A Step Forward in the Desert

Arizona Governor Janet Napolitano last week affixed her signature to HB 2515, an innovative piece of legislation aimed at curbing self-destructive tax incentive competition among municipalities in the Phoenix metropolitan area.  The new law will reduce state-shared revenue to any city or town entirely in Maricopa or Pinal Counties that provides tax giveaways for retail development.   While the new law won't undo such abuses as the $100 million tax break previously granted for Phoenix's CityNorth development, it could serve as a model for other states seeking to put an end to this inefficient and unsound approach to economic development.