The Arizona Supreme Court Should Strike Down Taxpayer-Funded Union Release Time

The Arizona Supreme Court Should Strike Down Taxpayer-Funded Union Release Time

When you’re hired to do a job, it stands to reason that you should actually do the job you’ve been hired to do. Think about it. If a company hired you to be a writer, and you never did any writing for the company, you probably wouldn’t keep your job too long. That is, of course, unless you work for the government.

For quite some time now, federal, state, and local governments across the country—including right here in Arizona—have been engaging in the practice of “release time.” If you’re unfamiliar with this term, it means that certain people are hired to do a specific job for the government, but instead of doing that job, they are “released” to work full-time for their union. This could be someone like a teacher, for example, who instead of teaching students, spends all his or her time doing work for the teachers’ union. But here’s the thing, even though these employees don’t actually work for the government, they still get a paycheck from the government—all funded by your tax dollars.

Is this practice unfair? Yes. Is it unconstitutional? Absolutely.

That’s why the Goldwater Institute has been challenging this practice in our state in a case that has made its way to the Arizona Supreme Court called Gilmore v. Gallego. In this case, the City of Phoenix entered into a Memorandum of Understanding (MOU) with a union called the American Federation of State, County, and Municipal Employees, Local 2384, Field Unit II (AFSCME). Under the agreement, the City must provide AFSCME with the following to the tune of $499,000 annually:

    • Four full-time release positions for union members where they can engage exclusively in union activities.
    • An annual bank of up to 3,183 release time hours permitted to be used for union purposes.
    • 150 release time hours provided for union members to attend seminars, lectures, and conventions.
    • Up to $14,000 the City will reimburse the union so union members can attend employee-relations skill training.

This is outrageous! So, in support of Goldwater’s lawsuit, the Free Enterprise Club and the Grand Canyon Legal Center filed an amicus brief for two distinct reasons.

First, under the MOU, all employees are being charged the cost of the release time, whether they are members of the labor union or not. This is a direct violation of the First Amendment and the Arizona Constitution. Freedom of speech not only includes the right to speak freely, but also includes the right to choose not to speak. And in this circumstance, the City of Phoenix is forcing non-union members to pay for a union to engage in speech that they may not necessarily agree with.

Second, if the release time is being funded by the City of Phoenix, then it violates the Arizona Constitution’s Gift Clause, which prohibits the government from giving money to private organizations without getting something in return. Clearly, release time does not serve a public purpose. In fact, the unions actually bargain on behalf of the private financial interests of government employees against the public. As a result, the government employees may receive a benefit in the form of a higher salary, but taxpayers receive no such benefit. Instead, taxpayers only receive higher taxes.

For both these reasons, the Arizona Supreme Court should strike down this illegal practice in our state. No government employee should be getting paid to conduct union work. Instead, the state’s highest court should restore some common sense and ensure that government employees are only paid to perform the duties of the jobs they were hired to do.

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Katie Hobbs Broke the Law to Take Credit for the Republican Tax Rebate

Katie Hobbs Broke the Law to Take Credit for the Republican Tax Rebate

If you look up “failure” in the dictionary, it’s probably only a matter of time until you start seeing images of Katie Hobbs’ time as Governor of Arizona. Hobbs kicked off her reign back in January and immediately got off to a rocky start. After being in office for just over a month, Hobbs had her inauguration fund called into question, had her pick to lead the Arizona Democratic Party rejected, and was booed at the 16th Hole of the Waste Management Phoenix Open.  

If that wasn’t enough, Hobbs’ nominations for agency directors have been a complete disaster. Her pick to lead the Department of Health Services, Dr. Theresa Cullen, was rejected for her COVID imperialism. Her nominee for Housing Director was rejected due to a history of plagiarism. And she was forced to withdraw her nominee for Arizona Registrar of Contractors, former Democratic State Senator Martín Quezada, over his alliance with antisemitic extremism. It’s no wonder why Hobbs was listed as one of the least popular governors in the nation.

That’s probably why Hobbs is willing to do anything she can to get some good publicity, but her latest stunt was another misfire…and broke the law.

At the end of October, Hobbs tweeted out a message patting herself on the back for putting money back in the pockets of many Arizona families. Her administration then followed that up with a letter from the Arizona Department of Revenue (ADOR) that directed families who would be receiving the tax rebate to the Governor’s website.

But there were a couple of problems.

The Arizona Families Tax Rebate Program was spearheaded by a group of Republican lawmakers known as the Arizona Freedom Caucus, and Hobbs wanted no part of it as it made its way through the legislature. On top of that, when SB1734 was passed and eventually signed by Hobbs, the bill included a line stating that no letter relating to the rebate should be sent from the Governor’s office, be sent on the Governor’s letterhead, or reference the Governor’s office.

Whoops…maybe Hobbs should use that private school education she received to actually read the bills she signs. Or maybe she’s just another Democrat opportunist looking to take credit for the work of Republicans.

The fact of the matter is that, before becoming Governor, Katie Hobbs had a history of opposing tax cuts for families while making it a habit to support multiple tax hikes. And the initial budget plan she released back in January was one big liberal wish list that would’ve required more money out of the pockets of Arizona taxpayers. But thankfully, the Republican-led legislature recognized that after three years of Democrat control of the federal government, Arizona families needed relief from the rising cost of gas, groceries, housing, and energy. So, at a time when the government has been flush with cash, they got to work on a structurally balanced budget that returns nearly $300 million to hardworking taxpayers.

It’s a great idea, which is probably why Katie Hobbs wants to take credit for it. But instead, she chose to break the law—hanging ADOR Director Robert Woods out to dry and leaving him potentially liable for $2 million in illegally spent funds, a 20 percent penalty, court costs, and attorneys’ fees. While Hobbs did eventually cave by editing the remaining tax rebate letters after Senator Warren Petersen and House Speaker Ben Toma sent her a cease-and-desist letter, the damage had already been done. And it’s just another failure in a year that’s been filled with them for Arizona’s Democrat Governor.  

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Democrat Spenders Blame Tax Cuts and School Choice for Budget Shortfalls

Democrat Spenders Blame Tax Cuts and School Choice for Budget Shortfalls

Last week, the Joint Legislative Budget Committee (JLBC) released an updated state revenue forecast showing that Arizona may be facing a $400 million budget shortfall next year. And as predictable as the sun rising in the East, Democrat politicians and their friends in the media went on the attack, blaming the deficit on two historic reforms despised by the left—universal school choice expansion and the 2.5% flat tax cut passed in 2021.

For the Democrats and their sycophant media allies, the problem is always too much parental choice in education and letting taxpayers keep more of their hard-earned money. Yet this narrative couldn’t be further from the truth. A closer look at Arizona’s budget and the projected budget deficit reveals that we have a spending problem, not a revenue problem.

Projected Budget Shortfall Is a Spending Problem

Just 5 years ago, the legislature enacted the FY 2019 budget that included $10.1 billion in on-going spending, plus $500M in “one-time” expenditures ($10.7 billion total). By last year, that number had exploded to nearly $15 Billion in ongoing spending, a 50% growth in ongoing spending in 5 years! The most recent budget negotiated with Democrat Katie Hobbs earlier this year kept ongoing spending at a lower trajectory but included “one-time” outlays that brought the total budget cost to $17.8B.

The truth is that Arizonans continue to be overtaxed. And even with the largest tax cut in state history, tax revenue has continued to climb, largely due to the decision by state lawmakers in 2019 to start taxing online sales. That one change in our sales tax collection has resulted in BILLIONS in new revenue for state and local governments.  Yet the media and the left only want to talk about the income tax cut, not all the tax hikes Arizonans have endured.

Record Levels of K-12 Spending

Along with bashing our much-needed income tax cuts, the left has targeted school choice as the other culprit for the budget deficit. Since universal expansion was enacted last year, Empowerment Scholarship Accounts (ESAs) are now providing over 60,000 families the freedom to make educational decisions for themselves, instead of being locked into government schools. According to the teachers’ union and math-challenged educrat organizations, ESAs are costing the state hundreds of millions of dollars and diverting funds from district schools.

Conveniently left out of their analysis—Arizona taxpayers are giving district schools more money than ever before, by a long shot. Public school funding has soared to $15K per student, up from $10k just five years ago.

In fact, the legislature had to vote this year (for the second year in a row) to override the constitutional expenditure limit for government schools. This spending limit was overwhelmingly supported by voters to protect against runaway spending. The waiver this year, which requires a 2/3 majority to authorize, was to the tune of $1.4 billion, more than three times the potential budget shortfall.

As for the claim that ESAs are costing taxpayers hundreds of millions of dollars, the reality is the opposite. According to an excellent analysis by Matt Beienburg at the Goldwater Institute, ESAs represent only a tiny fraction of all K-12 school spending, and taxpayers actually save money when a parent decides to leave a district school to attend a charter or private school.

Additionally, during COVID the federal government was spending trillions of dollars racking up the federal debt and inflation. That has thrown off budget projections nationwide, and most states are now seeing a slowing of tax revenue leading to potential deficits.

Budget Deficit Presents Opportunity for Long Overdue Spending Restraint

The current budget volatility Arizona is experiencing shouldn’t be that big of a surprise to anyone who has been following local and national trends. State governments around the nation are dealing with volatile budget projections, falling tax revenue, and widening budget deficits. And in every case, runaway spending has been the culprit.

So, the solution is simple: reduce spending to be more in line with what population and inflation growth has been over the last five years. Republicans did the best they could with Katie Hobbs on the 9th Floor, who vetoed their first fiscally responsible budget proposal. We don’t expect Hobbs and her spend happy allies to be any easier to work with next year, so fiscal hawks in the legislature will have their work cut out for them.

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Taxpayer Subsidies for Hollywood Are Coming Back to Haunt Arizonans

Taxpayer Subsidies for Hollywood Are Coming Back to Haunt Arizonans

“Don’t California our Arizona.” It’s a saying we’ve had around here for quite some time, and for good reason. Not only is California known for having ridiculously high tax rates, but woke policies in the state have:

    • Banned the sale of gas-powered cars by 2035.
    • Banned all natural gas appliances (like the gas stove) by 2035.
    • Led to an increase in smash-and-grab robberies after Prop 47 more than doubled the felony threshold for petty theft and shoplifting.
    • Dramatically increased homelessness despite throwing billions of dollars at the problem.
    • Led to rolling blackouts during historic heat.

The list could go on and on. But it’s pretty clear. California’s policies have been a disaster, so much so that the state once ran out of U-Hauls because so many people were leaving. And yet, despite all this, Arizona lawmakers still decided to send your hard-earned dollars to woke Hollywood liberals through a movie tax credit bill last year. And while we hate to say we told you so, that decision now appears to be coming back to haunt Arizonans.

Earlier this week, it was announced that DreamWorks Animation CEO Jeffrey Katzenberg’s political operation will be joining forces with Arizona Governor Katie Hobbs to launch a PAC here in our state. And what is the PAC’s primary goal? Making sure Democrats win control of our state legislature! And you can be certain that Hobbs will gladly reward her woke allies in Hollywood with your tax dollars—all the while fighting to stop Arizona’s kids from receiving $7,000 to pursue an educational experience that works for them.

This is the exact reason why the Club fought so heavily against the movie tax credit bill (HB2156) in the first place. The legislation gives movie companies refundable tax credit subsidies up to 15 percent if they spend up to $10 million in productions costs, 17.5 percent if they spend between $10 million and $35 million, and 20 percent if they spend over $35 million. Plus, there’s an opportunity for an additional 2.5 percent if the movie company meets other criteria. With the average cost of making a movie over $100 million, that means the vast majority of movie companies will benefit from the highest possible percentage.

So how much of your tax dollars will be given away to liberal movie studios like DreamWorks that want to turn Arizona Blue?

    • $75 million in 2023
    • $100 million in 2024
    • And $125 million in 2025 and each year thereafter

But our state has to be getting jobs or something else out of this, right? Wrong. Countless studies on Hollywood subsidies conducted by both liberal and conservative economists have concluded that these tax credit schemes are a ripoff. One recent study found that despite $10 billion in taxpayer spending, there was no statistically significant impact on employment. Womp…womp…

That means the only thing Arizonans have to look forward to thanks to this ridiculous piece of legislation is Hollywood liberals like Jeffrey Katzenberg leveraging cash from Arizona taxpayers to push their woke agenda and elect Democrats. All while making movies bashing America using our state as the backdrop.

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Pinal County Needs to Refund the $80 Million It Illegally Collected from Taxpayers

Pinal County Needs to Refund the $80 Million It Illegally Collected from Taxpayers

If someone in the private sector illegally took money that didn’t belong to them and then refused to return it, what do you think would happen? They could be heavily punished with fines. They could face sanctions. They could even end up in jail, depending on the offense.

But for about a year and a half, Pinal County has been allowed to drag its feet in refunding $80 million that it illegally collected from taxpayers. It’s just another example of government officials who think they are above the law.

This all started back in 2016 when Pinal County officials proposed a $640 million transit tax hike to voters in order to fund a wide array of transportation projects throughout the region. But after unveiling the plan, the county faced strong opposition from retailers, home builders, auto dealers, and multiple taxpayer watchdog groups.

This should’ve been enough for county officials to recognize that the community didn’t support their proposal. But they were too committed to their scheme. So, what did they do? They developed a new plan to buy off their political opponents by adding a special carve-out for purchases that exceeded $10,000 from paying the new tax. That’s a bold strategy, isn’t it? It’s also illegal.

Because the new tax would only apply to retail sales below $10,000, it meant that the day-to-day purchases of lower-income citizens would be more heavily taxed than more expensive items. But capping the tax in such a way isn’t authorized by Arizona statute. That’s why the Goldwater Institute—supported by the Club every step of the way—challenged the Pinal County transportation tax in court. And in March 2022, the Arizona Supreme Court ruled against the tax in a big win for taxpayers.

That should’ve been the end of it. Pinal County officials should’ve immediately begun working on a plan to refund the money to taxpayers. And yet, nothing but crickets for the past 18 months. The reality is that the Arizona Department of Revenue and Pinal County haven’t taken any steps to even allow people to apply for refunds. And at the end of last month, ADOR announced that it was pausing any plans to send the money out because it did not receive clarity from Pinal County on how to do so.

This is outrageous! And more than likely, it’s completely by design. Pinal County officials think that if they delay long enough, they will be able to keep the $80 million. After all, they had a bill introduced during the last legislative session that would have allowed them to do just that. That bill went nowhere, just like the illegally collected taxpayer money the county has been holding in an interest-bearing escrow account.

Now, the Goldwater Institute has gone back to court to force the refunds to occur. And once again, the Club will support this effort by whatever means are necessary. Pinal County officials had no right to take this money. And they certainly have no right to keep it. Taxpayers are legally entitled to these refunds. And if Pinal County refuses to do the right thing, it’s time for the courts to step in and force them to.

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AZ Republic Rescue Attempt of MAG Prop 400 Plan Won’t Work

AZ Republic Rescue Attempt of MAG Prop 400 Plan Won’t Work

The Prop 400 package put together by the Maricopa Association of Governments (MAG) is in serious trouble at the legislature, and Katie Hobbs and the transit lobby knows it. So, in a desperate attempt to rescue their defective plan, they have phoned a friend to see if a little legacy media pressure will improve their flagging fortunes at the Capitol.

In recent weeks, the AZ Republic has unleashed a torrent of articles and opinion pieces attempting to scare the legislature into sending their transit slush fund package up to Hobbs’ desk. Most of their writings have been nothing more than recycled talking points from MAG and transit industry lobbyists attacking conservative lawmakers and critics (like the Club) for opposing a plan that slashes freeway funding and increases traffic congestion in the region.

A couple weeks ago it was in the form of an editorial that claimed to disprove our Prop 400 criticism by “relitigating” the merits of bus and light rail and proving its value in the region. And now over the weekend, their opinion writers couldn’t race out fast enough to promote the press release issued by Katie Hobbs and the transit lobby that the legislature needs to adopt a fake “compromise” MAG plan.

In short, their efforts to “relitigate” the merits of transit or to declare that there is any type of “compromise” only demonstrate how radical their position really is.

Here are just a few examples of how the Republic has veered from journalism to being nothing more than a lobbying arm of the transit lobby:

There Is a Compromise? With Whom?

Over the weekend a choreographed social media blitz was launched by Katie Hobbs and MAG, with their allies at the Republic eagerly playing along. They claimed that Republicans are refusing to move a “compromise plan” that made over 30 concessions, including reductions in light rail spending.

It sounded great, except for one problem: their compromise plan is no different than the plan vetoed by Governor Ducey last year.

That “big concession” about taking light rail out of the plan? What a farce. Light rail expansion isn’t going away, their plan just shifts bus expenditures from municipalities to the regional tax, which then frees up city money to pay for the rail.

These type of cheap accounting tricks are not surprising to those that have been engaged in the Prop 400 debate at the legislature. MAG and the transit lobby have been adamant for over a year that they won’t negotiate, and that their Momentum Plan cannot be altered. Don’t believe us, just watch one of the MAG transportation meetings from the last couple of months where they have restated this position on several occasions.

And given that intransigent position, it is easy to see why they ran to the Republic to reframe the narrative by peddling their bogus compromise.

Does the Republic Know That Transit Ridership in Metro Phoenix Has Collapsed?

On several occasions the Republic has bragged about transit ridership in the region, even boasting about “32 million annual rides on public transportation.”

One wonders if they even know what that figure represents, because that averages out to only 40,000 people a day using transit in the region, in a metropolitan area of 5 million residents. One 4-lane arterial road will carry more people on a given day than ride a bus or take the light rail.

Also conveniently missing from the Republic editorial is that transit ridership has been in decline for over a decade and fell off a cliff during the pandemic (ridership is still half of what it was pre-pandemic). There are now fewer people riding transit today than were riding in 2005, before 33% of the Prop 400 tax was diverted to transit. Voters were promised twenty years ago that spending billions on light and bus would increase transit use, yet the opposite has occurred, all while the region grew in population by over 1.5 million residents.

Other Cities Waste Billions on Transit Too!

The Republic has also taken the time to point out that “other top 10 metropolitan areas in the country all support buses and rail…in equal or greater magnitude.”

This analysis of course leaves out two important details:

  1. Virtually every metropolitan area with a large transit system is on the verge of bankruptcy and is seeking massive taxpayer bailouts. Valley Metro is facing a similar fiscal cliff, which is why a large portion of the MAG plan is dedicated to making their bankrupt system solvent.
  2. The only transit systems not going bankrupt have either imposed performance metrics or are using private operators that are interested in making a profit. Right now fares being collected by Valley Metro are covering only 7% of the cost to operate our buses and light rail. In 2005, they promised voters that fare recovery would be at least 30%. Promises made, promises NOT kept.

Prop 400 Funds Roadway Repairs and Maintenance? Spoiler Alert: It Doesn’t

Another argument promoted by the Republic editorial board is that “a big chunk of Prop 400 proceeds—42% of the projected $14.9 Billion—are to repair and maintain our freeways and roads.” They proceed to state that the entire debate over 400 is “an indictment not of local or regional planning but of the legislature…if the obstructionists at the Capitol truly want to fix potholes and service freeways and streets, then they put their own house in order and raise the gas tax.”

This criticism would be scathing if any of it were true. All of the funding for maintaining and repairing our freeways comes from the state HURF monies and federal dollars. Every dime of that funding is legally required to occur irrespective of Prop 400 moving forward or not.

It’s understandable for someone that is unfamiliar with Prop 400 to make this mistake. But the Republic should know how 400 works, specifically that the proposed tax is slated to only be used toward new freeway and roadway projects.

Clearly they don’t, especially since they proceed to argue that major freeway projects like expanding the I-17 and I-10 should be paid for by the state through a gas tax increase. Really? The only reason the tax exists is to build freeways! MAG’s proposed 400 plan slashes freeway funding by 30%, and the Republic thinks that is a big win for motorists.

MAG Will Only Have Themselves to Blame if 400 Is Not Extended.

Republicans at the legislature aren’t interested in the funding gimmicks or fake concessions promoted by MAG, which is why no agreement has been reached. And now we are nearing the end of the legislative session, which means MAG is running out of time if they want a Prop 400 plan passed at the Capitol.

If they are really interested in seeing something get done, the transit lobby needs to accept that significant changes need to be made to their plan, and no amount of editorials from the Republic is going to change that reality.

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Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

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