PHOENIX — It may provide small comfort. But a new study shows that Arizonans pay proportionately less of their incomes t support state and local governments than residents of most other states.

 The report by Tax Foundation finds that the average stat resident pays 8.5 percent of earnings in state and local taxes.

 That compares with a nationwide average of 9.7 percent.

 It also puts Arizona 41st out of all 50 states — a sharp change from three decades ago when the state ranked 17th.

 The method of calculating that relative tax burden even gets the cautious endorsement of the Goldwater Institute which often finds itself in the forefront of complaints about the size and cost of government in Arizona. The organization’s web site even keeps a running tab of state spending at $885 a second.

 Byron Schlomach, who directs the Goldwater Institute’s Center for Economic Prosperity, said the methodology used by the Tax Foundation appears sound. And he said it does show the relative burden of government based on the personal income of each state’s residents.

 Schlomach said, though, that doesn’t mean that governments still aren’t spending more than they should.

 He also has a specific bone to pick over the way the taxes are raised, a system he said may be great for retirees but lousy for attracting businesses and the high-paying jobs they bring.

 Gerald Prante, senior economist at the Tax Foundation, said the relative tax burdens of all the states are mostly close to each other.

 ``This is logical because state and local governments fund similar activities: public education, transportation, prison systems, health programs, etc., often under the same federal mandates,’’ his report says.

 But there are differences. Prante found that residents of Ne Jersey, New York and Connecticut all paid more than 11 percent of income to keep government operating.

 At the other extreme is Alaska at 6.5 percent, whose residents actually get a check every year in oil royalties. And Prant found that the three other states at the bottom also had large outside sources of income to pay for government: oil and mineral royalties in Wyoming and tourism in Nevada and Florida.

 Schlomach said, though, the report presumes all that spending in each state is necessary.

 ``It is arguable what level of services is optimal and whether or not government, regardless of where it is, should be doing all that it’s doing today,’’ he said.

 ``We do have something to be proud of in terms of our overall government burden,’’ Schlomach continued. ``But that doesn’t mean there aren’t improvements to be had.’’

 Schlomach said what’s missing from the Tax Foundation Report i an analysis of who pays the taxes. And a central point on that i how much more business pays, proportionately, that residents i property taxes.

 Arizona sets the value of most properties at what is supposed t be market value, what a willing buyer would pay a willing seller.

 But the state then sets the assessed value — the amount against which taxes are levied — at 10 percent for residential property.

 Business property had been assessed at 25 percent. That is being reduced but still will end up at 20 percent.

 On top of that, businesses pay taxes not only on land an buildings, like residential structures, but also on ``persona property’’ ranging from manufacturing equipment to file cabinets.

 A similar levy for residents was wiped out decades ago.

 And the flat corporate income tax rate of just under 7 percent is higher than even the highest individual income tax rate of 4.54 percent.

 ``So we’re a good destination for retirees,’’ Schlomach said. And that, in turn, creates various jobs in the service industry.

 Schlomach said, though, the state needs a more balanced economy.

 And that means attracting and keeping other kinds of businesses.

 ``When it comes to industrial jobs or anything like that we’re not as competitive,’’ he said.

 He said lawmakers are aware of that problem, which is why they have approved a number of provisions in the law to give special tax breaks to some companies. These include creation of foreign trade and enterprise zones, where taxes are lower.

 Those zones have been heavily criticized by Kevin McCarthy, president of the Arizona Tax Research Association. He said the continued use of what he believes are gimmicks only divert attention from the real need to revamp the entire tax code to remove the disparities.