PHOENIX—The NAIOP Arizona board of directorshas unanimously opposes Prop 480, an item on the Nov. 4 generalelection ballot that asks Maricopa County voters to approve a $1.4billion general obligation bond over 27 years for the MaricopaIntegrated Health System.

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If passed, Prop 480 would be the third largest bond issuance inArizona history, according to the Arizona Tax Research Association,the group spearheading the effort to defeat the proposition.

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The NAIOP board could have supported a narrower bond requestfocused more on the behavioral health component and replacement ofthe Level One Trauma Center and Arizona Burn Center, NAIOP-AZpresident Tim Lawless says.

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However, it is opposed to the bond issuance, which would pit ataxpayer supported institution against a number of privatehealthcare systems where there is much duplication of services andexcess hospital beds that private payers must support within arelatively small geographic radius of about five miles.

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Lawless tells GlobeSt.com, “This is coming at abad time. Businesses are just recovering from the Great Recession.It's too expensive and it has too many bells and whistles.

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“We are especially concerned about duplication and unfaircompetition with taxpayer money,” Lawless says. “While theproponents claim there are three discrete funding components, thewording of the ballot proposal seems far more open-ended regardingthe purposes the monies can be used.

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“The timing of the bond issuance is also troubling as there wasa massive property tax shift from residents to businesses duringthe Great Recession and these same businesses are still strugglingto recover,” Lawless adds.

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From fiscal year 2010 to fiscal year 2014, there was a 30%increase in property tax rates for businesses. If the bondpasses, a typical small business with assessed valuation of $1million will be paying $7,800 more over time in property taxes.

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“We also believe patience is the watchword as we still are notcertain of all the impacts of the Affordable Care Act, which wasallegedly created to better meet the needs of the uninsured yet whoare cited as the primary reason for the bond,” Lawless says.“Related to this, the state expanded Medicaid insurance to the poorto draw down more federal dollars and there appears to be an equityissue that only Maricopa County residents are being asked to payfor the MIHS services when these same taxpayers already pay $65million per year.”

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The point that proponents make where interest rates are near orat historic lows thereby decreasing overall costs seems valid untilit is realized that the total cost of the bond ($935 million is theactual amount) with principal and interest will exceed $1.4 billionover 27 years.

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The NAIOP board says it needs the Affordable Care Act provisionsto be understood with all of the attendant costs associated withits implementation before Arizona embarks on the bond issuancewhere a new hospital and multiple clinics financed by taxpayermoney are constructed only to compete against private hospitalsystems in an area that already has excess bed capacity andduplication of services. The costs will be shouldered by the sameprivate payers.

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“Our board has also set aside some level of funding for theopposition campaign formed by ATRA,” Lawless says of a $10,000contribution to be made by NAIOP Arizona to the oppositioncampaign.

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