PHOENIX (AP) — The Arizona Supreme Court has agreed to review a lower court’s ruling that upheld a Phoenix suburb’s payment of $2.6 million to a private Indiana university to open a branch site in the city.
The justices said Wednesday they’ll consider the Arizona Court of Appeals’ finding that Huntington University’s promise to Peoria to invest in the university’s own business was adequate consideration under an Arizona Constitution provision prohibiting public subsidies to private entities without a direct public benefit.
The case brought by taxpayers who challenged the incentive arrangement also involves a commercial real estate firm’s renovation of its own property for its own private profit.
A divided Court of Appeals panel in January upheld a Tax Court judge’s ruling that Peoria’s payments to Huntington University and Arrowhead Equities didn’t violate the Constitution’s Gift Clause.
The appeals court said the expenditures were for a public purpose and that taxpayers challenging the incentives didn’t prove the benefits to Peoria were inadequate when compared against the value of the incentives.