Senator, others sue to stop tax subsidies

Posted on August 08, 2007 | Type: In the News
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Six small-business-owners, including a Senator and a one-time legislative candidate, filed a lawsuit today challenging nearly $100 million in tax subsidies Phoenix gave to the developer of a planned mall.

The lawsuit, Turken v. Gordon, was filed in Maricopa County Superior Court and seeks an injunction against the subsidy and to restore the constitutional ban on subsidies.

If successful, the suit would tie the hands of city officials wishing to offer subsidies to lure companies away from neighboring cities.

The lawsuit argues tax subsides violate three provisions of the Arizona Constitution: the gift clause, which prohibits subsidies to corporations; the equal privileges and immunities clause, which says that if the government grants a privilege or immunity to one taxpayer, it must have a good reason for not granting it to all taxpayers; and the provision forbidding special laws that single out one corporation for benefits.

All of those provisions were put in the Arizona Constitution to prohibit precisely the type of special- interest giveaways that CityNorth exemplifies, said Clint Bolick, the director of the Goldwater Institute Scharf-Norton Center for Constitutional Litigation, which is representing the business owners in the lawsuit.

The plaintiffs are six Phoenix small business owners who, like the overwhelming majority of Arizona businesses, do not receive subsidies: Meyer Turken, owner of Turken Industrial Properties, a small real estate development and management company; Sen. Ken Cheuvront, D-15, owner of Cheuvront Wine and Cheese Cafe and Cheuvront Construction; Zul Gilliani, who owns an ice cream shop at Paradise Valley Mall; James Iannuzo, who owns Sign-a-Rama and made an unsuccessful bid for the House in District 20 in 2004; Kathy Rowe who owns Music Together; and Justin Shafer, owner of Hava Java.

This is Robin Hood in reverse, Bolick said. The City is taking nearly $100 million in taxpayer money to give to a Chicago developer to build a fancy shopping mall. Corporate welfare is a blatantly improper use of government power.

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