Election Consolidation for Sales Tax Increases is a Long Overdue Reform

by admin | Mar 16, 2017 | News and Updates

The Club has long been a proponent of consolidated elections, by which all elections are held in August or November of even numbered years. The purpose of consolidating election dates is to increase voter participation and to end the practice by some local governments of holding elections in March or May in order to avoid much needed scrutiny.

The first step toward this goal occurred in 2012 when the legislature passed HB2826 that required municipalities to hold candidate elections on the same dates as statewide elections. The increase in voter turnout was immediate:

• In the three election cycles prior to candidate election consolidation, voter turnout in Maricopa County never exceeded 26%, with average turnout around 20%.
• After consolidation in 2014 and 2016, Maricopa County turnout was never below 26% and was as high as 74% in the most recent election.

Increased voter turnout is one benefit of reform.  Consolidated elections save tax payers money.  When cities hold theirs separate from the state they incur significant additional expenses in printing, voter education, notifications, facilities and staff costs, and postage.  The City of Scottsdale moved to consolidate their elections two years prior to the state enacting its legislation.  For them it was dollars that made sense – after amending their charter to consolidate their election in 2008 – the city saved their residents $110,000 in their 2010 election.

Given the proven success of higher voter participation and lower costs with the 2012 reforms, Representative Kevin Payne (D21) introduced HB2495, which would require that any proposed sales tax increase be voted on consolidated election dates as well.  In other words, if a city desires to increase their local sales tax, the vote would have to occur in November of even numbered years.

Opponents to reform (local government and various special interests) cite the same arguments against consolidation that they have used for years. Moving elections mean local issues will compete for time, attention, resources, and ballot real estate with state and national races and matters.  That somehow voters are better served when they can study these issues in isolation and are not “fatigued” by a long ballot, perhaps abandoning the “local issues” at the bottom of the ballot.

They are now using the bizarre claim that HB 2495 would imperil local government if there is an emergency and a new tax hike is needed.  Aside from the general absurdity of an “emergency tax,” cities already have the authority to pass a tax increase without voter approval by a majority vote of their elected body.  Mayors and Councilmembers, if they truly believe a tax increase is necessary, are free to vote for one, devoid of the political cover of “the will of the voters.”

Consolidated elections have been studied by historians, scholars and policymakers across the political and ideological spectrum, all reaching the same conclusion.  Off-cycle elections in practice (and by design) reduce voter turnout and benefit organized special interest groups.  No matter the political bent, organizations who stand to benefit most, are strategically served by low voter turnout.  Organized groups are more likely to know about an off-cycle election that enriches themselves and their turnout has a much greater general impact on the overall election.

HB2495 is good public policy and deserves a YES vote.  Consolidated elections have proven time and again to increase voter turnout, reduce costs and provides predictability and consistency to voters.

Truth Revealed About Coyotes Unconstitutional Subsidy Game

by admin | Mar 14, 2017 | News and Updates

As was reported last week, the Arizona Coyotes and the NHL sent a letter to the State Legislature notifying lawmakers that if they do not agree to provide $225M in taxpayer money for a new hockey arena, they are going to leave Arizona for icier pastures.

The shakedown letter was an astonishing (some would consider desperate) maneuver by the team and the NHL, especially since it exposed the truth that the Arizona Coyotes have been intentionally misleading Glendale taxpayers and elected leaders for over a decade in order to receive unconstitutional subsidies from taxpayers.

This fact was not lost on former Mayor Elaine Scruggs, who penned a scathing letter detailing the history of the Coyotes in Glendale.  Throughout her two page response, Mayor Scruggs cited each broken promise and dishonest claim made by the team as the city poured an estimated $500 million dollars of taxpayer money into the failed endeavor.

For several years, the NHL and Coyotes repeatedly told anyone that would listen that hockey was an economically viable product in Glendale and that the team was not receiving hidden subsidies to cover its operating losses.

The ownership group was well aware of the constitutional, legal, and political issues of a professional sports team receiving direct subsidy payments from taxpayers. In 2010, the Goldwater Institute threatened to sue the city for violating Arizona’s gift clause when it was considering a deal to cover up to $100M in losses if the team didn’t turn a profit. That deal subsequently collapsed.

Three years later a new ownership group came on the scene and negotiated behind closed doors a lucrative 15 year, $225 Million “management agreement” with Glendale.  The team and the city stated publicly that it was a reasonable agreement to operate and manage the taxpayer-financed arena, and was not a clever trick to do an end run around the gift clause.

Now the truth is out. The one-sided agreement was never about managing the arena.  The Coyote’s claims since Glendale lawfully terminated the agreement have been, by their own admission, proven false.  They were not being “evicted” by Glendale or being forced to accept substandard management of the arena. The Coyotes were just mad that they had foolishly violated state law and had the subsidies cut off.

And now the Coyotes and the NHL are pushing Senate Bill 1149, legislation that would give the team 30 acres to develop a taxpayer subsidized arena, hotel, restaurants and bars. They are trying to lure another city into a deal that will keep the subsidies flowing. The Club’s recommendation to taxpayers: you see the Coyotes coming, skate for the exits.

Legislators Say ‘No’ to Refundable Tax Credits

by admin | Mar 2, 2017 | News and Updates

Legislators Say ‘No’ to Refundable Tax Credits

THANK YOU to the legislators who voted on the floor today to oppose HB2492 – a bill that would allow a few large corporations to make their R&D tax credits refundable.

Civil Asset Forfeiture Violates Private Property Rights

by admin | Feb 15, 2017 | News and Updates

Imagine a scenario where the government can take a private citizen’s property they suspect was involved in a crime without ever having to charge anyone for a crime.

Before one assumes we are speaking of some foreign country, this is the legal reality of civil asset forfeiture in the United States.

In Arizona, civil asset forfeiture allows law enforcement to seize property they believe is involved in a crime and then take that property through a civil proceeding.  And because forfeiture operates under the premise that property itself can be guilty of a crime, it has produced a barrage of strange case names such as “Nebraska v. One 1970 2-Door Sedan Rambler” and “State of Texas v. One Gold Crucifix.”

Civil forfeiture became prevalent in the U.S during the 1980’s as a part of the “War on Drugs.”  It was a means to relieve big drug kingpins of the means and spoils of their crimes.  However, the use of asset forfeiture by law enforcement quickly expanded to targeting of lower value assets and currency, calling into question whether the activity is motivated by stopping crime or financial gain.  Some in law enforcement, such as the City Attorney for Las Cruces, New Mexico, described asset forfeiture as “a gold mine.”

According to the Institute for Justice, Arizona ranks as one of the worst states, earning a D- for abusive forfeiture laws.  The state’s dismal score is due to several areas of the law that create a disincentive for innocent owners to fight the government to recover their property.

Fortunately, reform to Arizona’s forfeiture laws is on the horizon.  A broad coalition of organizations and citizens have come together to propose HB2477, sweeping civil asset forfeiture reform sponsored by Representative Eddie Farnsworth (District 12).

HB2477 would make key changes to the current law:

• Raises the burden of proof required of law enforcement to seize property
• Makes claimants eligible to recover attorney fees when they prevail in court. Currently claimants are not only prohibited from recovering legal fees but are liable to pay the government’s attorney fees;
• Creates third party accountability for the expenditure of forfeiture dollars;
• Requires substantial reporting to make the type and value forfeitures transparent to the public and policy makers – including when forfeitures don’t result in a criminal conviction;

This legislation is a long time coming for Arizona.  Shocking abuses of civil rights and shady uses of funds are a current reality.  Cases such as Cox vs Voyles in 2013 demonstrate how innocent third party property owners are easily captured and trapped by a system that is tipped to favor government.

Pima County has had its fair share of scandal when it comes to flagrantly conflicted expenditures of forfeiture monies.  Navajo County recently seized a vehicle from an elderly couple from Washington and only returned it after Institute for Justice filed suit.  Former Maricopa County Sheriff Joe Arpaio used forfeiture dollars for a questionable trip to Honduras as well as to lease high-end vehicles for top management.

Even former Pinal County Sheriff Paul Babeu abused the program when he used RICO funds to write checks to a non-profit housed within his office and to pay for a political mailer sent to registered voters six months prior to a Republican Primary.

Civil Asset Forfeiture in Arizona is in urgent need of reform. The current system is a threat to property rights and must be rectified.  HB2477 would be a substantial step in the right direction – now it’s in the hands of lawmakers and the Governor to do what’s right.

SB1212 Shark Tank Bill Subsidizes Risk for Wealthy Investors

by admin | Jan 31, 2017 | News and Updates

There is much discussion among lawmakers and the Governor this year about how we will prioritize the many needs of the state.  Education – all day kindergarten, universities, and k-12 – all want a piece.  Then there are the requirements of the State to back fill the financial fallout of Prop 206 in the way of increasing funds to developmentally disabled car providers.

Amid all these constituents who are making their case for additional money – one hand out should raise a lot of eye brows.  And that’s the hand (probably dressed in a very expensive suit) of some venture capitalists in the state.

SB1212, the ‘Angel Investor Tax Credit Bill’, is not as sweet sounding as its Orwellian assigned name indicates.  A more apt name would be to call it the Shark Tank Bill because of its many similarities to the hit TV Show, with one difference: wealthy investors get a tax credit for making their risky venture capital investments.

Under the bill government employees at the Arizona Commerce Authority will dole out tax credits to “qualified” investors to hedge their potential losses in risky new start-up companies.  The argument made to defend the program is Arizona needs the tax credits to attract more investors into Arizona and that without them, good ideas in Arizona won’t find capital.  This of course is not true.  Good business ideas and plans can always find money to get off the ground because investors stand to gain millions of dollars in profit to do so.

The reality is, if a business is unable to attract the start-up capital it needs, perhaps the venture is not seen as viable, or scalable or profitable enough.  If that is the case, why would taxpayers be expected to flip the bill for it?  After all, we don’t stand to benefit monetarily from the businesses’ success, why should we therefore shoulder the losses of its failures?  And if a business was to attract the necessary start-up capital regardless of the tax credit, why are taxpayers subsidizing a business activity which would have occurred anyway?

Venture capital investing is inherently risky.  Successful speculations have the potential to enrich their investors immensely.  However, it is the risk itself and the profit motive which tempers the activity, and incentivizes investors to be prudent.  The Arizona Commerce Authority is not better equipped than the free market to facilitate these types of transactions.

Taxpayers should not be in the business of subsidizing risky venture capital investments by wealthy investors. It’s a program that picks winners and losers among taxpayers, among venture capital investors, and among aspiring entrepreneurs.

Lawmakers should continue to stay out of the venture capital business and reject SB 1212.