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.
by admin | Jul 2, 2019 | Elections, News and Updates
The City of Phoenix has been
living beyond their means for way too long.
Their fiscal irresponsibility has led to a crushing $5.7 Billion in unfunded
pension debt and no real plan on how to pay it off or honor their commitments
to current or future retirees.
The City of Phoenix Employees’
Retirement System (COPERS), the retirement plan for general employees excluding
sworn police and fire personnel, is woefully underfunded. The City contributed less than $30M a year to
COPERS in the early 2000’s; this is expected to balloon to over $180M by next
year. Yet these payments still won’t put a dent in
the mountain of debt. As of only two
years ago, the fund was only 57 percent funded – having $2.35B in assets to
cover $4.13B in liabilities.
Despite several propositions
passing in the past to right the ship – Phoenix is still severely
underwater. That is because the city has
a major spending problem. And instead of
addressing this problem, politicians have continued to kick the can down the
road, using accounting tricks and other sneaky maneuvers to avoid addressing
the crisis.
That is why a group of citizens
and Councilman Sal DiCiccio has pushed to get Prop 106 on the August 27th
ballot. If approved by voters, this measure will end the budget gimmicks,
require honest accounting of pension costs and prioritize paying down the debt
of the pension system. The measure will also prohibit the city’s budget from outpacing
inflation plus population and put a cap on spending until pension liabilities
are funded at 90 percent.
This will put the city’s
pension system on a sustainable path and ensure that pension obligations are
met.
Prop 106 is a responsible
plan for a growing problem that will benefit both taxpayers and retirees. We encourage
Phoenix citizens to Vote Yes on Prop 106.
by admin | Jun 18, 2019 | Misc, News and Updates
Even with a billion-dollar
budget surplus and record state revenues, Democrats in the Arizona
legislature were united in their cause to raise taxes and fees on hardworking families.
How big was their tax hike
push? Every Democrat in the State Senate and House voted to:
In total, the Democrat tax
hike package would have cost taxpayers over $500 million dollars.
Fortunately, Republicans
were successful in fending off the Democrat tax hike push by repealing the car registration
fee and returning the additional tax revenue generated from tax conformity and
online sales back to taxpayers.
Though taxpayers dodged a
bullet, it does not appear the Democrats have been deterred from their
relentless push to take more of their money. This is a fact that every voter
should consider heading into the 2020 election.
by admin | Jun 6, 2019 | Misc, News and Updates
For years city politicians,
developers and contractors have misled voters on the waste and damage created
by the multi-billion-dollar expansion of light rail. They have concealed the
true cost of light rail from voters in previous transportation measures by
tying light rail to street improvements and other popular transit projects,
hoping that the facts would not be exposed until it is too late.
Currently 40% of Phoenix’s
transportation tax revenue is dedicated to light rail, even though only 1% of
Phoenix residents regularly use the system. And despite billions
being spent on promoting and expanding light rail, ridership is in rapid
decline. Last year alone 800,000 fewer people used light rail, and there will
be fewer riders using the system this year.
The City’s own transportation
department has determined that over 70% of Phoenix roads are in substandard
condition and will require billions to repair. This street maintenance deficit
can be paid for with the dollars freed up by ending the expansion of light
rail.
The billions saved by stopping
the expansion of light rail could be used to fix city streets and sidewalks,
expand bus and dial-a-ride service, improve lighting and get Phoenix’s
transportation system on the right path.
There are much better alternatives than light rail, yet Phoenix leaders seem determined to throw more money at a boondoggle that is costly, inefficient, and drains the city’s transportation budget. Phoenix taxpayers deserve better than this.
by admin | Jun 4, 2019 | Free Market, News and Updates
Phoenix, AZ (June
4th)–Today the Arizona Free Enterprise Club, in collaboration with the Economic
Research Center at The Buckeye Institute, released “It Ain’t Easy Being Green: A
Cost-Benefit Analysis of Electric Vehicles in Arizona.” The paper is a comprehensive study
examining the pros and cons of electric vehicle (EV) subsidies in Arizona and
whether these inducements are worth the cost to taxpayers and utility ratepayers.
The
analysis was conducted in response to several proposals being considered by
policymakers in Arizona to encourage more drivers to purchase EVs, including a current proposal at the Arizona Corporation
Commission to require utility companies build EV charging stations, with the
cost of these stations being passed along to all ratepayers through higher
utility rates.
The
study reveals that EVs are already heavily subsidized by taxpayers in Arizona
and that creating a new mandate for the construction of charging stations would
only exacerbate the status quo, distort the market for EV technology and redistribute
wealth to a few affluent EV car owners at the expense of every electricity user
in the state.
“After a comprehensive analysis, our research
clearly shows that—in an effort to encourage the purchase of more electric
cars—Arizonans are being over taxed to subsidize wealthy owners of electric
cars, which disproportionately hurts those who can’t afford to purchase a new
electric car. Taxpayers are seeing
little return on these subsidies, paying on average more
than $6,000 more per electric car on the road than they are realizing
in benefits over the course of five years,” said Andrew J. Kidd, Ph.D., an economist with the
Economic Research Center at The Buckeye Institute and one of the authors of “It
Ain’t Easy Being Green.” “Furthermore, if a new proposal by the
Arizona Corporation Commission is adopted, Arizonans will pay more on their
electric bills to subsidize the building of more electric charging
stations—even though there are currently 12 public chargers for every electric
car on the road in Arizona.”
Some of the other key
findings in the study include:
- A Charging Station
Mandate would act as a regressive tax on low and middle-income households to
benefit more affluent EV drivers.
- Over 83% of EV tax
credit subsidies went to households earning above $100,000. Conversely, less
than 1% of those subsidies were accessed by households below $50,000.
- In Arizona, EV car owners
pay on average $500 less each year than non-EV drivers for road maintenance.
“Mandating the construction of EV charging stations, paid for with an increase in utility rates, is both unnecessary and unfair,” said Scot Mussi, President of the Arizona Free Enterprise Club. “Taxpayers are already overpaying based on the benefits provided by Electric Vehicles. Instead of handing out another subsidy to EV drivers, policymakers should explore other options that avoid picking winners and losers among ratepayers.”
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