by admin | Nov 7, 2019 | News and Updates, Tax
The Joint Budget Legislative
Committee released their October
Fiscal Update, and it was more good news for the state budget
coffers. September tax receipts were $120 Million above the adopted budget
forecast, an 8.7% increase over the prior year. The explosion in tax revenue
has led JLBC to conclude that the state will finish with at least a $700
Million dollar budget surplus for FY 2020.
A large chunk of the surplus
revenue rolled in at the end of 2019 fiscal year, coinciding with a surge in
individual and corporate income tax filings that occurred in May and June after
the approval of the state budget.
The explosion in revenue didn’t
shock anyone following the income tax conformity debate at the legislature over
the last 18 months. Arizona was one of the last states to conform with the Federal
Tax Cuts and Jobs Act passed in 2017, leaving taxpayers in a
lurch on what tax laws to follow and forms to use. So, both individuals and
corporate entities waited until conformity legislation was passed to then file
with the state.
While JLBC stresses caution on
the current revenue projections, it is hard not to see that a chunk of this
surplus is the result of continued overcollection from the conformity tax
increase. During negotiations on a proposed conformity fix, the legislature and
Governor Ducey chose to adopt the low-end revenue estimate from the conformity
tax hike.
The agreed upon package settled
on an anticipated $220 million tax increase even though the Department of
Revenue estimated it could be well north of $300 million in FY 2020. Though no
one faults them for their cautious approach, it is now looking like the higher
figure was much closer to the mark.
This isn’t the only tax change
that will likely result in taxpayers paying more than expected to the state.
The budget also included a new sales
tax for online purchases, which went into effect over the summer. The
revenue estimate included in the budget for the implementation of the online
sales tax was $85 million annually, which was then offset by the legislature
with a corresponding reduction of the income tax.
At the time a lot of skepticism
surrounded the $85 million figure. Some groups, including the Arizona Tax
Research Association, analyzed the data and believe that the revenue from
taxing online sales could be
closer to $300 million. It is still early, but based on the fact
that every revenue projection is overperforming JLBC estimates, the higher figure
will likely prove more accurate.
What does this mean for
taxpayers? It means that they are still overpaying (and experiencing a tax
hike) even with the passage of a conformity package that attempted to hold
filers harmless last spring.
In order to address the
overcollection, the responsible solution is for lawmakers to work toward
returning a portion of the $700 million surplus back to hardworking taxpayers.
The spending lobby, media and political establishment won’t like this, but it
is the right thing to do. Plus, the gusher in new revenue is so large that
other priorities can be additionally funded while implementing rate reductions.
Interestingly, some Republicans
have expressed fear of political backlash if it appears that they are cutting
taxes. Setting aside the fact that
voters generally like having their money returned to them in years when there
is a large budget surplus, there is not a single politician in the state that
will be able to dodge the issue of tax cuts in 2020.
President Trump will be at the
top of ticket, and his signature achievement is the passage of the Tax Cuts and
Jobs Act in his first term. It is very likely that he will be running on a plan
for a second round of tax cuts if he is reelected. Unless every member of the
GOP intends to disassociate themselves from Trump and his 2nd term
agenda, this is the horse they will be riding with next November.
Republicans will have a choice:
run away from the idea of cutting taxes to address the overcollection of revenue
or try going on the offensive by promoting a low tax, pro-growth agenda. We
will see soon enough which path they choose.
by admin | Oct 31, 2019 | Misc, News and Updates
After failing last year to
qualify a measure forcing disclosure of contributions to non-profit
organizations and eliminating donor privacy, Terry Goddard is back peddling a revised
iteration of “Outlaw Dirty Money.” This
time dubbed “The Voters Right to Know Amendment,” the proposal would change the
Arizona Constitution to require the disclosure of the “original source” of all
major contributions used to “influence Arizona elections.”
Major contributions are defined
as $5,000 or more in a single campaign, $20,000 for statewide campaigns or
$10,000 for all other campaigns in an election cycle.
The issue is easy to speak to on
a superficial level – convincing voters they have “a right” to know who is
spending in elections sounds appealing to people on the left and the right of
the political spectrum. However, lying
just below the surface are insidious motivations and consequences.
Coerced disclosure
Encourages Government Corruption
Predating the drumbeat for
private non-profits to publicly out the individuals who support them, there has
existed extensive campaign finance laws aimed to disclose the financial support
candidates receive who are running for public office. Money candidates directly receive is treated
differently than organizations because elected officials who are a part of the
government have a duty to reveal potential financial conflicts of
interest. More importantly, laws already
exist against corruption such as quid pro quos, bribes, and financial
fraud. These are the appropriate laws
that keep politicians honest. These are
the laws that effectively weeded out 7 Arizona lawmakers in the infamous
1991 AZSCAM scandal.
In contrast, individuals freely
and privately associating with organizations that share their common beliefs and
want to share their views with voters is not corruption. It is free
speech.
And protecting this right is
important given the track record of harassment and intimidation directed toward
individuals attempting to exercise their 1st amendment rights. This isn’t a theoretical argument; there are several
documented cases of private citizens being targeted for supporting a cause
or organization. One such example
occurred 61 years ago under National
Association for the Advancement of Colored People (NAACP) vs the State of
Alabama. In this case the state
was arguing they had “a right” to the membership list of the NAACP to determine
if the organization was doing business in the state. In the tumultuous throws of segregation, the
true purpose was for the government to create an “enemies list” of financial
contributors by which they could exert their coercive power and intimidate
members into abandoning the cause.
More recently, in 2015 the Wisconsin
Supreme Court ruled in favor of protecting every citizens’ First
Amendment right by determining a three year investigation by the state into
conservative groups was illegal. In the
commonly dubbed “John Doe” investigation, government regulators gnashing for
names of their political enemies actually ambushed non-profit leaders in the
early dawn hours at their homes, crashing into rooms where children slept in an
effort to find donor lists.
This is why transparency is only
a virtue when applied to government and privacy is a virtue when applied to
citizens. That’s why public record
laws only apply to government and not private citizens. Though the proponents of Goddard’s proposal
strive to confuse voters with seedy sounding language like “dark money,” they
cannot point to a single instance where knowing which individuals support what
political speech led to the uncovering of a violation of law or “corruption”.
HOWEVER, there are masses of real-life examples of similar disclosure laws
being used to attack, intimidate, and compel private citizens.
Goddard’s Initiative
Doesn’t Know What Laundering Means
Lastly, the “Voters Right to Know
Amendment” falsely equivocates laundering with the innocent and lawful act of
individuals giving money to non-profits and organizations with which they
align. As an attorney, Goddard should
know money laundering (which rightfully so is already a crime), involves
concealing money obtained illegally by transferring it through
legitimate businesses. This is an attempt by Goddard to implicate honest
individuals with a constitutional right to spend their money however they like
without the scrutiny of government. Imagining
every private citizen donor as a potential criminal with nefarious intentions
is just wrong. Not to mention
criminalizing anonymous speech is a perversion of justice – there are no
victims in non-disclosure– only victims when the right to privacy is violated.
At the end of the day, initiative’s
like Goddard’s are a dangerous threat to every citizen’s right to privacy, free
speech and association. It concentrates
more power into the hands of the government and erodes some of our most basic
democratic principles. Proponents have
flimsy intellectual arguments and catchy rhetoric – but behind them is
government target list and a loaded gun.
Hopefully, their third attempt to fool voters is equally
unsuccessful.
by admin | Oct 18, 2019 | Elections, Misc, Uncategorized
Participating in our electoral process is one of our most precious
rights, which is why the Arizona Free Enterprise Club is asking Arizona residents
to get involved and register to vote!
Registering to vote in Arizona is easy and can be done
online and in just a few minutes. Visit https://servicearizona.com/voterRegistration
and fill out the form and your registration will be processed electronically.
As a reminder, anyone that has moved must update their
information in order to be properly registered and eligible to vote. This can
be done online as well.
Thank you for doing your part and serving your country!
For more information visit https://azsos.gov/elections/voting-election
by admin | Oct 17, 2019 | Misc, News and Updates
The City of Phoenix is addicted to wasting millions of dollars on
antiquated train systems. So much so
that they are constantly looking for more people to subsidize the ever-growing
and inevitable rising costs.
Their new target? Phoenix
Sky Harbor patrons who Uber or Lyft to the airport.
Even though ridesharers have absolutely no need to take the Sky
Train at Sky Harbor, that hasn’t stopped city officials from implementing a 200 percent increase on the current $2.66
fee for them to pick up and drop off passengers.
Under the current proposal the Phoenix Council voted on October 16th,
passengers would see a $10 round trip cost increase by 2024, making Phoenix one
of the costliest airports in the country for residents to rideshare.
A fee to cover the rideshare companies’ impact on roads and curbs
is understandable. However, forcing
their customers to subsidize a train they don’t use is little more than social
engineering. Currently, many people find
it more affordable to uber to the airport than to park their car. The real goal of this policy: force people to
use the train by making the alternative less economically desirable. Afterall, if the issue was equity as argued
by proponents, elected leaders would require a fee on users of the Sky Train
not the ridesharers. Additionally,
rideshare patrons will get a discount off their fee if they use the Sky Train
to the 44th St Station.
Just like downtown Phoenix light rail, city officials are
constantly looking for creative ways to force people onto their trains to make
the millions they waste on a system people barely use look less like a
boondoggle.
by admin | Oct 3, 2019 | Elections, News and Updates
After the Arizona Free Enterprise
Club successfully advocated for initiative reform to crack down on circulator
fraud and abuse, groups have been manically organizing to file their ballot
initiatives before the new
law
took effect August 27th 2019.
Just eking in on August 26th
was an initiative funded by California big-union Service Employees
International Union-United Healthcare Workers (SEIU-UHW). SEIU is best known in Arizona for picketing
at hospitals as well as their failed attempt to qualify a ballot initiative in
2016 to cap hospital executives’ pay. The
political group formed to push the effort is “Healthcare Rising Arizona” which is
perhaps fitting considering the inevitable rising costs the passage of this
initiative would cause.
The unions plan to sell the
measure to voters by codifying in Arizona statute provisions of Obamacare that
prohibit discrimination based upon pre-existing conditions. Additionally, it would
address ‘surprise billing’ by prohibiting hospitals and ambulance services from
charging an out-of-network patient above what their in-network cost sharing is,
and mandates specified reimbursement rates for insurers to pay facilities,
ambulances and providers.
The reality is that protections
for pre-existing conditions and ‘surprise billing’ already exist in Arizona. In fact, two years ago Arizona lawmakers passed
legislation to create a dispute process for consumers who
receive a surprise bill.
So why would a California labor
union spend millions to run a campaign in Arizona to pass laws that already
exist?
The answer is the immediate 5
percent pay raise for all direct care hospital workers (including nurses,
janitorial staff and food prep staff) that would go into effect upon
passage. Although the proponents admit
these would be substantial costs that would likely be passed onto patients, it
is a convenient way to set the stage to put Big Union bosses in charge of wages
and benefits negotiations. Furthermore,
no data suggests that hospital workers are under paid; especially in Arizona
where cost of living is affordable.
Finally, the initiative would
increase regulatory burdens on private hospitals and require the Arizona Department
of Health Services to levy major fines for falling short. Increased red tape means higher
administrative costs getting passed on to the consumer.
If Americans and especially
Arizonans have learned anything from Obamacare it is that government intrusion
into healthcare complicates the system, increases costs, and decreases
choice.
Although there is still plenty of
time for proponents to collect signatures for the 2020 ballot, they won’t have
to comply with new commonsense requirements to qualify circulators and ensure
they’re not felons. It is likely
therefore that bad actors and paid union members will flood the streets for the
237,000 required signatures. Hopefully
voters will have a healthy sense of skepticism when approached with another
big-government solution to their healthcare.
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