Aug | $25,000 |
| 2014 29-Jan | $20,000 |
| 2014 14-May | $20,000 |
| 2014 14-Oct | $45,000 |
| 2015 8-Apr | $20,000 |
| 2016 7-Mar | $45,000 |
| 2016 9-May | $20,000 |
| 2017 20-Jun | $45,000 |
| 2018 11-Jan | $50,570 |
| Total | $287,250 |
When asked after the vote why he supported Finchem’s bill, Rep. Jay Lawrence responded by email: “I was in Tucson and saw the incredible progress being made there. Thanks to Rio Nuevo Tucson’s downtown is being revitalized.” Lawrence ignored our other questions:
1) Would you support granting TIF status/districts to communities like Guadalupe or Nogales?
2) Do you have any concerns about the fact that tax dollars are taken away from some of Tucson’s most distressed areas and funneled to wealthy down town Tucson?
3) What government organizations should also be exempt from Arizona’s Gift Clause?
Those questions are the ones being asked by residents in the eighth poorest metropolitan area in the country with the highest crime rate in Arizona.
[View Rio Nuevo Performance Audit – 2016] [View Rio-Nuevo Financial Statement – 6/17]
Earlier this year, Tucsonans passed a sales tax increase only to find out that it wasn’t enough to keep the City afloat at its current level of service. Because tax revenues are down, the tax increase is simply too little. Many critics say the dire situation is compounded by the fact that Rio Nuevo siphons off the sales taxes collected in the District and uses them only within the District’s boundaries.
The hope was that a revitalized down town would spur economic growth and through a trickledown effect the rest of the city would benefit. Instead, no matter how much revitalization occurs down town, the decrepit condition of the rest of Tucson has forced businesses to shutter and residents to flee.
Now, Rio Nuevo is little more than a Gift Clause dodge for Pima County’s failing government in its effort to prop up the area enough to attract new businesses.
According to the Arizona Tax Research Association, HB2456 should be opposed for the following reasons:
1. Allowing local governments to use the state sales tax base to assist in the funding for local projects is not only dangerous precedent, but also bad tax policy.
2. Taxpayers in other communities around the state of Arizona, who are faced with funding their own projects, should not be asked to indirectly participate in the funding of these local projects. Diverting state sales tax receipts from the state general fund to finance local projects makes all the state’s taxpayers participate in the funding of what is typically a local project.
Attempting to tap state funds for financing local projects became very popular in the late 1990s and ATRA strongly argued against all of those measures. In fact, this form of pork barrel financing became so popular, the Legislature ultimately sunset all of the increment financing laws on the books.
Each of the TIF projects that have been debated over the years had one thing in common: they were extremely important to the communities working on them and each felt they were worthy of state assistance. The question is where do you draw the line? Are you prepared to allow TIF financing for the other cities that will most certainly demand similar treatment?
At a minimum, if the state desires to assist in the funding of local projects, it should do so through the appropriations process where the projects compete for funding with all other request for public funding.
Finchem’s bill, thanks in part to support from Click, who contributes to the campaigns of many Republican legislators, is expected to sail through the Rules Committee and be considered by the entire House in record time.
However, there is still time to register your opinion of the bill.
Picture Rocks activist Albert Lannon, who lives in Finchem’s district, told ADI that he wishes some of those down town Tucson revitalization millions could go to poor rural colonia communities like his. “We can’t get our dirt roads even put on the list for grading and RTA refuses to extend a little-used SunTran public transportation line out to us. They take our tax dollars but give us little in return. The only trickle-down we get smells pretty bad.”
Related articles:
Finchem Hopes To Extend Rio Nuevo District Funding To At Least 2035
Moore and Hill reveal the truth about Rio Nuevo (transcript)
Watchdog Moore Resigns From Rio Nuevo
Rio Nuevo maintains tradition with help of Legislature
Specter of Rio Nuevo: Closing arguments in Tucson records case today