Proposal to Increase Property and Sales Taxes Would Derail Arizona’s Economic Boom

by | Aug 29, 2019 | News and Updates, Tax

Arizona’s economy has been on fire.  In just the last year the Grand Canyon state has created 75,000 jobs and Maricopa county leads the nation in population growth.

The state is more productive than ever too.  Arizona now ranks third fastest growing GDP in the country; outpacing heavy weights such as California, Florida and Texas.  Arizonans are enjoying a better standard of living as well with an over $61,000 median household income. 

This tremendous boom is a direct result of lawmaker’s decisions to keep tax burdens low and to create an environment where businesses can thrive. 

And yet the tax-and-spend lobby wants to squander this prosperity by reversing the very policies that got us here.

A group led by the Helios Foundation has unveiled a proposed measure that would impose a $1 Billion dollar property tax hike AND a $500 million dollar sales tax increase. It would be by far the largest property tax increase in Arizona history and be extremely punitive toward job creators in the state.

And just like its “Invest in Ed” predecessor, this tax hike is entirely unnecessary.  Due to pro-growth polices and historic federal tax reform, Arizona has enjoyed record tax revenues and budget surpluses the last two fiscal years.

Most of this surplus has been put toward education. In the last 18 months the legislature and Governor Ducey have pumped nearly $1.5 Billion in new spending into K-12 education, most of which has gone toward the ‘20by2020’ teacher pay plan, the continued restoration of district additional assistance, new school construction and results-based funding.  And even after all that spending there was enough left over to structurally balance the budget and leave $1 Billion in the rainy-day fund. 

Not surprisingly, none of this additional K-12 funding has satisfied the education spending lobby, which is why we are back at square one talking about another tax hike.  It doesn’t seem to matter that Arizona has been making tremendous gains in student performance over the last decade or that how you spend the money is far more important than how much is being spent.

Arizona is on the right path and changing course now would be a mistake.  That’s why taxpayers should be wary of proponents peddling major tax hikes claiming our schools are in shambles.  Instead, we should continue to grow and diversify our economy, invest in school choices that increase competition and improve educational outcomes, and demand higher standards.  Afterall, you get far more juice out of the economy by growing it – not by squeezing it. 

Pro-Light Rail Comedian Beclowns Himself in Attempt to Downplay Cost of South Phoenix Rail Project

by | Aug 21, 2019 | Misc, News and Updates

It has been interesting to watch supporters of light rail try to explain away its exploding cost and how projects such as the South Phoenix extension have turned into reckless boondoggles for taxpayers.

As has been reported by multiple news outlets, the cost for South Phoenix rail extension has tripled in three years to $1.35 Billion dollars. At $245 million per mile it is now one of the most expensive rail projects in the country. And with the Federal Government reducing their funding share to 39%, Phoenix taxpayers are now on the hook for an additional $400 million in cost overruns.

Now a little-known comedian named Hasan Minhaj has decided to enter the fray, putting out a short video attempting to demonstrate why light rail isn’t such a bad deal after all. In doing so he inadvertently provided more evidence on the absurd cost of the South Phoenix rail project and why other transit options (such as expanded bus, dial-a-ride, ridesharing, etc.) would make much more sense.

His first critique is that opponents to light rail have ignored their economic development benefits for the community. This is simply not true.

Maybe during his extensive research on the issue Mr. Minhaj missed the fact that our organization already looked into Valley Metro’s $11 Billion-dollar economic development claim and discovered that it was a sham. Virtually every project on their list was either government funded/subsidized or had nothing to do with light rail. Unless, that is, Mr. Minhaj wants to argue that QuikTrip gas stations, car washes, the Phoenix Police forensic lab, the Maricopa County Sheriff Office and a Tesla Auto Dealership were built because of light rail.

He then complains that our organization and others have messed up by overstating the actual costs of light rail. Using an uncited, non-existent transit “industry standard,” Mr. Minhaj declares that the true cost for the South Phoenix project is only $14 per rider. He arrives at this figure by calculating the number of projected boardings over the next 30 years (105 million) and divides that into the cost of the project.

One small problem: he confuses riders with ridership. These are not all unique individuals, unless Mr. Minhaj believes that the entire population of Arizona, California, Texas, Virginia and Florida all plan to visit South Phoenix and ride the light rail. Perhaps for educational reasons people will flock to the area to see how many small businesses light rail has bankrupted, but we doubt it.

Now Mr. Minhaj is correct that the projected daily boardings for the South Phoenix extension is 9,600. It is a figure that some light rail opponents have used to determine that it would be cheaper to buy every rider a Tesla than expand light rail ($1.35Billion ÷ 9,600 riders =$140,000). In reality they were being way too forgiving—since actual daily unique riders will be half that amount (around 5,000), the true cost is closer to $280,000 per rider. Forget Teslas, it would be cheaper to buy every rider a condo than build the South Phoenix extension.

This doesn’t mean that the $14-dollar figure Mr. Minhaj arrives at isn’t significant. Thanks to him, taxpayers now know that they will be paying at least $14 to move someone up to 5 miles in one direction on the light rail ($2.80 per mile).  Given that the average 5-mile uber/lyft ride is around $10, it would be cheaper to issue 100 million rideshare vouchers over the next 30 years than it is to build the South Phoenix project.

We give Hasan Minhaj credit for trying to inject some humor into the light rail debate. It is too bad that he assumes that opposition to costly light rail is only because of some deep seeded irrational hostility to transit or involves an evil Koch brother hiding behind every bush.

Light rail is simply too costly and will end up consuming the city’s transportation budget if expansion is not stopped. That doesn’t just mean canceled road repairs, but reduced bus and dial-a-ride service as well. There are better options available, and we intend to continue to advocate for transportation solutions that benefit all residents, not just the 1% of the population that use light rail.