by admin | May 23, 2018 | Misc, News and Updates
When the City of Phoenix was considering the transit sales tax increase in 2015, hidden in the noise of the campaign was a proposed transit project to extend the light rail line along Central Ave. from Washington/Jefferson South to Baseline Rd.
Throughout the entire transportation planning process at City Hall, only scant details were provided to local residents and business owners on the impact the Central Ave. light rail line would have on the community. Only now is the truth coming out, and local residents are rightfully aghast at how destructive this project is going to be.
Among the most shocking discoveries was the fact that the proposed project would reduce Central Ave. from 4 lanes to 2, a drastic change that will increase traffic congestion and inflict immeasurable economic damage to neighboring businesses. Additionally, the elimination of multiple left turn lanes will make access to many shops nearly impossible along the route.
If the specter of an unnavigable two-lane road isn’t scary enough, the reality is that many of these shops won’t survive the construction phase of the project—4 years of aggravating roadwork that will send customers fleeing and crushing their bottom line.
The false claims of community support were just as disturbing. For months, Phoenix circulated materials claiming enthusiastic support from businesses along Central Ave. One small problem: many of the allegedly supportive business owners either were unaware of the light rail project or opposed it altogether. Larry White of Lolo’s Chicken and Waffles and Pastor James Preston of Preston Funeral Homes and Bethesda Community Baptist Church had to submit written letters expressing their disapproval of light rail after discovering that they were listed as supporters of the plan.
In response to Phoenix’s deceptive rail campaign, a citizen led effort called “4 Lanes, or No Train” organized to try and stop the current proposal in its tracks. Their goal is to educate the South Mountain Village community on the detrimental impacts of the current proposal and offer common-sense alternatives.
Their demands are reasonable: maintain 4 street lanes for cars along Central Ave, expedite construction, explore alternative transit solutions that cost less than light rail, and oppose any confiscation of private businesses and private property from the citizens.
The community response to ‘4 Lanes or No Train’ has been tremendous. After learning more about the high costs ($140 Million per lane mile for light rail), increased congestion and inevitable closure of many local small businesses, over 3,000 residents have signed their petition. Group organizer and owner of a window tinting shop, Celia Contreras, fears that her business will be one of the casualties.
So far Phoenix has ignored the community outcry, but the pressure is mounting. A community meeting has been scheduled for May 31st at the South Mountain Community Center to discuss the project, and it is likely to become a campaign issue in the Phoenix Council Elections.
The outstanding question is how will this particular story end? Defeating the light rail lobby is an uphill climb, as they are well funded, politically powerful and sinister in their tactics. Our hope is Celia Contreras and her community allies are successful in derailing the light rail scam.
by admin | May 18, 2018 | News and Updates, Tax
Looking to exploit the momentum created by the recent school strike, a small coalition of liberal organizations and labor unions have launched a ballot initiative that would permanently damage Arizona’s economy.
The proposed “Invest in Education” proposition would impose a new top individual income tax bracket of 9 percent, a near doubling of the current top rate of 4.54 percent. This radical increase would give Arizona the 5th highest income tax rate in the nation, trailing only California, Hawaii, Oregon and Minnesota.
Joining the ranks of the high-income tax states would be a decision that Arizona would quickly come to regret. The evidence is overwhelming—states with a low or no income tax have consistently outperformed high tax states in job creation and economic growth.
It is why for decades Americans have been voting with their feet and moving to states like Arizona with a favorable tax climate. On net, nearly 1,000 people a day are migrating to low income tax states, while the same number is exiting high tax states. If this initiative passes, we should expect entrepreneurs, high earners and employers to take their jobs and investments elsewhere.
To justify their crushing tax hike, proponents are promising that the approximately $700 million in anticipated new revenue from the tax will go toward K-12 funding. Of course, the initiative doesn’t include any language that ensures the money will make it into the classroom, nor does it include any reforms to improve outcomes or parental satisfaction.
They are also selling their plan on the idea that only the “rich” will pay the tax increase. In reality, small business owners and entrepreneurs will be hammered by the increase since they pay their taxes through the individual tax code.
Also unmentioned by the proponents of the initiative is that a new revenue stream for schools is no longer needed. While the Red for Ed debate was raging on at the legislature and in living rooms this spring, economic forecasts confirmed that Arizona would have the largest budget surplus since the great recession.
This tremendous news is not an accident. The rapid acceleration of projected revenue is a direct result of both local and national policies that fostered a pro-growth economic environment in Arizona. It can be argued that lawmakers reacted too slowly during the legislative session to allocate new funding into K-12 classrooms (close to $1 billion), but it illustrated that the best mechanism to generate more money for schools is through economic growth, not job crushing tax increases.
The impact of the largest tax increase in Arizona history would be catastrophic. It will kill jobs, punish small business owners and send families fleeing to other states. The proponents of this measure might think they are being clever by linking two politically attractive targets—school funding and taxing the “rich”—but we are confident that voters will see through their ploy and reject this divisive initiative if it reaches the ballot.
by admin | May 1, 2018 | News and Updates
Last Thursday 50,000 individuals descended on the Arizona Capitol in support of a teacher’s strike; the state’s school districts shut down and turned away roughly 800,000 students.
According to the narrative surrounding Arizona’s education system, nearly everyone is willing to accept that teachers are grossly underpaid, that Arizona ranks 50th in per pupil funding and that the state has failed to backfill $1 Billion in pre-recession education funding. Indeed, according to the machine that consistently ensures Arizona gets no credit for educational wins and disparages our system at every turn, Arizona ranks dead last in every possible educational metric.
But there is more to the story. And if Arizona is going to take meaningful steps to improve the K-12 system, we must first start with a clear and factual picture.
Last year the Morrison Institute at Arizona State University published a study declaring a startling decline in teacher pay and turnover. Their work joined the collection of analyses of teacher pay done by the National Education Association (NEA), the Arizona Office of Auditor General (OAG), and National Center for Education Statistics (NCES.)
According to the Morrison Institute, the 2016 average salary of an Arizona elementary school teacher adjusted for “regional buying power” was $40,860 and $46,070 for secondary teachers – 50th and 49th in the country, respectively.
This was a curious finding, especially since most every other national ranking has Arizona with a higher average teacher salary than the Morrison Institute. The National Education Association ranks Arizona 43rd in the country at an average teacher salary of $47,218. The Arizona Office of the Auditor General has Arizona teacher salaries at $46,384 and the National Center for Education Statistics has Arizona ranking 44th in the country with average teacher salaries at $47,403.
How could the Morrison Institute arrive at such a different conclusion than virtually every other study on teacher pay? The answer appears to be that they decided to use a combination of questionable wage and cost of living data to show Arizona in the worst light possible.
For example, in calculating the wage figures, the Morrison Institute used the Bureau of Labor Statistics (BLS), a data set that only uses a cross-section of W-2s and leaves out other wage information such as teacher bonuses. No other major study (including the NCES) use BLS wage data, and the result is a significantly lower average teacher pay figure.
The Morrison Institute skewed the numbers even further when adjusting for cost of living. In comparing wages among states, most studies incorporate the Cost of Living Index (COLI) to adjust for salaries. The Morrison Institute instead used the Regional Price Parities index, arguably one of the more questionable data sets available. For example, RPP doesn’t take into account the average cost of home purchases, which would lead to a large discrepancy since Arizona is one of the more affordable states to own a home.
When COLI is used to analyze the more comprehensive NCES and NEA data – Arizona is 40th in the country and outranks Colorado ($46,506), Utah ($47,244) and New Mexico ($47,403) in the region.
How would Governor Ducey’s 20by20 plan impact Arizona’s national standing for teacher pay? A 20 percent raise would increase the average teacher salary in Arizona to $56,661, a $9,443 dollar increase. Adjusted for cost of living, Arizona would vault to 10th in the country for teacher pay.
These facts should be empowering and encouraging to Arizona taxpayers who are used to hearing a constant onslaught of criticisms about how despondent the prospects of our public education. Considerable and noticeable improvements are achievable and can be accomplished without raising taxes.
by admin | Apr 23, 2018 | News and Updates
It has been a week since Governor Ducey announced his “20 by 20” plan for Arizona teachers, and suffice to say there are more questions than answers on the long-term financial sustainability of the proposal. According to the latest JLBC estimates, if the Governor’s plan was implemented to increase teacher pay (which likely won’t happen, since local districts determine teacher pay) and fully fund Additional Assistance, Arizona would be running a structural deficit of $200 Million dollars by 2021.
The Governor’s solution to this problem has been to increase the economic revenue projections for the State above the JLBC estimate and bank on continued caseload reductions at AHCCCS (Arizona Health Care Cost Containment System.) Governor Ducey could be right, but this is the same exact mistake that was made 10 years ago that led to billion-dollar deficits and a decade of budget turmoil. Additionally, this doesn’t take into account another recession that is likely to occur in the next couple of years.
Rather than rely on a rosy economic outlook, policymakers should evaluate funding alternatives, budget cuts and modifications to the Governor’s education plan that would avoid putting Arizona in another fiscal crisis. Additionally, lawmakers would be remiss to pass on another opportunity to tie education policy reforms with new increases in K-12 funding.
Some possible funding options and reforms include:
- Eliminate the Arizona Competes Fund (Budget Savings–$11.5 Million)—The Arizona Commerce Authority Currently receives $21.8 Million in total funding from the state general fund, with $11.5 Million earmarked for the Competes Fund. As one of the most unnecessary and useless expenditures in the state budget, the Competes Fund would only be missed by political insiders and special interests that have access to the grants and subsidies handed out by the Commerce Authority. This is a spending cut that most taxpayers would support.
- Cut University Bonding package by 50% (Budget Savings–$13.5 Million)—Last year the legislature approved a measure to allow Universities to bond for as much as $1 Billion for new capital facilities and other projects. It was always questionable whether our three state Universities needed a billion dollars for new buildings, especially since they have secretly been in the property tax abatement business for several years without notifying lawmakers. Modestly reducing their bonding capacity to $500 Million isn’t unreasonable and wouldn’t impact their current level of operational funding.
- Reduce Urban Revenue Sharing with Cities by 10 percent (Budget Savings–$120 Million.)—Currently Arizona tax revenue from income and sales is shared with local municipalities, with approximately $1.2 Billion being diverted from the state general fund. It is one of the most generous revenue sharing models in the country, and is questionable policy as it removes accountability at the local level. And as long as cities believe that it makes sense to throw away over $100 Million a year on utterly wasteful projects such as light rail, it is clear that this is a cut that wouldn’t be missed.
- Reduce the K-12 teacher funding increase to 10 percent by 2019 (Cost Savings–$225 Million)—Though the Governor seems stuck on the 20 by 20 plan, lawmakers would be wise to instead approve a 10 percent increase and wait to see if the revenues materialize to justify a larger amount. A 10 percent increase is doable under the JLBC budget projections and would provide the capacity to substantially increase teacher pay at the local level. According to the Tax Research Association, Arizona is currently 40th in teacher pay in the US when adjusted for cost of living. If school boards decide to use the additional funding to solely pay for teacher pay raises, Arizona would move up to 22nd in the nation. This would be a major step in the right direction while keeping Arizona on a sound fiscal trajectory.
- Continue moving toward backpack funding and other school finance reforms—If parents and students are to see a more fair and equitable funding structure in Arizona, then reforms are needed to fix Arizona’s broken funding structure and do a better job of tying K-12 funding to students. Though advocates, unions and the media are more than happy to point all the fingers at the legislature and Governor for low teacher pay, local school boards and administrators continue to escape all accountability. It isn’t right that mismanaged and poor performing districts will be equally rewarded as the responsible schools that have done a good job getting money in the classroom. Lawmakers must look at every proposal to increase funding as an opportunity to empower high-performing schools and districts and stop protecting the bad actors in the school finance formula.
by admin | Apr 17, 2018 | News and Updates
Late last week the simmering dispute over teacher pay finally boiled over, and now the legislature and Governor Ducey are racing to meet the demands of angry educators. On Thursday, the Governor held a press conference announcing his commitment to fund a 20 percent pay raise for all teachers, to be implemented over two years.
The good news is that the Governor remains committed to raising teacher pay without raising taxes. The downside is that his administration may be relying on unrealistic revenue projections over the next couple of years, which if overstated could lead to a new budget deficit for Arizona. After fixing the structural deficit in his first year, it would be a major disappointment if his new proposal puts Arizona back in the same hole that Ducey inherited in 2015.
The Governor’s plan isn’t the only proposal circling the halls at the capitol. A small group of Republican lawmakers were pitching their own teacher pay plan, with one big difference—the 20 percent raise would be paid for primarily through middle-class income tax increases and an “undisclosed” tax hike in 2020.
Notwithstanding the fact that any spending plan that relies on mystery tax increases in the future isn’t a real plan, it is startling that some lawmakers support the idea to use tax conformity dollars generated through federal tax reform to pay for higher teacher salaries. Make no mistake, any revenue kept by the legislature as a result of tax conformity is an income tax increase.
Earlier this session a coalition of organizations sent a letter to the legislature and the Governor urging our elected leaders to return to the taxpayers any additional revenue generated by the State as a result of Federal tax reform. Currently the Department of Revenue and JLBC have estimated that individual taxpayers will pay between $175 to $235 Million more in individual income taxes if action is not taken by lawmakers.
Despite the wishes of politicians, this is not new revenue generated by Jack’s magic beans. This is a looming tax hike that could undo the benefits of federal tax reform if not properly addressed.
If policy makers want to implement a 20 percent teacher pay raise, they should do it through other spending cuts and reasonable projections in future revenue. And if lawmakers do want to raise taxes to increase teacher pay, then they should at least be transparent in their actions and not hide their tax increase proposals in the shadows of income tax conformity.
by admin | Apr 12, 2018 | News and Updates
In a historic vote, the Board for the Maricopa County Community College District voted to end “meet and confer” process at their meeting in February. Meet and Confer is a form of collective bargaining by which the district’s faculty association has input into faculty benefits such salary schedules, code of ethics, and workload.
The decision was opposed by the faculty association and allies in organized labor and resulted in a frivolous lawsuit claiming damages in excess of $850,000. Lest anyone confuse the faculty board’s motivation with benevolent concern with ensuring the more than 1,400 full-time faculty members of the district get a fair shake – it is important to note that each of the four executive members are claiming $150,000 worth of personal damages for each of them. The other $250,000 are claimed on behalf of the association which pays the board to negotiate on behalf of its members. That’s a lot of upside for association board members. It is less clear how the rest of the 1,404 faculty members benefit.
Although the faculty association isn’t an officially recognized union, their actions leave hardly any room for distinction. When the district board was discussing the policy change as a way to streamline faculty policy-making and save valuable county resources – the association immediately ginned up opposition by spreading fears of the worst-case scenarios. Which was a convenient ploy to boost association membership – and dues.
A bureaucratic and “labor-intensive” process like meet and confer wastes time, money and resources – all of which could be directed into better compensation for faculty members who deserve it. Many communities and political subdivisions have eliminated meet and confer, and the alternative has proved to be far superior.
Individual faculty members communicate their individual concerns, needs, and desires to their management team. Under this more tailored approach of employer-employee negotiations, compensation is based upon the merit and accomplishments of individual faculty members, not from the collective bargaining of a few well-compensated representatives who must negotiate for the lowest common denominator.
At the end of the day the board members are the elected representatives of the people and all college policy decisions are their responsibility. They must balance the use of taxpayer dollars with the optimization of educational outcomes. Eliminating meet and confer is a proven, common-sense policy decision that will better serve students, faculty, and taxpayers alike.
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