by admin | Nov 29, 2018 | Misc, News and Updates
A group of Phoenix residents and business owners successfully submitted over 40,000 signatures to the city clerk yesterday to refer an initiative to the ballot to end the $1 Billion construction of future light rail projects. The committee held a press conference to mark the momentous achievement.
After the city of Phoenix railroaded citizens of South Phoenix by pushing plans of a light rail extension on Central Ave that would reduce the number of traffic lanes from four to two, a grassroots effort emerged to beat back the disastrous plan.
Since community opposition began to coalesce in April of this year, the group has successfully stormed city hall, held community forums that reached thousands of residents, and stalled the 2-lane project on Central.
Their latest efforts were bolstered by support from residents and business owners throughout the city who would also be negatively affected by the expansion of light rail near them.
Building a Better Phoenix (BBP) put the City, the Federal Transit Administration, and Valley Metro on notice to cease any further funding or construction of light rail projects until the citizens have a chance to vote on the initiative, which will likely be in May or August.
This is a true David and Goliath story as the citizens’ group will likely be outspent 10:1 by the light rail and construction lobby. But facts are on their side. Instead of spending 40 percent of the city’s transportation revenues on light rail which serves less than 1 percent of the population, BBP would divert the money to be used for infrastructure improvements, including roads and bus service, which alleviates congestion.
A lot will ride on the success of the upcoming campaign, especially for South Phoenix who will experience certain gentrification of their neighborhoods, increased crime and homelessness in their community, and inaccessibility of emergency services with the 2-lane configuration.
The City of Phoenix is in desperate need of infrastructure improvements. Their roads are riddled with potholes and many are falling into complete disrepair. Especially in South Phoenix, many bus stops lack proper shading, long stretches of road are without sidewalk, and residents complain of poor lighting. Light rail has long been a rat hole of the taxpayers’ finances while also being ineffective at increasing mobility or convenience to residents. If the BBP initiative passes, money will be able to be diverted to higher priority challenges and more directly serve the citizens and businesses of Phoenix.
We hope the taxpayers of Phoenix will take this golden opportunity to hold city hall accountable and pass this historic initiative.
by admin | Nov 21, 2018 | Misc, News and Updates
Recently the City of Phoenix did something shockingly out of character. They made a good financial decision.
Two weeks ago the city council voted 7-1 to end their membership with the Arizona League of Cities and Towns. The League is an organization that depends on taxpayer money to hire lobbyists to persuade Arizona lawmakers to pass or defeat bills often contrary to taxpayer interests. At $145,000 a year, the City of Phoenix represented the largest single membership of the League.
Several of the council members cited the ineffectiveness of the League as their reason for their exit. Although it is likely that the City will simply use the money to hire more internal or contract lobbyists, the vote was still monumental as Phoenix has been a member of the League for over 80 years.
The City of Phoenix’ decision will be a significant signal to other Arizona cities and towns and may spur other local councils to weigh their investment in the organization.
The practice of local municipalities enriching lobbyists to fight for more government authorities and against good reforms that benefit taxpayers is common place. Just three years ago, the Club did independent research into just how much cities were wasting on lobbying activity. But the costs aren’t just monetary. Every year, dozens of bills are introduced at the legislature that promise important protections for taxpayers in the way of property rights, economic liberty and free speech. And each year dozens of city lobbyists work to ensure their defeat.
Though the City of Phoenix’ decision to remove itself from a big organization that solely exists to fight for more government might not have been philosophic – it does represent a win for taxpayers. Hopefully more cities will take their lead; at least on this decision.
by admin | Nov 9, 2018 | News and Updates, Tax
Arizonans have won BIG since Congress passed the Tax Cuts and Jobs Act (TCJA) in December 2017.
At the end of April of this year, over $215 Million dollars has been returned to taxpayer and rate payer pockets. Raises, utility rate cuts, bonuses and expanded benefits have enriched families and small businesses, as well as supercharged the national economy.
The federal legislation didn’t just cut tax rates, but also made reforms to the tax code that greatly simplified and streamlined our tax system, saving average taxpayers time, money and heartburn. For example, the bill doubled the standard deduction, which will save most Americans the hassle of having to itemize their deductions.
Despite the tremendous benefits to residents in our state, the TCJA poses both a challenge and an opportunity for Arizona.
The Challenge
Arizona’s tax code is reliant on the federal tax system as our income tax forms begin with the Federally Adjusted Gross Income (FAGI) figure. Each year when the federal government makes tweaks to the federal tax code, the Arizona legislature runs a “tax conformity” bill to align our codes.
The TCJA was passed in December of 2017 and most of the changes went into effect in January 2018 – some even applied retroactively. These were not small technical changes; but constituted the largest tax overhaul of the last 30 years. Therefore, the usual tax conformity bill at the Arizona legislature was insufficient to retain coupling with the federal tax code.
Moreover, because the tax cuts put more money directly back into taxpayers’ hands, the average Arizonan’s FAGI also increased. What does that mean? If the Arizona legislature does nothing, the State of Arizona will see a significant revenue windfall, borne by Arizonans by way of an unintended tax increase.
In fact, the Joint Legislative Budget Committee and the Department of Revenue, which does the fiscal forecasting for the state’s budget, estimates a $173M increase and a $236M tax increase respectively, in FY 2019 alone. The number is expected to grow to over $300 million by FY 2020.
The State cannot afford to do nothing.
Aside from the unintended tax increase, if the Legislature and Governor fail to pass tax conformity and reform before the 2019 tax year begins, there will be complete tax chaos in the state.
According to DOR, the impacts of not conforming would include:
- For 2017, taxpayers would have to amend their returns to back out from federal retroactive changes, including depreciation deductions and taxpayers affected by natural disasters in 2016 and 2017
- Taxpayers filing for 2018 would not be able to rely on the amount determined in their federal return for the starting point in their state return. This would add the following complexities:
- DOR would need to create a new form that lists all the adjustments necessary to determine a taxpayer’s 2018 FAGI
- Taxpayers would need to complete schedules that include hundreds of adjustments simply to determine Arizona’s starting point
- Major Changes would need to be made to DOR’s tax system
- The complexities would grow each year with non-conformity
- Because the additions and subtractions would be non-specific, explaining the process to taxpayers will be extremely difficult
Without a doubt, no one except the CPAs will profit from such a scenario as this.
The Opportunity
Historic federal tax reform has opened a window for Arizona to rethink our tax structure and make changes, that like the federal changes, modernizes and surges our economy.
The state has an opportunity to not just avoid a tax increase, but to use it to address inequities in the tax code, ensure 90 percent of taxpayers do not have to itemize their deductions, and even consolidate tax brackets.
With a major election behind us, it is time for our lawmakers to get down to the actual work of the jobs for which they have been hired. That means calling a special legislative session prior to January and passing a conform and reform bill. If they wait and allow the chaos to ensue, they can be sure that voters won’t forget and won’t rehire them in the future.
by admin | Nov 7, 2018 | Elections, News and Updates
The 2018 elections were filled with contentious candidate races and divisive politics. But one issue voters decisively agreed upon was Proposition 306, which ended the practice of publicly-financed candidates using their taxpayer money to enrich their political party.
Proposition 306 was passed by the legislature and referred to the ballot box to stop the abuses discovered in the 2016 elections, where over $100,000 of taxpayer money was funneled to the Democratic Party. That abuse continued this election cycle and would have continued to proliferate if voters hadn’t approved Prop 306.
“We are very pleased that voters overwhelmingly supported Proposition 306 and ended the abuse of the Clean Election System. And considering that the Citizens Clean Elections Act originally passed with only 50.1 percent of the vote, this was a clear message that voters wanted more accountability and oversight over the program,” said Scot Mussi, President of the Arizona Free Enterprise Club and Chairman of the Stop Taxpayer Money for Political Parties campaign.
Along with the end to the corruptive practice of enriching parties off the taxpayer dime; Proposition 306 will also give much needed oversight of the Citizens Clean Elections Commission by requiring them to follow the same rule-making procedures as every other agency in the State.
Although the elections results were a mixed bag of results for both sides of the aisle – the passage of Proposition 306 was a win for all Arizonans of every political stripe!
by admin | Oct 31, 2018 | Elections, News and Updates, Prop 306
The Citizens Clean Elections Commission claims they care about keeping special interests out of the political process by providing candidates with taxpayer funds to run for office.
But as was discovered in 2016 election cycle, politicians and political operatives know how to cheat the system and the unaccountable Clean Elections Commission just doesn’t seem to care.
An examination of campaign finance reports filed by publicly funded Clean Election Candidates in 2018 show over $100,000 being funneled to the state, county and local political parties, as well as to other political operations such as the Arizona Democratic Legislative Campaign Committee (ADLCC).
As was the case in prior elections, the democratic candidates running in the least competitive legislative districts are the biggest contributors to these electioneering efforts.
One of the worst offenders is candidate Lynsey Robinson from conservative legislative district 12 in the East Valley. She gave a staggering $22,590 to the Democratic Party Operations, which is over 50 percent of the total amount she receives from Clean Elections! If her intention was to win her race, sending over half her money to the Party seems like a poor strategy to do so.
Other giveaways to political groups include:
$21,442 from Jo Craycraft, candidate for Senate in LD 1
$18,980 from Hazel Chandler, candidate for House in LD 20
$18,500 from Chris Gilfillan, candidate for House in LD 20
$14,170 from Mark Manoil, candidate for State Treasurer
$12,400 from Kiana Sears, candidate for the Corporation Commission
$9,520 from Kathy Hoffman, candidate for Superintendent of Public Instruction
Interestingly enough, the largest benefactor of these public funds was the ADLCC, a Political Action Committee chaired by legislative democrats to elect democrats around the state of Arizona. Traditionally, victory PACs such as this provide money and support to candidates—they don’t receive money from them. This is because committees such as this fundraise for the express purpose of playing in election races. However, they do so independently of any candidate because it is against the law for organizations and PACs to coordinate with candidates on their election activities.
That makes the expenditure to the ADLCC even more suspicious. Either a candidate is giving them money to use in other more competitive races (which is wrong and must be stopped), or they are giving them money to provide services to their campaign (which is likely illegal.) Either way, the ADLCC’s taxpayer gravy train is an offensive abuse of the system and should be stopped immediately.
The unaccountable Clean Elections Commission has made it clear that they don’t care how our money is wasted, which is why voters must vote YES on Proposition 306. Prop 306 would prohibit candidates from funneling taxpayer funds to political parties and political special interest groups. If there was any question that the exploitation of the system would continue and proliferate – this year’s election season proves otherwise.
Voters should put an end to it by Voting Yes on Prop 306.
by admin | Oct 17, 2018 | News and Updates, Tax
Proposition 126 is arguably the most difficult proposition to contend with on the November ballot for conservatives.
On the one hand, the initiative shuts the door on a potential tax grab in the future – taxes on services. It creates predictability for businesses in the service industry. And it is finally an example of a citizen’s ballot initiative that curbs taxes rather than doggedly seeks to increase them permanently.
Yet, Governor Ducey, the Maricopa Republican Party and taxpayer watchdog organizations such as Americans for Prosperity and The Arizona Free Enterprise Club are urging their bases to vote ‘No’ on Prop 126.
Why? Not because they want to see services taxed in the future…
Limitations on Taxation Should be Broad-Based and Inclusive
One of the core arguments in favor of Prop 126 is taxpayers should support any measure that prevents future tax increases. Though this is a laudable goal, the problem with this strategy is that when those limitations are narrowly targeted to benefit a particular group, it leaves everyone else exposed to future tax hikes.
That is the fundamental flaw with this service tax initiative. If stopping future service taxes is a good idea, why not apply the prohibition to the entire tax base? Fortunately, we already have a broad-based solution on the books—Proposition 108. Approved by voters in 1992, this constitutional amendment requires any tax increase by the legislature have a 2/3 vote, including taxes on services. If there is a concern of future tax hikes, then a better approach would be to clarify and expand this taxpayer protection rather than creating a new one.
Prop 126 Impedes Comprehensive Tax Reform and Actually Threatens More Tax Increases
Our organization is unapologetically in favor of eliminating the state’s income tax in the future. A mountain of research exists demonstrating states without an income tax and with a lower income tax burden consistently economically outperform states with an income tax or a high-income tax burden.
If Prop 126 passes, it increases the likelihood that we will have to become MORE DEPENDENT on income and property taxes in the future. The reason for this is because our current sales tax base built on taxing goods is shrinking. When our current tax code was shaped over 80 years ago, services made up only a small fraction of our economy. Now it is approximately half and is expected to become a larger share throughout the next century. If the current sales tax base continues to erode, the only option will be higher taxes on our income and property.
How We Cut Taxes Matters
Just as important as ensuring Arizona has as low a tax burden as is possible, is the method by which we craft tax policy. Prop 126 is a Constitutional Amendment that if passed by the voters, could not be changed, tweaked or amended without sending it back to the ballot box.
Simply put, rifle-shotting tax policy into Arizona’s constitution is not how a representative government should function. A more prudent method of governance is the legislative process. The initiative process gives voters a binary choice: vote for this specific policy or reject it. The legislative process in contrast, allows for changes, compromises and inherent checks.
Also, although the citizens’ initiative process was contemplated as a separate and coequal branch of the government and a check on the legislative branch – what it is today is far from that. Rather than initiatives being reflective of the “will of the people” they are banked rolled and run by the machines of special interest groups – Prop 126 is no different.
The Economy Changes, and so Should the Tax Code
The evolution of technology and therefore our economy necessitates changes to our tax code. The revolution in transportation technology on the horizon will dramatically change our economy.
It is conceivable that as ride sharing becomes so affordable and autonomous cars so efficient, that transportation becomes another great commodity by which people subscribe to a monthly service and opt out of purchasing their own car.
Self-driving cars and affordable ride-sharing services has already created a huge disruption in the automotive industry. Most cities in Arizona rely heavily on sales tax and of those revenues a huge portion consists of the taxes generated from car sales.
Car ownership is already in decline, especially among younger generations who are opting out of even getting a driver’s license. Predicting what this phenomenon will look like in 10 years, let alone 50 years is impossible.
Arizonans Could Seriously Regret Passing Prop 126 in the Future.
Despite its ostensible appeal, the actual benefits to Arizona taxpayers’ if they pass Prop 126 are superficial. Yet the manifold downsides are deep, long-lasting and may even create the opposite effect of what many voters wish to accomplish with its passage. For these reasons we encourage voters to take a second look at Prop 126 and Vote No.
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