by admin | Jul 18, 2017 | News and Updates
For decades, despite overall decreased levels of service, the Federal Aviation Administration has struggled with bloated operating budgets, expensive personnel and benefits costs, and high unit costs per service.
As Congress considers a reauthorization package of the FAA, a new proposal to modernize Air Traffic Control (ATC) should be adopted.
Specifically, commercializing the nation’s air navigation infrastructure would benefit taxpayers by increasing efficiencies, improving customer responsiveness, and accelerating the adoption of new technologies. All while saving users and taxpayers lots of money.
Many other countries have charted this course with much success. The UK, Canada, Germany, and France all have commercialized air navigation. Although there are variations, all are operated by private entities and have systems financed by users instead of taxes.
The private systems work while the FAA continues to struggle. Since the 1990’s, lawmakers have set policy goals for the FAA, but with little to show for it. In the last 25 years, Congress has adopted several key pieces of legislation to direct the agency to modernize its operations, cut costs, and improve efficiencies.
But a report published by the Inspector General of the Department of Transportation released in May of this year, shows that despite legislative action and significant resources poured into the FAA, there has been little to show for their “efforts.”
This should come as no surprise considering giant bureaucracies funded through general appropriations have no incentive to streamline their operations or respond to user needs and desires. Despite the FAA undergoing a massive reorganization to reduce costs, between 1996 – 2015 the agency increased their operations account by 110 percent.
Even amid nine percent lower workforce levels and a constant number of facilities, compensation and benefits expenses doubled in that timeframe. The fact is, because of outsized union influence, the FAA has not taken steps to reduce personnel costs, even though they were given great latitude in negotiating collective bargaining agreements.
Countries that permit private non-profits to run their air navigation systems have become hubs of technological innovation.
With transportation in this country undergoing a massive evolution, now is the time to tear down antiquated models and erect new, innovative and responsive models in their stead. The current model has increased the tax and fee rate on the average ticket by 20 percent. The old system for ATC does not serve taxpayers well. Consumers deserve better.
by admin | Jul 13, 2017 | News and Updates
If taxpayers had any lingering doubts that Phoenix is a lost cause when it comes to sane financial stewardship, a series of recent votes by the council should wipe them away.
First, the City Council voted in May to approve the FY 2018 budget that contains an ongoing structural deficit between $43 to $64 million. This, despite the fact that Phoenix has raised the sales tax, raised property taxes, added a water tax on utility bills and is currently taking in a record amount of revenue.
A few weeks after the budget vote, the council approved a restructuring of their ballooning pension debt, adding an additional $2.3 billion in liabilities onto the backs of taxpayers by extending the amortization schedule from 20 to 30 years.
Phoenix is drowning in pension debt, a problem city staff continues to acknowledge. Yet the amortization extension was implemented anyway to free up more money for the Council to spend in the next fiscal year. It’s a win for the politicians since they will be long gone when the bill for this budget gimmick comes due. Phoenix taxpayers, on the other hand, won’t be so lucky.
Then, just days after the pension vote, the council voted to spend $100 Million on an extension of the Sky Train at Sky Harbor Airport from Terminal 3 to the rental car lot. For those not familiar with the Sky Train, it’s the wildly unnecessary $1.6 billion-dollar train built to take people 4.3 miles from the airport to the light rail station on 44th street and Washington. That’s at a cost of $372 million per mile. By comparison, the 22-mile South Mountain Loop 202 highway project slated for completion in 2019 will cost $916 million.
According to the figures from Sky Harbor (which deserve a healthy dose of skepticism), approximately 10 percent of flyers used the Sky Train in 2016. Of course, that number would be substantially less if passengers weren’t forced to use the train for inter-terminal service after the airport cancelled inter-terminal shuttle bus service in 2015.
Most normal people would see the empty train cars going back and forth along this elevated eyesore and recognize the failure of the endeavor. But normal and city hall don’t go together, so now they think extending the line to the rental car lot will fix their white elephant.
It is all but guaranteed to fail—rental car shuttle buses are already performing this service at a fraction of the cost and an increasing percentage of visitors are using alternative services such as Uber or Lyft in lieu of renting. Once driverless cars start hitting the road in a decade, Sky Train use will dwindle to zero, but the debt service to pay for it will linger on the books for decades.
Now not everyone on the council is tossing Phoenix taxpayers over the financial cliff. Councilmen Sal DiCiccio and Jim Waring have consistently fought against each of these reckless measures, but they are outnumbered 7-2 on the council and are limited in what they can accomplish. Complicating matters further is an entrenched city staff that has a vested interested in maintaining the status quo. Add in the clout of the public-sector unions, and you have the iron triangle of municipal politics.
So what can be done? Unfortunately, any meaningful change in course will be difficult to achieve, and relief is likely years away. Two realistic reforms are possible, but both would involve going around the entrenched establishment at City Hall.
The first reform would be to consolidate the candidate election dates to even numbered years. Consolidated elections would not only save taxpayers money, but it would also increase voter turnout and engagement, a reality that strikes fear into the Phoenix power set.
A second fix would be to reform Phoenix’s broken pension system. For years the city has pushed sham reforms and actively opposed citizen efforts to transition non-public safety city employees into a 401(k)-style defined contribution plan. If enacted, pension reform would save taxpayers millions over the next 30 years.
In the meantime, Phoenix residents should expect the Illinois budget management strategy to continue at City Hall for the foreseeable future—higher taxes, more spending and creative new accounting gimmicks to hide the mountain of debt.
by admin | Jul 11, 2017 | News and Updates
It has been nine months since Arizona citizens cast their vote in favor of Proposition 206, a measure to increase the State’s minimum wage and mandate businesses provide paid sick time to employees.
Since January, employers and the State have felt the pain of the minimum wage changes. The Legislature struggled to fill budgetary gaps for contracted care providers, and businesses have faced retracting their workforce or closing altogether. It will only get worse as workers begin to encounter the Seattle experience of less pay and fewer hours when the wage ratchets up to $12/hour by 2020.
Now, at the beginning of this month, the second kicker of the 9-page proposition takes effect. The new law requires employers provide one hour of paid sick time per every thirty hours worked; with up to 24 hours per year for employers with fewer than 15 employees, and 40 hours of paid sick time a year for employers with more than 15 employees.
These mandates come with real hard costs for all businesses large and small – both in the ways of new bureaucratic requirements, higher legal standards to defend themselves against possible suits, and a less reliable workforce.
With the sick time allowance comes a slew of new accounting and reporting burdens. Employers will now be required to reformat pay stubs to include employees’ accrued time, amount of pay earned as sick time, as well as sick time used to date. In addition to this, employers will have to retain these payroll records up to four years and post a notice in their workplaces outlining employee “rights” under Prop 206. The law applies to part-time and temporary workers as well – which means employers will have to think long and hard about whether the costs associated with these additional requirements are worth the investment in employees who may or may not provide longer term value to the company. These considerations are compounded when the minimum $250 penalty for record-keeping noncompliance is factored.
More significant however, will be the new legal reality employers face. Companies are prohibited from taking a negative action in response to an employee’s use of paid sick time. That means within 90 days of a sick time request or use, the employer will be under a microscope, whereby any action perceived as negative by the employee may be scrutinized as retaliation or deterrence. And because employees are permitted to take their sick time in the smallest increment of time within the business’s accounting system, an employee could spread out their sick time in a way that puts employers within perpetual 90-day duress.
This policy change threatens the very nature of Arizona’s “Right to Work” laws that make the state such an attractive place for businesses. Employers will need to meticulously document every reason for changing or cutting an employee’s hours, denying or requiring transfers, or denying vacation time use in peak times. Anytime there is a dispute, the higher burden for defending any changes will always fall upon the employer.
Despite the inevitable damages and economic drain of these liberal, socially-engineered policies, paid sick leave is a “solution” wanting a problem. Comprehensive studies of employer paid leave policies demonstrate most businesses provide paid sick days, workplace illness is not a widespread issue, and mandatory sick laws do not reduce employee turnover. Arizonans will see no real benefit from this policy change.
Over time, the greatest effect of paid leave will be the expansion of government authority into employment contracts and the adoption of one of the highest-cost paid leave mandates in the country. It undermines Arizona’s “right-to-work” law, emboldens big unions, and erodes the trust and synergy of the employer/employee relationship.
For more information on compliance with the new minimum wage or paid sick time laws, businesses should visit the Arizona Industrial Commission: https://www.azica.gov/frequently-asked-questions-about-wage-and-earned-paid-sick-time-laws
by admin | Jun 29, 2017 | News and Updates
The Arizona School Board Association (ASBA) is a non-profit organization known for supporting a wide array of liberal education causes. While their membership includes individual members, most of their funding comes from taxpayer funded K-12 school boards, accredited community colleges, charter school boards, and state accommodation schools.
This is significant given their involvement with the referendum effort on SB1431, legislation that expanded the Education Scholarship Accounts (ESAs) program for all students in Arizona. Under the bill, students and parents who decide to utilize the program will receive an ESA scholarship to attend the school of their choice. ASBA is strongly opposed to the program, and has partnered with the political committee Save Our Schools to collect the needed 75,321 signatures to refer SB1431 to the November 2018 ballot.
Over the last month, ASBA has sent emails urging people to contribute, volunteer and sign up for the referendum efforts. They even hosted a panel discussion where they boasted that it would be a great opportunity for people to sign, collect, and drop off petitions in support of the referendum effort.
Suffice to say, taxpayer dollars being diverted to overt electioneering activities—public funding specifically allocated to educate students—should be setting off alarm bells at the state capitol. Under A.R.S. 15-511(F), it states that “a school district shall not spend monies for membership in an association that attempts to influence the outcome of an election.” Arizona campaign finance law is clear on this point; organizations that engage in support of the circulation of a petition is by definition attempting to influence the outcome of an election. ASBA has decided to jeopardize their largest funding source on a partisan electioneering crusade.
In addition to the potential legal issues associated with taxpayer funded electioneering by ASBA, it is a bit surprising that the same organization that has been relentless in their attacks against the legislature and Governor for refusing to “fully fund” education have the ability to divert precious resources away from the classroom and into campaign activities.
While individual School Board members have a right to personally advocate for the education policies they believe in, they owe a sacred duty to utilize every tax dollar they receive for its intended purpose – educating our children – not pushing their own political agendas through 3rd party non-profit organizations.
Regardless of where one stands on the ESA issue, it is not too much to ask that taxpayer money intended for education is actually used for education. Lawmakers should take a very close look at this issue and do whatever it takes to end the abuse.
by admin | Jun 27, 2017 | News and Updates
As reported by the Club last year, Pinal County officials began turning the political wheels to send a $640 million-dollar tax increase to voters to fund a wide array of transportation projects throughout the region. This new 20-year ½ cent transportation excise tax would be in addition to the existing ½ cent tax for transportation that is set to expire in 2025.
After unveiling the plan, the effort quickly spurred opposition from retailers, home builders, auto dealers and multiple taxpayer watchdog groups. However, instead of taking this as a sign that the community wouldn’t accept their proposal, Pinal officials developed a new plan to try to buy-off their political opposition.
Added to the plan was a special carve-out for purchases over $10,000 from paying the new incremental tax amount, language specifically designed to eliminate opposition from certain businesses. Only one problem—special sales tax carve-outs are illegal. They attempted to remedy this issue last session with House Bill 2156, but fortunately for taxpayers the legislation was quickly killed by lawmakers and the authority to provide the exemption was not granted.
End of the story? Not quite.
The proponents of the tax hike are moving forward anyway, and have included the carve-out in the transportation plan. Despite their public acknowledgement that this can’t be done, Pinal officials are now citing a Legislative Council opinion to defend their actions. Such an opinion is not legally binding and is heavily questioned by attorneys and tax policy experts. If pursued by the County, it is very likely that this power grab will be challenged in court.
It is pretty clear at this point that the various special interests looking to benefit from the tax hike will do whatever it takes to get it passed. With the vote scheduled for November, Pinal taxpayers should expect a well-funded, glitzy campaign that won’t discuss the insider deal making and highly questionable legal maneuvers that made it all possible.
by admin | Jun 22, 2017 | News and Updates
As predictable as the sun rising in the East, the usual suspects are again pushing the same rejected proposals to improve Arizona’s education system. Last weekend, several establishment members of the business community published an op-ed, urging the political class to rally around a billion-dollar sales tax increase to fund a cornucopia of various education proposals. The tax increase would be included with the extension of Proposition 301, the 6/10th of a cent sales tax set to expire in 2021.
If this idea sounds familiar, it’s because a similar tax hike to fund education was proposed in 2012, only to be voted down in a landslide. This plan is not much different—the massive tax increase would allegedly go to fund higher teacher pay, all day kindergarten and building renewal and construction.
And no tax hike proposal would be complete without a little crony capitalism sprinkled in; $25Million per year is included to fund job training for specific industries, likely to curry favor with financial backers of the plan.
Arguments in favor of the tax increase haven’t changed much over the years either. Voters have heard it all before, so they shouldn’t be surprised when these new promises likely go unfulfilled. For proof, look no further than the current Prop 301 tax, which was sold as the ‘silver bullet’ needed to fix our underfunded education system.
Instead, 18 years after its inception the state Auditor General has determined that only 53 cents of every dollar is being spent in the classroom, a record low. Rather than talking about a new tax, perhaps we should take a closer look at how existing dollars are being spent.
Also ignored by advocates of the tax increase have been the strides made in recent years to increase funding for K-12. Due to the passage of Prop 123 and action by our legislature and Governor, over $500 million in new funding has been allocated to K-12 in FY 2018. This is money above and beyond spending increases to deal with inflation, and includes dollars specifically earmarked for teacher pay raises and new building construction.
None of this probably matters to the establishment asking for the tax hike, but it does matter to hardworking taxpayers and small business owners that will be forced to pay for it. Now is not the time to saddle Arizona’s economy with a billion-dollar tax increase that is poorly conceived and unnecessary.
Rather, when it comes to education the focus should remain on how best to improve outcomes and choice, reward achievement and reform our broken school funding formulas. Focusing on these areas of concern will do a lot more good for our students than any tax increase pushed by the establishment.
Recent Comments