Maybe it's a good idea. A music-themed amusement park in Eloy just might work. True, the park would be in the desert between Tucson and Phoenix with a limited available work force and limited infrastructure for large numbers of visitors.
Still, there have been surprises before. Who could have predicted Branson, Missouri?
But the developers of Decades Music Theme Park want a big favor from the state. They want their park to be a "Theme Park District." This would be a minigovernment agency with the ability to issue tax-free government bonds. The bonds would be paid off with a 9 percent sales tax within the district.
At first glance, this doesn't seem like that big of a deal or anything that could affect the average taxpayer. Businesses borrow money for an initial capital investment all the time. And the sales tax would be paid only by people coming to the park.
The thing is, this is a pretty special privilege the state is being asked to confer. In a nutshell, this private business would be financed as if it were a municipality, county or the state, getting all the tax benefits that come along with that. Needless to say, most businesses in Arizona don't get these sorts of benefits.
The adoption of this proposal would allow the state to favor one business by lowering its investment costs and not doing so for other businesses. Arizona's constitution has several provisions to prevent these types of deals. The Goldwater Institute has filed a lawsuit against the city of Phoenix to prevent it from offering a sweetheart deal to a mall developer.
This project also does present a risk for all Arizona taxpayers.
If Decades' owners default on their "government" bonds, Arizona's legitimate government bond ratings could suffer. All of these creative financing schemes for private businesses that cities around the state continue to offer beg one question: If we are so desperate to help businesses open in Arizona, why don't we lower costs for everyone? If costs are too high, then cutting business taxes is the way to address the problem.
Byron Schlomach, Ph.D., is director of the Center for Economic Prosperity at the Goldwater Institute.