Some Arizona cities want hands tied when it comes to developer incentives

MESA (AP) - Arizona lawmakers are considering a bill that would punish municipalities for giving financial incentives to companies for building shopping malls, auto dealerships and other developments.

Some of the bill's supporters are the municipalities themselves.

They say they want the Legislature to tie their hands so that more taxpayer money goes toward their cities instead of big businesses.

While activists have long criticized incentives such as tax rebates, municipalities have defended them as essential to economic development.

Now, more elected officials agree that the deals are going to far as developers pit communities against one another, saying they'll take their tax-generating project to the one that gives them the biggest break.

"We're just playing a big poker game with the taxpayers' money," Scottsdale Councilman Jim Lane said.

Tempe Mayor Hugh Hallman said communities have overused incentives in a "race to the bottom."

"We're not the ugly kid that has to hang a pork chop around his neck to get the dog to play," Hallman said.

Incentive supporters say communities win even with tax breaks because they're drawing more money than if nothing had been built on a property.

"Fifty percent of a large number is better than zero," Mesa Councilman Rex Griswold said. "Most of them have been pretty good business decisions."

Gilbert Mayor Steve Berman said lawmakers shouldn't assume they know more than communities do. His town rarely gives incentives, but its biggest one is among the state's most controversial.

The town offered a $60 million package to a developer to build Santan Motorplex, the state's largest auto mall.

Berman said if the town hadn't offered the incentive, the project would have gone to Chandler.

He said lawmakers are being hypocritical by trying to restrict municipal incentives while the state still offers incentives to big business.