Arizona’s Movie Tax Credit Bill Is a Major Loss for Taxpayers

Arizona’s Movie Tax Credit Bill Is a Major Loss for Taxpayers

If you like forking over your hard-earned dollars to woke Hollywood liberals, Arizona lawmakers have you covered.

Last month, the state legislature took on the role of “Minions” for the film industry. As you may recall, the Club previously fought against a movie tax credit bill known as SB1708. After passing the Senate, it failed in the House. But in a shady move, Senate Appropriations Chairman David Gowan resurrected the effort through a strike-everything amendment to HB2156, declaring that Hollywood subsidies were his top issue in budget negotiations and any budget agreement was contingent on its passage. A few days later, the bill passed when a handful of Republicans joined every Democrat to support it. Governor Ducey allowed the bill to become law without his signature on July 6th.

The legislation itself gives movie companies that film in Arizona refundable tax credit subsidies up to 15 percent if they spend up to $10 million in production costs, 17.5 percent if they spend between $10 million and $35 million, and 20 percent if they spend over $35 million. And it gives the opportunity for an additional 2.5 percent if the movie company meets other criteria.

But consider this. The average cost of making a movie is between $100 million and $150 million. That means the vast majority of movie companies will benefit from the highest possible percentage!

So, how much Hollywood corporate welfare will Arizona taxpayers be on the hook for?

    • $75 million in 2023
    • $100 million in 2024
    • And $125 million in 2025 and each year thereafter

Can you believe it? In the midst of historic inflation and a struggling economy, our lawmakers decided it was a good idea to send your money to a billion-dollar industry that doesn’t even need it! (Not even Maverick can save this disaster.)

Those that argued in favor of this bill claim that it will promote workforce development and expansion of the movie industry. But they must have missed the recent study of Hollywood subsidies in New York, Louisiana, Georgia, Connecticut, and Massachusetts. (Or maybe they’re living in “La La Land.”) It found that despite $10 billion in taxpayer spending, there was no statistically significant impact on employment.

That’s right. These programs don’t work. They consistently lose money, and the Joint Legislative Budget Committee already projected that this bill would cost the State of Arizona hundreds of millions of dollars!

On top of all this, the legislation is likely unconstitutional, and litigation is inevitable. The Arizona Supreme Court ruled in 2021 that the government cannot include “anticipated indirect benefits” such as projected sales and tax revenue as part of the consideration with a private party under the Gift Clause in the Arizona Constitution. In other words, Hollywood dazzling lawmakers with projected economic development leading to increased tax revenue is an “irrelevant indirect benefit” that can’t be included in the consideration.

But perhaps worst of all, we can now expect to see our tax dollars being used to create movies bashing America and our values. That’s become Hollywood’s specialty in recent years. And now because of this bill, it will all be done with the State of Arizona serving as the backdrop.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

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Transit Tax Increase Earned a Well-Deserved Veto

Transit Tax Increase Earned a Well-Deserved Veto

Governor Ducey made the right decision vetoing HB2685, the Maricopa County transportation sales tax increase that was forced through the House and Senate during the final days of the legislative session.

But the reality is, it never should have gotten to his desk.

HB 2685 typified everything that is broken at the Capitol these days: a swampy political culture built around cronyism and backroom deals, legislative leadership pushing major policy through despite overwhelming opposition from their own caucus, and a complete breakdown in statesmanship, evident by the fact that most Republican lawmakers that supported the bill never actually read it or the MAG transportation plan that underpinned the legislation.

It is highly unlikely that a bill like this would have even received a committee hearing five years ago. HB 2685 completely rewrote transportation policy for Maricopa County, shifting billions away from roads and into transit and a regional program slush fund. Yet the bill was rammed through the process from beginning to end, with advocates taking the arrogant position that no real changes could be made to the bill.

Thankfully, Governor Ducey didn’t go along with this charade. He rejected their absurd “take it or leave it” offer and plan, and outlined in his veto letter the multiple problems with HB 2685:

    • The bill lacked transparency and was in fact intentionally misleading. They doubled down on putting their thumb on the scale by requiring the election be held in the Spring in an off-year election cycle when voter turnout is historically low.
    • The bill decreased funding for freeways.
    • The bill did not capture needed projects, some of which had to be appropriated directly by the legislature in a $1B transportation infrastructure package.
    • The transportation tax does not expire until the end of 2025; so, there is no reason to extend the tax now, especially during a time of record inflation when taxpayers are hurting.

Our organization and others opposed to the bill brought up every single one of these points and several others. Each concern was summarily ignored, claimed to be a lie, or turned into hostile gaslighting and ad hominem attacks against opponents of the bill. Proponents took our fact sheet and disseminated a “struck through” version which did not even attempt to counter our information or provide alternative sources. Lawmakers and proponents actively shared explicitly inaccurate information about a bill they purportedly drafted. These bad facts would spread like wildfire at the Capitol, even though they could be easily resolved by simply reading the bill (which again, most lawmakers that supported the bill did not do).

HB2685 was truly Build Back Broke transportation policy, prioritizing money for little-used transit, siphoning dollars from roads for cities to expand bike lanes and trollies, and neglecting the maintenance for freeways and arterials. This was reflected in the lack of support by a majority of Republicans in both chambers, with 21 of 31 Republicans in the House voting against the transit tax.

Yet Republican leadership and the sponsors of the bills did not seem to care they were passing Democrat transportation policy. This as the backdrop of Biden’s Build Back Broke money and policies enraged Republicans across the country. This, as progressive leftists across the state praised the measure.

None of this was normal, and it should be a lesson.

Things are broken at the Capitol, and they are due for a shake-up. And even though the transit tax increase bill should never have made it in its final version to the Governor’s desk, perhaps its veto will be the beginning of better transportation policy to come. It’s hard seeing it get any worse.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

Join our FREE Grassroots Action List to stay up to date on the latest battles against big government and how YOU can help influence crucial bills at the Arizona State Legislature.

Free Enterprise Club Files Legal Challenge against Radical Election Initiative

Free Enterprise Club Files Legal Challenge against Radical Election Initiative

Phoenix, AZ – The Arizona Free Enterprise Club filed a lawsuit on Friday to challenge the validity of a radical initiative that seeks to:

    • Upend Arizona’s election administration and voter registration laws.
    • Sharply reduce candidate contribution limits while channeling more taxpayer subsidies to so-called “Clean Elections” candidates.
    • Curtail safeguards governing the initiative and referendum process.
    • Impose new taxes.

The complaint contends that well over half of the signatures on the election initiative were gathered illegally. And it includes evidence of the illegally collected signatures along with proof that many of the initiative’s paid circulators provided false information or failed to register with the Secretary of State.

“After analyzing over 45,000 petition sheets and 420,000 signatures, it’s clear that well over half of the signatures on this election initiative were collected in violation of state law,” said Club President Scot Mussi. “That should be more than enough to invalidate this initiative.”

The complaint requests that the court disqualify any signatures collected illegally or by individuals who were not properly registered with the Secretary of State at the time the signatures were gathered. 

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

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Free Enterprise Club 2022 Legislative Scorecard Highlights Key Activist Priorities

Free Enterprise Club 2022 Legislative Scorecard Highlights Key Activist Priorities

The Club’s 2022 legislative scorecard (View House of Representatives Scorecard and Senate Scorecard) included a thorough review of 22 bills in the House and 30 bills in the Senate, legislative actions and votes taken by lawmakers this session with an emphasis on the Club’s supported or opposed bills. The methodology included other issues important to our grassroots activists such as good governance reforms, school choice and parental rights, fighting Green New Deal policies, and rejecting corporate welfare.

Issues weighed heavily in the scorecard included bills relating to income tax policy and election integrity, both of which were prime issues for the Club’s agenda for 2022.

Not all legislation was weighted equally but ranked by Club priority. Highly prioritized were bad policies such as the “Build Back Broke” agenda which included bills such as the Maricopa County sales tax increase referral to fund transit projects and other Green New Deal infrastructure projects, the Hollywood tax credit program and other refundable tax credit programs such as the Earned Income Tax Credit and the R&D Tax Credit, and the statewide sales tax increase referral for fire districts.

Club President Scot Mussi expounded, “Our organization was founded to fight for the taxpayer of Arizona. The ability of ‘woke’ corporations to secure major tax carveouts, in some instances zeroing out all tax liability, is a serious threat to a broad-based, low-tax environment for every Arizona family and small business. Our lawmakers shouldn’t be picking winners and losers but representing all Arizona taxpayers.”

Ultimately, several bills became the focus of these efforts and were included in the overall methodology. Here is a sampling of some of the bad bills that were weighed in the 2022 legislative scorecard:

    • SB1708: (motion picture production; tax credit) establishes a refundable tax credit program for businesses and individuals to produce films in Arizona.
    • SB1356: (transportation tax; election; Maricopa County) Referred to voters a half cent sales tax for 25 years to fund predominantly transit and other Green New Deal infrastructure projects in Maricopa County.
    • HB2862: (general appropriations act; 2022-2023) The “feed bill” which is the main appropriation bill for the budget. This year the Club scored this budget bill negatively as the budget turned into a Democrat spending spree with a 40% increase in spending from last year’s budget and was a part of a deal that included many of the “Build Back Broke” bills.
    • SB1018: (earned income; tax credit): Creates a state level refundable earned income tax credit.

Also included in the Club’s legislative priorities were several bills dealing with election integrity. Despite dozens of bills being introduced. these bills were top Club issues the entire session:

    • HB2492: (voter registration; verification; citizenship): bolster safeguards to ensure only legal citizens may register and vote in our elections.
    • HB2617: (voter registration; cancellations; causes): Creates a set of database check requirements for regular voter role maintenance.
    • SB1362: (early ballot on-site tabulation): Sets up a process for counties to allow voters to tabulate their mail-in ballots on election day.
    • SCR1012: (voter identification; voting): A referral to voters to requirement voter ID on mail-in ballots.

Given the rigorous criteria in the Club’s 2022 scorecard, the top performing legislators distinguished themselves as faithful conservatives in the caucus. These members consistently fight for limited government, free market principles, low, smart and fair taxes, and individual liberties. The Club Top performers in the Legislature who have earned an ‘A’ in 2022 included:

Senator Warren PetersenLD 12100%
Senator Michelle Ugenti-RitaLD 2393%
Senator Wendy RogersLD 691%
Rep. Jacqueline ParkerLD 16100%
Rep. Jake HoffmanLD 12100%
Rep. Joseph ChaplikLD 23100%
Rep. Neal CarterLD 8100%
Rep. Travis GranthamLD 12100%
Rep. Beverly PingerelliLD 21100%
Rep. Judy BurgesLD 1100%
Rep. Gail GriffinLD 1491%
Rep. Shawnna BolickLD 2090%
Rep. John FillmoreLD 1690%

You can download the methodology for the House and Senate scorecards here.

The Club also compiled a “term” scorecard which averages the scores from both the 2021 and the 2022 session.

You can view the 2021-2022 Legislative Term scorecard for the Arizona House here.

You can view the 2021-2022 Legislative Term scorecard for the Arizona Senate here.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

Join our FREE Grassroots Action List to stay up to date on the latest battles against big government and how YOU can help influence crucial bills at the Arizona State Legislature.

Lawsuits Against HB2492 Are Attacking a Commonsense Bill Backed by the Constitution

Lawsuits Against HB2492 Are Attacking a Commonsense Bill Backed by the Constitution

Last week, the Biden Administration officially filed a lawsuit against Arizona over HB2492, which bolsters safeguards to our voter registration process to require proof of citizenship ensuring only U.S. citizens are voting in our elections.

To many, it sounds absurd. Not HB2492, but the revelation that in Arizona, and in every state in the country, people are registering to vote and voting without ever providing proof of citizenship.

How many people are we talking about? In 2020, there were roughly 11,600 individuals in Arizona who voted in federal elections without ever having provide proof of citizenship. That’s up from under 2,000 just two years prior in the 2018 midterms. These numbers are alarming, but the exponential growth from just one election to the next is even more shocking. Currently, there are 13,330 active voters who have not provided proof of citizenship, more than 6,000 of which are on the Active Early Voter List (previously PEVL) in Maricopa County alone.

You can find out how this happened and how we went from rejecting all voter registration applications without (Documentary Proof of Citizenship) DPOC in 2005 to registering all individuals, whether they used our own state form or the federal form, as “Federal Only Voters” here.

Thankfully, back in March HB2492, sponsored by Representative Jake Hoffman, was signed into law. It was the first election integrity bill to pass out of the legislature, and the first signed. In short, HB2492 cracks down on state voter registration forms submitted without DPOC, requires counties to attempt to ascertain the citizenship status for those who utilize the federal form, and, importantly, makes proof of citizenship a requirement to vote by mail and to vote for President. A full breakdown of the bill can be found here.

This was one of the most critical and impactful election integrity reforms of the legislative session. And that can be seen from the two lawsuits filed within hours of it being signed, one coming from Democrat Russiagate hoax lawyer Marc Elias, and both on behalf of liberal nonprofit organizations. It becomes clearer from the third lawsuit filed last month from another leftist group, and now with this case, officially USA v. Arizona, coming from Biden.

These lawsuits all make nearly identical claims and arguments, all of which are flawed, because HB2492 is well crafted and stands on strong constitutional reasoning.

HB2492 requires counties to reject state voter registration forms that are submitted without proof of citizenship, which the U.S. Supreme Court affirmed our authority to do in Arizona v. Inter Tribal Council of Arizona, Inc.: “States retain the flexibility to design and use their own registration forms.”

HB2492 requires counties to reject federal voter registration forms if, after checking the various databases HB2492 requires them to review, they find that the person is not a U.S. citizen. Justice Scalia wrote that the NVRA “does not preclude States from ‘deny[ing] registration based on information in their possession establishing the applicant’s ineligibility.” So yet again, the U.S. Supreme Court affirmed our power to do this.

HB2492 makes proof of citizenship a requirement to vote for President and by mail in any election. The Electors Clause of the U.S. Constitution grants plenary authority to state legislatures over the manner of appointing presidential electors. While this argument has not been made to the courts, once again the plain text of the U.S. Constitution is consistent with the requirements of HB2492.

The misguided lawsuits also attack HB2492’s requirement to include place of birth on the registration form, oblivious to the fact that it is currently on the Arizona voter registration form, which was created by Democrat Secretary of State Katie Hobbs. Also ignoring that it was actually the Election Assistance Commission who recommended obtaining place of birth to help verify citizenship status.

The reality is that these are flawed lawsuits against a commonsense bill. Instead of wasting time and taxpayer dollars in court, the Biden administration should actually be securing our border, protecting states like ours from an invasion of illegal immigrants. Instead, they are trying to stop necessary election reforms that make it easy to vote and hard to cheat and protect our elections from the hundreds of thousands of people illegally crossing into our country each day under their watch.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

Join our FREE Grassroots Action List to stay up to date on the latest battles against big government and how YOU can help influence crucial bills at the Arizona State Legislature.