by admin | 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.
by admin | 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.
by admin | Jul 30, 2019 | Misc, News and Updates
It is no secret that Arizona
Superintendent of Public Instruction Kathy Hoffman is no fan of the Empowerment
Scholarship Account (ESA) program. Throughout the 2018 campaign season, Hoffman
was on record taking hostile positions against the school choice program.
Now she has allowed her personal
biases to harm children and skirt the law.
Arizona law defines the criteria
for children who qualify for the ESA program as well as outlines the process by
which the Department of Education must administer the program – including a 45-day
deadline for processing applications.
With several ESA families in
recent months shedding light on their own mistreatment by the department, it is
unclear how many of the over 5,000 children have fallen victim to the Hoffman
bias.
Just last spring a group of
students on the Navajo Reservation were found to be using their ESA funds to
attend a school in the state of New Mexico.
With nothing but poor failing schools in proximity to the children, the
NM school was the only viable educational option. Instead of seeking a remedy to the issue, these
families were being expected to pay back thousands of dollars to the state. Luckily the Governor’s office and the
legislature passed a one-year fix for the native American families.
Only a couple months after this
debacle, a
military family was denied eligibility, citing the stepmom who was the
active military person, was not the child’s real mother. Despite the biological mom being deceased and
the veteran stepmom having legal guardianship.
After a firestorm of criticism followed, Hoffman’s administration reversed
the decision. This was more than shoddy
legal interpretation of the statutory eligibility – this was prejudicial.
Most recently still, a Gilbert mom of a child with specific
learning disabilities has called out the department of their willful incompetence
after spending much of the summer on hold for hours and never receiving a
response. Even after this mom and her
son confronted Hoffman at an ADE meeting, requesting a phone call back, a month
later no phone call was received. This family
has been apart of the program for 5 years and has never had trouble in the past
with communication.
This last issue was the straw that broke the camel’s back, leading GOP lawmaker Mark Finchem (LD 11) to file a complaint with the Arizona Attorney General’s office requesting they investigate the department’s mishandling of ESA applications and failing to process them within the 45-day window.
It seems nothing will overshadow
Superintendent Hoffman’s bias toward the ESA program. Not the law. Not children in vulnerable rural
reservations. Not children of our military. Not children with learning disabilities.
For the sake of these families
who rely on the ESA program to access the educational options that serve their
children best – the legislature would be wise to remove the program from her
administration. After all, if Hoffman
can’t and won’t administer the statutory program impartially and in full
service to Arizona families – someone else should.
by admin | Jul 17, 2019 | Misc, News and Updates
Today the Arizona Free Enterprise
Club has released a study examining the speculative claims made by Valley Metro
that light rail has spurred $11 Billion in economic development.
Authored by transportation
policy expert Randal O’Toole, “Valley Metro Light Rail
Economic Development Claims Fall Flat” examines the 344 developments the
transit agency cites as economic development attributable to light rail.
The
report shows that the vast majority of these projects would have happened
anyway, happened only because they were subsidized or were government buildings
and that the cost of rail construction exceeded any actual economic development
created by light rail.
There
are several examples of projects cited in Valley Metro’s economic development report
that have no reasonable connection to light rail, including:
- Two QuikTrip Gas
Stations
- A Car Wash
- The Tesla Car Dealership
- Several Parking Garages
- Maricopa County Sheriff
Headquarters
- The Phoenix Police
Forensic Lab
- The Arizona Department
of Child Safety Building
- Renovations at Manzanita
Hall and other ASU student Housing
- The Renovations at the
Memorial Union
Valley
metro included billions worth of projects that were heavily subsidized, were
government funded, or were more than ½ mile from a light rail stop:
- 85
projects worth $3.8 Billion received a subsidy–either a GPLET (Government
Property Lease Excise Tax) property tax abatement, a lease-back of ASU property
which advantaged the property with a property tax abatement, affordable housing
tax credits, or another type of subsidy;
- 46
projects worth $2.1 Billion were government buildings;
- 46
projects worth $2.7 Billion were Arizona State University buildings such as the
remodeling of Sun Devil Stadium;
- 17
projects worth $317 Million that were located more than a half mile from the
light rail station and 2 projects worth $61 Million of developments built
before light rail was.
“After
removing these unrelated and subsidized projects, what you are left with is
less than $2 Billion of development that likely would have been built anyways,”
said Aimee Yentes, Vice President of the Arizona Free Enterprise Club. She continued, “furthermore, light rail has
cost taxpayers over $2 Billion to build and nowhere in Valley Metro’s analysis
do they include the detrimental effects light rail construction has had in
displacing or shuttering small businesses along the construction of the
line. The juice just hasn’t been worth
the squeeze.”
“Virtually every project on Valley Metro’s
list would have been built somewhere in the Phoenix metropolitan area without
light rail,” says Randal O’Toole the study’s author. “In fact, considering light rail fares only
cover 28 percent of the costs of operations and maintenance, it is hard to
classify light rail as a ‘productive investment’.”
The full
study can be accessed HERE.
by admin | Jul 11, 2019 | Elections, News and Updates
Yesterday when the City of
Phoenix and Valley Metro announced that they had received a grant from the
Federal Transit Administration (FTA) for the South Phoenix light rail extension,
they did not disclose to taxpayers that the projected cost to build the line
has nearly DOUBLED—from $700 million to $1.35 Billion dollars. At $245 Million per mile, the South Phoenix
line is now one of the most expensive light rail extensions in the country.
“It is amazing that no one in
City Hall or Valley Metro notified the public of these rampant cost overruns,”
said Scot Mussi, President of the Arizona Free Enterprise Club. “The scariest
part for taxpayers is that they haven’t even broke ground on the project, so
the price tag will likely go even higher before they are finished.”
To pay for the ballooning cost of
the extension, Phoenix taxpayers are on the hook for $540 million, up from $195
million in 2018. “Neither Phoenix or Valley Metro have explained how they are
going to pay for this, or what happens when the cost goes even higher,” Mussi
Continued. “Taxpayers have a right to know what roadway projects will be
cancelled to fund this boondoggle.”
This isn’t the first time Valley
Metro has been forced to revise the projected cost for the South Phoenix
extension. In November of 2015, Valley Metro estimated the capitol cost for the
project to be no more than $530 Million Dollars.
In August, Phoenix residents will
have the opportunity to vote on Proposition 105, which would stop the expansion
of the South Phoenix line and divert those funds to other needed roadway and
transportation improvements. “With light rail costs spiraling out of control,
voters would be wise to stop the bleeding before it is too late.” Mussi said.
The 2015 cost estimate for the South Phoenix project can be viewed HERE. The most recent cost estimate for the South Phoenix project can be viewed HERE.
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