Maybe its 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 mini government agency with the ability to issue tax-free government bonds. The bonds would be paid off with a nine percent sales tax within the district.
At first glance, this doesnt seem like that big of a deal, or something that could affect the average taxpayer. Businesses borrow money for an initial capital investment all the time. And, the sales tax would only be paid 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, and get all the tax benefits that come along with that. Needless to say, most businesses in Arizona dont get these sorts of benefits.
The adoption of this proposal will allow the state to favor one business by lowering its investment costs and not doing so for other businesses. Arizonas constitution has several provisions to prevent these types of deals. In fact, 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, Arizonas 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 dont we lower costs for everyone? If costs are too high, then cutting business taxes is the way to address the problem.
Dr. Byron Schlomach is the director of the Center for Economic Prosperity at the Goldwater Institute.
Phoenix Business Journal: Rock 'n' roll theme park debuts Web site, seeks tax deal