Since 1994, when Arizona passed
legislation to allow students to “open enroll” in a district school outside
their boundary, families have been taking advantage of the power of school
choice.
Open enrollment’s popularity is
evident when you consider approximately half of Arizona kids do not attend
their designated district school. Of
these migrating students almost
half of them are choosing one district school over
another.
Recently, the Arizona
Republic wrote a story about hundreds of parents waiting in line for
up to 36 hours outside Sunnyslope High School with the hope of capturing a slot
for their child. The Glendale Union District operates on a ‘first come, first
register’ basis, and parents were not going to risk missing out on the
opportunity to get their kid into this high-ranking school.
This should be recognized for
what it is: evidence that school choice works.
No longer are children trapped in underperforming schools by virtue of
their zip code, parents are free to exercise their right to vote for their
preferred school with their feet, and schools are getting market feedback on
the quality of their product.
Yet, the AZ Republic gets the
narrative all wrong:
“Educational inequality continues in Arizona despite
a 2018 teacher strike that pushed Gov. Doug Ducey and the Legislature to
give educators a three-step, 20% raise that will conclude this year. Even with
tens of millions more in tax dollars going to Arizona public schools, the state
remains among the bottom five for educational funding.”
The implication being made is that parents are camping outside of Sunny Side high school to flee the Phoenix Union District because of lack of funding and “educational inequality”. This story proves exactly the opposite!
According to the state Auditor
General, Phoenix
Union High School District (PUSD) received $13,853 per student. If
Phoenix Union was its own state it would be #15 in
the country in per pupil funding. By any metric they do not
qualify as an “underfunded” district.
By contrast, Glendale Union receives $10,385 per student. Think about that: every parent lining at SunnySlope is willing to take $3,500 less to educate their child.
It’s easy see why parents are
willing to forfeit the extra funding after comparing the performance of the two
districts. According to the Arizona Department of Education, only 4 Schools
in Phoenix Union (28%) are rated an A or a B.
Six others are a C and four a D. State assessment scores corroborate
these ratings with only about 20 percent of PUSD students passing math, English
and science. Glendale scores double and
even triple these statistics when it comes to science testing.
You can’t blame demographics
either. Poverty rates are similar in both districts, and Phoenix has much
smaller class sizes (17.7) than Glendale (21.6). The bottom line is the
district that should have a distinct advantage is failing to compete. GUSD
is simply producing better academic results with less money. Families in the area are savvy enough to
understand this.
As for educational inequality,
the only unfairness that exists in this situation is an
entrenched school financing model that allows under-performing
districts to receive the more funding (and be rewarded for this failure) than
successful ones. Perhaps these parents should be able to take a portion of the
$3,500 they lose when they relocate. That would help address funding inequality
in a hurry. It could also go toward helping expand capacity in Glendale so that
parents don’t have to camp out for days in the hopes of providing their child
with a better education.
But don’t expect the education
establishment or their media enablers to support any real reform. Even when all
of the facts point toward the need to reward success and tying reforms to
funding, they will never abandon their ‘throw money at the problem’ narrative.
Strong hospital and insurance lobbies have long strived to block efforts in the state to give consumers more information about what health care services cost. Just last year, there was a bill at the legislature to require hospitals to provide the relative costs of services to a database that would allow consumers to discern high cost versus lower cost providers in the market and therefore make more informed decisions about their healthcare.
House Bill 2603 would have
been particularly helpful for businesses and organizations that are
self-insured and engineering their networks for employee insurance plans. Armed with even just the weighted average
payor rate and the annual rate of growth would have facilitated major shifts in
behavior by these more sophisticated insurance plan architects, forcing
premiums down over time and saving the end user money.
This bill was killed last
year by the healthcare lobby in the legislature.
Just a couple months after, President
Trump filed his executive order requiring Health and Human
Services set regulations requiring the disclosure of the secret rates insurers
pay hospitals. Since then his
administration has been promulgating
rules to prevent “surprise billing” as well as requiring
hospitals to share the discounts they give cash-paying patients.
This isn’t the only step
Trump has taken to administratively unwind the massive red tape of the
ACA. In
the summer of 2018, they loosened rules to allow for short term
health plans. A measure Republicans
rightfully codified
in Arizona in the 2019 legislative session.
What Trump understands that
Republican lawmakers should learn in Arizona – is without a repeal of Obamacare
– policymakers must find alternative ways to empower choice and
flexibility in the marketplace.
Without incremental changes
that put consumers in the drivers’ seat, the ratchet will only turn more toward
government run, single-payer healthcare, accompanied by the price controls and
rationed care that comes with it.
Luckily, Arizona lawmakers
will have an opportunity to redeem themselves next session when an updated
version of HB 2603 will be introduced. We will see once again who supports
price transparency and who will carry the water for the healthcare lobby.
With the 2020 elections
looming, healthcare is on the mind of voters.
Absent a major righting of the ship in the way of repealing Obamacare,
Republicans must provide market and consumer-driven solutions to lower costs
and increase choice and quality. The
President has the right idea. Hopefully lawmakers
in Arizona continue to follow his lead.
Here is an under-reported education fact: K-12 schools in Arizona have received over $1 Billion in new funding from the state over the last two years. This infusion of cash is the largest education spending increase in state history, boosting per pupil funding by 20 percent. Even adjusting for inflation, we are now back to the pre-recession funding levels for education last reached in 2008, which was the previous high water mark for K-12 spending by the state.
One
would hope that our policymakers are keeping close tabs on this massive
expansion of funding and scrutinizing how our tax dollars are being spent. Instead,
it appears that state lawmakers are preparing to skip this step and commit more
dollars to K-12, no questions asked.
Hopefully
this attitude will change with news that the largest school district in the
state decided to use their K-12 funding boost to go on an administration spending spree:
“Even
as teachers were canvassing neighborhoods, fighting to pass a budget override
in the state’s largest school district, new documents reveal Mesa Public
Schools Governing Board members were handing out hefty bonuses and spending
record amounts on administration in the district’s front office.
Budget
documents and memoranda obtained by ABC15 show the district’s administrative
spending soared more than 42 percent from 2018 to 2019, exceeding its own
budget by more than three-quarters of a million dollars.
The
new revelations about administrative spending come just a day after the governing
board voted to put Superintendent Ember Conley on administrative leave, signaling
it is parting ways with the district’s leader, who has only been on the job
since March of 2018. The board is expected to buy out the remainder of her
contract – a cost which is expected to exceed $500,000.”
A
large chunk of the payouts went toward bonuses to employees close to embattled
Superintendent Ember Conley. Twelve members of her executive team received
$22,500 bonuses, while several others had large amounts put into tax sheltered
annuities.
Adding
insult to injury is all of this largesse occurred behind the scenes while the
district actively pushed for more funding through a budget override. Voters in the East Valley are outraged
and one ex-school board member has filed a criminal complaint with the Attorney General’s office to
investigate the matter.
Taxpayers
deserve answers, but it’s unclear if they will ever get any. At last week’s district meeting, the Mesa
school board refused to discuss why Superintend Conley was placed on
leave, and provided no explanation as to why the district spending spree was
hidden from the public. They did, however, attempt to defend the payouts and
declared that exceeding the approved administration budget wasn’t really an
issue.
The
lack of candor isn’t surprising given the current political environment
surrounding K-12 funding. There is tremendous hubris among the education establishment,
based on the belief that policymakers are afraid to hold them accountable.
That
is how you end up with several education groups openly bickering on what tax hikes (sales, property,
income, all of the above?) to send to the ballot in 2020. It appears they have concluded
it is politically unnecessary to explain how the additional $20,000 per
classroom provided by the state has been spent or justify why a tax increase is
required given the news that Arizona has amassed a $500 Million (and growing)
budget surplus for next year.
The
only way this cycle ends is if Governor Ducey and the State Legislature send a
clear signal that future K-12 appropriations will be tied to results,
accountability and reform. If they don’t, then taxpayers should expect more
demands for additional education spending and higher taxes with no explanations
or expectations that it is being used wisely.
For years liberal groups have
aimed to unravel basic election integrity practices in the state of Arizona. From repealing ballot harvesting to pushing
for same day voter registration – the goal is a California-style free for all
where anything goes. Even
amidst legal defeats that have forced California to remove staggering numbers
of inactive and unverified voters from their rolls, extremists continue to try
to import these same policies in our state.
Case in point, an initiative dubbed
the “Fair Elections Act” was recently filed with the Secretary of State’s office
and includes almost every possible measure to erode safe, secure and honest
elections in Arizona.
Among the worst of the provisions
is the creation of a “democracy voucher” system which would furnish every
registered voter with certificates of $50 – $150 in order to facilitate small
dollar political contributions. Despite
claiming to be a tool to empower average Arizonans to exercise choice and their
political voice, these funds would only be eligible to be given to candidates
running via the Clean Elections Commission system.
Democracy isn’t cheap
either.
Based upon current registration levels
and the minimum and maximum allowable distributable certificates, $191 – $573
Million of hard-earned taxpayer dollars could be up for grabs by politicians.
How does the initiative purport
to pay for this? With a tax increase of
course. The proposal would raise the minimum
corporate income tax from $50 to $150 – swiping the $100 increase for Clean
Elections. In addition, it would allow an up to $500 dollar for dollar tax credit
for contributions to the commission. Although these revenue enhancers alone are no where
near enough to cover the potential exorbitant costs, proponents are banking on
the idea that there will be low voter participation in the program – proving even
when you give people free money, they would rather not take it then give
it to a politician.
The voucher program isn’t the only
part of the measure with a hefty new price tag.
The initiative would also trigger automatic voter registration for
citizens receiving a drivers’ license or updating their information with the DMV. Within the 30-page initiative are tedious administrative
requirements for inter-agency coordination to include the Secretary of State,
Department of Transportation, Arizona Health Cost Containment and other
agencies.
Because not everyone getting
their license or updating their information is eligible to vote, the initiative
includes a complicated process for mailing citizens. It would be incumbent upon the citizen to
return the pre-stamped mailer to indicate they do not want to be registered to
vote or that they are ineligible to vote.
The citizen has two years to complete missing or fix inaccurate information
before their status as a registered voter is cancelled. Even when their status as a voter is pending,
they are able to vote if an election is occurring.
No where in the initiative is it
mentioned how the state will pay for the inevitable technology overhaul
required to implement this “automatic voter registration system” or the onerous
process for constant pre-stamped mailers. Even more glaring are the gaping opportunities
for fraud. Currently, it is so easy to
register to vote in Arizona, the only excuse for not is apathy, laziness or
ineligibility. Placing the burden on
someone in any of these categories to ask to be excluded in the voter
rolls is a waste of time and money and sure to be a magnet for inaccuracies.
This is the tip of the iceberg when
it comes to bad ideas jammed packed into this election omnibus initiative. Hopefully voters will see through this
attempt to co-op the security of the Arizona ballot box and reject ideas that
have destroyed the election integrity of states like California and Washington.
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.
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.
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