Arizona’s 9.2 million acre of state land trust is one of the largest in the nation, and was created to generate revenue for 13 beneficiaries, particularly K-12 schools. 

Last week, the heads of the Arizona State Land Department updated the real estate community about how the agency is leveraging the real estate boom to carry out that mission.   

鈥淚n recent years, the Arizona State Land Department has executed high profile deals across the Valley, resulting in billions of dollars of investment and new job opportunities for Arizonans,鈥� said Cheryl Lombard, president and CEO of , the voice of the real estate community in metro Phoenix, which hosted the event. 

鈥淭he department is a critical tool for economic development in the state and for funding important state programs.鈥�  

Land department taking more business-minded approach 

Arizona State Land Commissioner Lisa Atkins spoke at the event about the agency鈥檚 constitutional role and challenges. Unlike public land, any use or sale of trust property must be used solely to generate revenue for its beneficiaries. 

About 90 percent of the land is leased by ranchers and farmers who provide a steady revenue stream for the beneficiaries, Atkins said. Encouraging economic growth also is part of the mission. 

In recent years, the department has taken a more 鈥渂usiness-like鈥� approach in managing the huge land trust, including strategic auctioning of parcels to stimulate development to produce economic benefit for the beneficiaries and citizens, she said. 

鈥淭he governor has been very specific that the agency serve customers and the state of Arizona in a more business-like fashion,鈥� Atkins said. 鈥淪o, every time we take a look at trust assets, we look at how it can be a part of the state鈥檚 economy.鈥� 

Since Ducey took office in 2015, the agency has held 59 successful auctions, she said. Last year alone, total receipts from state land department leases, fees and auction sales were $205.1 million. 

Promoting economic development through zoning banks

As part of its mission to promote tax-generating development, the agency has been teaming up with communities to create  鈥渮oning banks.鈥� These allow cities to annex state trust land for particular uses to attract more bidders and cut the timeline for successful buyers to go from auction to shovel in ground, Atkins said. 

Cities like Phoenix, Peoria, Tucson, Scottsdale, Queen Creek, and the town of Eager in northeast Arizona have used zoning banks as economic development tools, she said. 

High profile deals reap revenues for beneficiaries 

Jim Perry, the deputy land commissioner, also spoke at the event about how the agency has been taking advantage of the robust real estate market to create economic development and new jobs.

Perry detailed some of the recent high profile auctions that are reaping rewards for the  beneficiaries include:

-Homebuilder D.R. Horton won a highly sought after 270 acres near Elliot and Meridian roads that is to be annexed by Apache Junction. The land was appraised at $68 million and attracted 118 bids. Horton won the winning bid 鈥� $245.5 鈥� more than three times the appraisal amount.

-D.R. Horton also was the winning bidder in the of 269 acres north of Desert Ridge near 56th Street and Deer Valley Parkway in an area known as Rawhide Wash. The home builder purchased the property for $79 million. 

-Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, purchased of land in the Northwest Valley north of Glendale near the I-17 freeway and Loop 303 known as Biscuit Flats for a manufacturing facility. The property is adjacent to a 3,500 zoning bank targeted mostly for housing. 

-Axon Enterprise, Inc., a law enforcement and military technology company headquartered in Scottsdale, was the successful bidder of 73.5 acres of land near Hayden Road and Loop 101 in Scottsdale. Axon submitted the winning bid of $49.1 million for the property for a new state-of-the art headquarters. 

Upcoming auctions

Perry also mentioned several including: 

-A 370-acrein Ahwatukee along Chandler Blvd. has been appraised at $105 million. 

-Much needed housing in Tucson is the focus of 184 acres near Valencia and Houghton roads in Tucson. It is appraised at $14.5 million.

-A mountainous 417 acres near Jomax Road and Cave Creek roads targeted for residential use is appraised at $83 million. 

-A total 162 acres for industrial development near Warner Road and the 202 freeway is awaiting appraisal. 

-About 50 acres near 64th Street and Mayo Blvd. The appraisal is pending. 

Every acre has a beneficiary 

State trust land was granted to Arizona by the federal government in preparation for statehood in 1912. Arizona is one of 21 states that manage a total 500 million acres. 

Every acre is held in trust and managed by the Land Department for the sole purpose of generating revenues for 13 beneficiaries. Beneficiaries receive designated payments generated from the sale of trust property, interest on the property loans, leases and fees. 

Arizona鈥檚 K-12 schools are the top beneficiary, receiving about 80 to 85 percent of monetary benefits from the sale and lease of trust parcels. Approximately 8 million acres of trust property is designated for K-12 public education.

Other beneficiaries are the state鈥檚 three public universities, the Arizona School for the Deaf and the Blind; the state legislative, executive and judicial buildings; the Arizona State Hospital in Phoenix; the Arizona Pioneers鈥� Home in Prescott; the Arizona Department of Juvenile Corrections; and the Arizona Department of Corrections. 

鈥淭hat鈥檚 why we all get up and come to work 鈥攖o help our beneficiaries. Our mission is number one to us,鈥� Perry said. 

To read more about the agency, visit:

To view upcoming auctions of state land, visit:

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A ballot initiative to raise income taxes on certain taxpayers and small businesses is 鈥減oorly conceived鈥� and 鈥渨ill not create a sustainable source of funding that is worth the economic malady it will cause鈥� according to a new analysis by a tax watchdog group.

The report by the Arizona Tax Research Association examines Arizona鈥檚 journey from a comparatively high-tax state in the 1990s to one that is more competitive today regionally and nationally and the effect the initiative鈥檚 passage could have on the state鈥檚 prospects for future economic growth.

The report finds that despite Arizona reducing individual income tax rates by 36% since the 1990s, the individual income tax produces far more revenue today than it did in 1991 when adjusted for inflation.

鈥淎djusted for inflation, Arizona鈥檚 individual income tax rate is bringing in 185% more revenue today than it was back in the 90s when the highest rate was 7%,鈥� ATRA Senior Research Analyst Sean McCarthy and the paper鈥檚 author said. 鈥淭he proponents of the tax increase want to establish a new 8% tax bracket, which is 77% higher than the current top rate. We know from history, however, that doing so risks undermining the ability to attract new taxpayers and investment to Arizona.鈥�

The paper cites data indicating that high-wage earners have sought out Arizona as a destination as the state鈥檚 tax code has become more attractive.

Between 1991 and today, tax filers with an annual adjusted gross income greater than $500,000 grew nearly 400%. Those filers are now responsible for more than $1 billion in state revenues.

McCarthy rejects the notion that high earners would still choose Arizona if income tax rates were to spike.

鈥淲e hear often that New York and California have lots of millionaires despite having high tax rates and that Arizona can do the same,鈥� McCarthy says. 鈥淭hat ignores certain inherent factors those states have that Arizona simply doesn鈥檛. People can move around. Arizona has been a net importer of new residents and tax filers from high-tax states, but that can all change if we join the top-10 list of states with the highest income tax rates.鈥�

Small businesses that are organized as pass-through entities, like partnerships or S Corps, pay their taxes on the individual tax code and will be affected by the proposed tax increase. Citing IRS data, the ATRA report says more than a quarter of Arizona business filers and a large percentage of Arizona鈥檚 revenue will be impacted by the increase.

鈥淏usinesses make decisions on a number of factors, but a state鈥檚 tax environment is near the top of the list,鈥� McCarthy said. 鈥淚f increased hiring, expansions, and new investments don鈥檛 pencil out on a spreadsheet because of a higher tax burden, then Arizona鈥檚 economic growth is likely to be severely slowed.鈥�

The paper takes issue with the claim by proponents that Arizona鈥檚 K-12 education system will benefit from the tax increase.

鈥淭he entire premise of this proposal is incredibly cynical. The proponents aren鈥檛 shooting straight with teachers,鈥� McCarthy said. 鈥淣ot only is the revenue that will come from this tax highly volatile and highly unlikely to deliver what the proponents are promising, but the dollars won鈥檛 even go to base K-12 funding.鈥�

McCarthy says advocates for increased education funding would be better served to support policies that will encourage more robust economic growth and, as a result, generate more available resources for the Legislature and governor to appropriate to schools and teacher salaries.

鈥淟awmakers and the governor have demonstrated that they鈥檙e ready and willing to devote more dollars to the education system when the resources are available,鈥� McCarthy said. 鈥淭his initiative won鈥檛 even deliver for teachers the dollars that the 20×2020 teacher pay raise plan and the restoration of additional assistance funds have, but it will certainly create a drag on economic growth.鈥�

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