Mayor Greg Stanton claims that the City of Phoenix is beating the competition in attracting new businesses and jobs because of targeted tax subsidies and social progressive policies.
The Club debunks these claims and shows that any credit for job growth in Phoenix belongs to an overall business friendly environment of low-taxes and regulation in Arizona.
The Club recently shed light on the effort in Pinal County to ask voters to approve an additional half-cent transportation tax increase on top of the current transit tax. Following a series of State Auditor General reports, the existing tax—which dates back to the late 80’s—has a long recorded history of misuse and misallocation of funds. Transportation dollars have been used to give Christmas bonuses to city employees and the majority of the dollars are being allocated to the politically powerful municipalities in the county and not going toward needed regional road projects.
Due to opposition from the plan from the autodealers, homebuilders and taxpayer watchdog groups like the Club, the Pinal Regional Transportation Authority (RTA) backed off on forcing a vote on the measure and has been working to figure out how to overcome the critisism of the $640M spending spree.
Their solution? They have asked Representative TJ Shope to sponsor special legislation to allow the RTA to include lower tax rates for certain tax classifications (likely automobiles and new home sales) as part of the proposed tax increase, an obvious attempt to buy off the political opposition to secure passage of the tax hike.
It is simply poor policy to create carve outs in the tax code that pick winners and losers among taxpayers. If Pinal County leaders believe more resources are needed for transportation, they ought to look internally first, both how they have managed past funds and prioritized transportation projects. We think they would find a great opportunity for improvement. And perhaps they could save their residents a little money too.
While most people were enjoying the holidays with their family late last month, the local media was trumpeting a story declaring that Arizona has the lowest election integrity in the nation:
“Arizona was ranked worst in the country for electoral integrity in a recent post-election survey of political scientists.
The Perceptions of Electoral Integrity survey asked political experts about elections in the states where they live in order to measure their perceptions of how well or poorly their state adhered to international standards of conduct before, during and after an election.
Although it measures perceptions of electoral integrity, as opposed to actual electoral integrity itself, the methodology is widely trusted and used to compare electoral performance around the world.
The concern is that just the perception of electoral fraud or corruption, even without actual proof of fraud, could lead to a loss of public confidence in the voting process.”
While Arizona was the subject of some election controversy over the last year (the Presidential Preference Election comes to mind), being ranked dead last in election integrity should have generated some scrutiny by local journalists. Instead the media ran with the story, though a cursory look at the report and the organization behind it, the left leaning Electoral Integrity Project, would have exposed its shortcomings.
For example, the State of Michigan, which ended up having more votes cast in November than voters, somehow was ranked higher than Arizona in election integrity. Another common theme by the “experts” participating in the study was that states with stricter voter ID laws (such as Arizona and Wisconsin) consistently scored lower on election integrity than states with liberal voter ID laws like Michigan*. Though voter ID laws are controversial, including them as a component that erodes election integrity is an unfounded conclusion based upon the opinion of the authors.
Additionally, Arizona scores near the bottom on integrity when it comes to district boundaries and gerrymandering. That is a very peculiar result since Arizona has, unlike most other states, an independent redistricting commission that draws our legislative and congressional lines. Do the authors of the study (or the Arizona “experts” they talked to) have evidence of corruption on the commission that is worse than other states? Very doubtful, yet not a single reporter even questioned this finding.
Instead, the media completely accepted the work of an organization that in the past claimed that Cuba and North Korea had more election integrity than half the states in the US.
Now whether this happened because of an unwillingness to fact check or because of an underlying desire to believe the study, we will never know. And to the credit of the Arizona Republic, they are at least trying to clean up the mess. But the damage from the media coverage and the false narrative it created will continue to live on.
*Michigan passed a new voter ID law after the 2016 November Election
Yesterday Governor Ducey gave his much anticipated State of the State speech, outlining his policy and budget agenda for this year. One of the better initiatives announced is a new program to identify and eliminate job-killing regulations.
Deemed the “Regulatory Rollback” initiative, this citizen driven program allows taxpayers and business owners to recommend rules and regulations that stifle growth and either need to be fixed or repealed. Anyone can make recommendations at the website http://azgovernor.gov/redtape/
The Governor’s goal is to slash 500 regulations by the end of 2017. The Club commends Ducey’s commitment to making Arizona the best and easiest state in which to start and grow a business, and urge every resident to visit www.azgovernor.gov/redtape/ to make recommendations on regulations to be eliminated.
President Obama’s legacy is littered with sweeping Executive Orders, unprecedented levels of federal government expansion and the diminishment of state primacy. However, as the President prepares to vacate the White House, many of his hallmark policies face a dubious future. One such policy is the Clean Power Plan (CPP) written and administered by the Environmental Protection Agency.
The CPP rolled out in August of 2015 and it hit the states like a lightning rod. The plan requires states to meet specific carbon-cutting targets by 2030, based upon the levels of greenhouse gases they released from producing electricity in 2012. For Arizona, the EPA calls their goal “moderate,” however the target is to reduce 10 million short tons of emissions a staggering 25 percent.
Most of this reduction will come from coal. The draconian targets will require many states to plug smokestacks and decommission coal burning plants.
The U.S Energy Information Administration (EIA) has conducted its own modeling on the CPP. Their analysis predicts the CPP alone would force nearly 60 coal plants to close nationwide. Coal plants which since the 1990s have sunk $130 billion into upgrading their facilities. Following significant EPA rules in 2005, 67 percent of the coal fleet in the U.S had retrofitted some system for scrubbing, with momentous and positive results.
Thousands of jobs will disappear as a result of coal plant closures. But perhaps more saliently, energy production will be displaced and costs will increase to consumers. Arizona enjoys relatively low energy costs, a fact that makes the state attractive to big employers and affordable to residents. A new report by the Pacific Research Institute illustrates the CPP burden on consumers by state.
With almost a third of Arizona’s resident electricity being produced by coal, Maricopa County residents could see their electricity costs increase by 10.3 percent. Poor families will be hit disproportionally hard with costs that could equal 11.32 percent of their income. The Electricity Price Index has continued to rise with the coal losing more market share. With 48-50 million Americans in poverty, energy poverty will force many families to choose between climatizing their homes through brutal winters and summers or putting food on the table. This is why immediately following the roll out of the CPP, 28 states filed a suit against the EPA.
As the litigation and political fallout continues from these regulations, the question now is what will the Trump administration do with the Clean Power Plan? Given that the new proposed head of the EPA, Scott Pruitt, was one of the first attorney generals to sue the EPA, the hope is that the plan will be quickly dismantled. Couple that with Trump’s appointment to the Supreme Court, it is possible that we might see the EPA’s power grab struck down. Elections do have consequences, which means the future for energy freedom and state’s rights looks just a little bit brighter.
It has only been a month and the recently approved minimum wage initiative, Proposition 206, is already inflicting permanent damage on Arizona’s Economy, hardworking taxpayers and our most vulnerable and needy residents.
Similar to previous proposals, Prop 206 was sold on the idea that Arizona could raise its minimum wage to $12 an hour (adjusted for inflation every year thereafter) and require employers offer mandated paid sick leave to employees without any negative repercussions. Reading the fine print of Prop 206 exposed this fraudulent claim; as the funders of the initiative (California Unions) exempted collective bargaining agreements from critical components of the initiative. If this was so good, why exempt themselves from it?
Now the debilitating impacts of Prop 206 are being felt, and they are far more widespread and catastrophic than even the opponents of the initiative realized. While it wasn’t a secret that Arizona businesses would face hard choices in order to comply with the wage hike, some of the worst hit organizations will be those that serve the neediest and most vulnerable populations in our state.
Currently in-home care services, many of which aid fragile and feeble seniors, range from $20-$24 an hour. These services will go up; pricing out many of these seniors on fixed-incomes from receiving the care they desperately need or force more individuals onto state welfare rolls.
The developmentally disabled in our community will also be devastated by Proposition 206. According to the President and CEO of the Centers for Habilitation and member of the Arizona Association of Providers for People with Disabilities, some providers will be forced to close operations as soon as January 1, 2017.
Some of these providers have contracts with the State of Arizona that set the reimbursement rates. This means the state will be forced to allocate more taxpayer money to cover the higher costs. If the state doesn’t cough up more tax dollars to address these needs, thousands of developmentally disabled in Arizona will be left without vital care.
It only gets worse from here.
Many subdivisions of the state such as school districts will also be deeply impacted by the voter mandate. Positions such as cross walk guards cafeteria workers and bus drivers, many of which are part time positions, represent a significant aggregate cost to schools; costs which were neither anticipated nor planned for by districts or the state.
For Chandler Unified School District, Prop 206’s passage represents a $1.1 million hit to their budget. Agua Fria Union High School District in the West Valley, $123,500. Peoria Unified District – $1.1 million by 2020. And Sahuarita District in southern Arizona $907,576. These are tremendous costs which will necessitate the diversion of other resources from teachers and students or require more monies from taxpayers.
And although the law does not apply to state or federal agencies, many government departments will still be on the hook. The State of Arizona has expenditure obligations for school districts as well as private contracts through AHCCCS (Arizona Healthcare Cost Containment Center System). But the legislature has already passed a budget for 2017. These additional costs were not included in the state’s budget.
Many voters that supported Prop 206 were not aware of the harmful effects this initiative would cause. Yet unlike bills proposed and passed at the legislature, there was no independent review, hearings, or public comment process of the initiative language to inform voters of these inevitable issues.
Now, even if voters wanted these issues fixed, Prop 206 can’t be modified because Arizona initiatives are bound by the strictest voter protection law in the country. Once a measure is passed at the ballot, it can’t be changed unless it is sent back to the voters, and that can’t happen for two years.
As the saying goes, “elections have consequences.” We suspect that the consequences of Prop 206, however, are not what Arizona voters signed up for.
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