Senator Sinema Should Stand with the People of Arizona and Reject the Inflation Reduction Act

Senator Sinema Should Stand with the People of Arizona and Reject the Inflation Reduction Act

This week could be the most consequential of Senator Kyrsten Sinema’s tenure in Congress.

Right now, she faces immense pressure from both sides to either accept or reject the recent deal Senator Joe Manchin and Majority Leader Chuck Schumer cobbled together. The so-called “Inflation Reduction Act” is the latest iteration of the long-sought-after “Build Back Better” plan that President Joe Biden touted more than a year ago.

While the name sounds like a good idea, it’s a complete disaster. The bill itself continues to push Green New Deal policies that will lead to even higher prices at the gas station and grocery store. That’s not exactly helping with the inflation reduction that they’re hyping.

In addition, it seeks to expand government-run health plans, allow the government to negotiate the cost of drugs, and create a slush fund for the IRS that would allow them to add 87,000 new agents. But perhaps worst of all, the bill is a significant tax increase.

The Joint Committee on Taxation scores the bill as raising taxes on nearly every American worker. This breaks President Biden’s promise that no family earning less than $400,000 would pay more in taxes. On top of that, it raises more than $16 billion from those earning less than $200,000 and another $14 billion on those earning between $200,000 and $500,000.

And they’re trying to do all of this in the midst of a recession!

Naturally, progressives are privately complaining that the bill does not go far enough in advancing their radical agenda, especially as it relates to climate change. But they are happy to have something. Now, that has put the pressure on Sinema to support the deal. And it’s increasing by the minute.

Since being elected, Sinema has remained largely independent on budget and tax issues, including on the Build Back Broke agenda pushed by Biden. And while she has frustrated both Republicans and Democrats, she’s mostly drawn the ire of leftist progressives who have been calling on her to be primaried in 2024.

But if Sinema wants to keep her seat, she should focus on siding with the people of Arizona on these issues. So, what do they say?

Recent polling shows that a majority of Arizona voters would prefer that Sinema reject the Manchin-Schumer package. 53% say she should vote no on the bill while 50% of voters say they would be less likely to vote for her if she supports the deal.

At a time when 58% of Arizonans believe that inflation is the worst in their lifetimes—and a whopping 63% of Arizona voters say they oppose raising taxes in a recession—now is not the time to raise taxes.

But it’s not just the taxes that the people of Arizona are concerned about.

They don’t want the government negotiating the cost of drugs. Only 14% of voters support this idea while 52% prefer point of sale discounts for seniors buying prescription drugs. And who can blame them? They can clearly see who stands to benefit from such a negotiation, and they know it’s not the people.

Now, this whole entire bill may rest on the shoulders of Arizona Senator Kyrsten Sinema. Will she continue to represent Arizona voters? Or will she cave to the progressive special interests in Washington, D.C.? If she wants to see her tenure extended in 2024, Sinema should remember who she signed up to stand for.

Tell Your US Senators to Vote NO on the Inflation Reducation Act

Renaming the Build Back Broke bill the “Inflation Reduction Act” won’t change the fact that it’s a massive tax and spend agenda that will make our economy worse, not better.

Now it’s time to tell your US Senators, Mark Kelly and Kyrsten Sinema, to oppose this deal. Gas prices are high, inflation is soaring, and Arizona families and small businesses are struggling. We can’t afford more DC spending, tax hikes, corporate welfare, and an IRS that will target hardworking Arizonans. Tell your US Senators to vote NO on the “Inflation Reduction Act!”

Arizona’s Movie Tax Credit Bill Is a Major Loss for Taxpayers

Arizona’s Movie Tax Credit Bill Is a Major Loss for Taxpayers

If you like forking over your hard-earned dollars to woke Hollywood liberals, Arizona lawmakers have you covered.

Last month, the state legislature took on the role of “Minions” for the film industry. As you may recall, the Club previously fought against a movie tax credit bill known as SB1708. After passing the Senate, it failed in the House. But in a shady move, Senate Appropriations Chairman David Gowan resurrected the effort through a strike-everything amendment to HB2156, declaring that Hollywood subsidies were his top issue in budget negotiations and any budget agreement was contingent on its passage. A few days later, the bill passed when a handful of Republicans joined every Democrat to support it. Governor Ducey allowed the bill to become law without his signature on July 6th.

The legislation itself gives movie companies that film in Arizona refundable tax credit subsidies up to 15 percent if they spend up to $10 million in production costs, 17.5 percent if they spend between $10 million and $35 million, and 20 percent if they spend over $35 million. And it gives the opportunity for an additional 2.5 percent if the movie company meets other criteria.

But consider this. The average cost of making a movie is between $100 million and $150 million. That means the vast majority of movie companies will benefit from the highest possible percentage!

So, how much Hollywood corporate welfare will Arizona taxpayers be on the hook for?

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

Can you believe it? In the midst of historic inflation and a struggling economy, our lawmakers decided it was a good idea to send your money to a billion-dollar industry that doesn’t even need it! (Not even Maverick can save this disaster.)

Those that argued in favor of this bill claim that it will promote workforce development and expansion of the movie industry. But they must have missed the recent study of Hollywood subsidies in New York, Louisiana, Georgia, Connecticut, and Massachusetts. (Or maybe they’re living in “La La Land.”) It found that despite $10 billion in taxpayer spending, there was no statistically significant impact on employment.

That’s right. These programs don’t work. They consistently lose money, and the Joint Legislative Budget Committee already projected that this bill would cost the State of Arizona hundreds of millions of dollars!

On top of all this, the legislation is likely unconstitutional, and litigation is inevitable. The Arizona Supreme Court ruled in 2021 that the government cannot include “anticipated indirect benefits” such as projected sales and tax revenue as part of the consideration with a private party under the Gift Clause in the Arizona Constitution. In other words, Hollywood dazzling lawmakers with projected economic development leading to increased tax revenue is an “irrelevant indirect benefit” that can’t be included in the consideration.

But perhaps worst of all, we can now expect to see our tax dollars being used to create movies bashing America and our values. That’s become Hollywood’s specialty in recent years. And now because of this bill, it will all be done with the State of Arizona serving as the backdrop.

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Transit Tax Increase Earned a Well-Deserved Veto

Transit Tax Increase Earned a Well-Deserved Veto

Governor Ducey made the right decision vetoing HB2685, the Maricopa County transportation sales tax increase that was forced through the House and Senate during the final days of the legislative session.

But the reality is, it never should have gotten to his desk.

HB 2685 typified everything that is broken at the Capitol these days: a swampy political culture built around cronyism and backroom deals, legislative leadership pushing major policy through despite overwhelming opposition from their own caucus, and a complete breakdown in statesmanship, evident by the fact that most Republican lawmakers that supported the bill never actually read it or the MAG transportation plan that underpinned the legislation.

It is highly unlikely that a bill like this would have even received a committee hearing five years ago. HB 2685 completely rewrote transportation policy for Maricopa County, shifting billions away from roads and into transit and a regional program slush fund. Yet the bill was rammed through the process from beginning to end, with advocates taking the arrogant position that no real changes could be made to the bill.

Thankfully, Governor Ducey didn’t go along with this charade. He rejected their absurd “take it or leave it” offer and plan, and outlined in his veto letter the multiple problems with HB 2685:

    • The bill lacked transparency and was in fact intentionally misleading. They doubled down on putting their thumb on the scale by requiring the election be held in the Spring in an off-year election cycle when voter turnout is historically low.
    • The bill decreased funding for freeways.
    • The bill did not capture needed projects, some of which had to be appropriated directly by the legislature in a $1B transportation infrastructure package.
    • The transportation tax does not expire until the end of 2025; so, there is no reason to extend the tax now, especially during a time of record inflation when taxpayers are hurting.

Our organization and others opposed to the bill brought up every single one of these points and several others. Each concern was summarily ignored, claimed to be a lie, or turned into hostile gaslighting and ad hominem attacks against opponents of the bill. Proponents took our fact sheet and disseminated a “struck through” version which did not even attempt to counter our information or provide alternative sources. Lawmakers and proponents actively shared explicitly inaccurate information about a bill they purportedly drafted. These bad facts would spread like wildfire at the Capitol, even though they could be easily resolved by simply reading the bill (which again, most lawmakers that supported the bill did not do).

HB2685 was truly Build Back Broke transportation policy, prioritizing money for little-used transit, siphoning dollars from roads for cities to expand bike lanes and trollies, and neglecting the maintenance for freeways and arterials. This was reflected in the lack of support by a majority of Republicans in both chambers, with 21 of 31 Republicans in the House voting against the transit tax.

Yet Republican leadership and the sponsors of the bills did not seem to care they were passing Democrat transportation policy. This as the backdrop of Biden’s Build Back Broke money and policies enraged Republicans across the country. This, as progressive leftists across the state praised the measure.

None of this was normal, and it should be a lesson.

Things are broken at the Capitol, and they are due for a shake-up. And even though the transit tax increase bill should never have made it in its final version to the Governor’s desk, perhaps its veto will be the beginning of better transportation policy to come. It’s hard seeing it get any worse.

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Arizona’s State Budget Proves That MAG’s Proposed $70 Billion ‘Momentum’ Plan Is a Complete Failure

Arizona’s State Budget Proves That MAG’s Proposed $70 Billion ‘Momentum’ Plan Is a Complete Failure

State taxpayers should not be bailing out a broken Maricopa Association of Governments (MAG) plan. But that’s exactly what lawmakers are doing in the recently enacted Arizona state budget. That’s right. Your elected leaders just passed a budget that includes hundreds of millions of dollars for road projects—all being paid for with your tax dollars. (You can see for yourself on pages 9-11 right here.)

At first glance, that probably doesn’t seem like a big deal. After all, it makes sense for tax dollars to go toward necessary road projects. But the problem is that these road projects are supposed to be paid for by the Maricopa County Prop 400 regional plan that was assembled by MAG.

In 1985, Maricopa County approved a 20-year transportation tax increase that was designated exclusively to build new roads and freeways in the region. And the plan was actually successful because it built that essential infrastructure. But over the decades, the plan shifted from roads and freeways to “transit,” despite a steep, increasing decline in its use.

In 2004, the tax was extended for the first time as Proposition 400 and began to migrate away from its purpose. It created three funding buckets: 33.3% for transit (with 14% earmarked for light rail), 56.2% for freeways and highways, and 10.5% for arterial streets and intersections. But now, MAG has proposed a new “Momentum” plan to extend Prop 400 that is being debated again. And it’s such a gross departure from the original purpose of the tax that it cannot seriously be called a regional transportation plan.

HB2685/SB1356 spends very little on freeways, and instead diverts most of the money to light rail, street trollies, bike paths, trails, complete streets, and a “regional program” slush fund that will result in increased traffic congestion.

In short, we are now considering a tax that’s supposed to be used for freeways and roadways that is no longer going toward freeways and roadways! That’s exactly why lawmakers slipped those line items into this year’s Arizona state budget. Prop 400 wastes billions of dollars on Green New Deal transit projects, so taxpayers throughout the state are forced to subsidize infrastructure projects in the budget for Maricopa County! What a joke.

This is nothing more than a $70 billion boondoggle for cities and towns. And it will likely lead to even more future tax hikes. If you’re not mad yet (which is hard to imagine at this point), maybe you will be when you’re stuck in even more traffic on a 110-degree June day watching an empty light rail zooming past your car. Because with such low ridership, light rails and street cars are known for only making traffic congestion worse. And MAG expects as much by 2050 despite this $70 billion in planned spending.

But today, your lawmakers don’t care about that. Instead, they’re having a jolly good time patting themselves on the back for their new budget. Of course, what they probably don’t realize, is that they simply proved that MAG’s proposed “Momentum” plan is a complete failure.

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A Gas Tax Holiday Is a Gimmicky Talking Point with No Real Long-Term Benefit

A Gas Tax Holiday Is a Gimmicky Talking Point with No Real Long-Term Benefit

With Bidenflation guzzling through the pockets of all Americans, especially at the gas station, we have heard more and more politicians promoting the idea of a gas tax holiday. Regardless of how popular the idea has become or how good it sounds among Republicans and Democrats alike, it’s still nothing more than a gimmick and talking point for campaigns.

A tax holiday isn’t a new idea. Several states have permanent sales tax holidays, commonly occurring for a week or two each year around the time kids return to school and parents are busy shopping for clothes and classroom items. But these permanent recurring tax holidays don’t accomplish what they seek to accomplish. Instead, they complicate the tax code, create instability, and mislead consumers about savings.

As a temporary response to rising gas prices and increasing inflation, it’s even worse. The reality is that permanent, long-term policy decisions are driving up fuel costs. These destructive ideas are a big part of the Green New Deal platform that has been pushed by the environmental left for decades. Add on an increase in demand, historic inflation from out-of-control federal spending, and no longer being an energy independent net-exporter of oil, it’s no wonder gas prices are higher than anyone can remember.

Suspending the gas tax is a gimmicky talking point to make it look like politicians are doing something. Instead, they are simply distracting voters and taxpayers—without any real, long-term benefit to them—and painting over support for an anti-energy agenda. That’s why we see Arizona Senator Mark Kelly coming out and supporting a gas tax holiday at the national level.

Temporarily suspending an 18 cents per gallon tax for a few months will provide little relief at the pump. If anything, it will only cause a cost shift and be used for campaign talking points. A permanent reduction in the tax may provide more long-term certainty and lower prices but would be limited in impact given that the state gas tax currently makes up around 3% of the current price per gallon.

Additionally, Arizona’s gas tax is constitutionally required to fund highway and street projects, so when the revenue drops to zero, funds from other sources will be tapped to fill in the gap. This will place pressure on politicians to consider tax shifts—raising taxes elsewhere to fund the revenue reduction from the tax holiday.

Nevertheless, some Arizona lawmakers may be tempted to promote a temporary gas tax holiday in exchange for other permanent spending and other gimmicks in the budget. After all, it’s June, and the legislature still has not figured out how to corral the necessary votes on a budget deal before we hit the end of the fiscal year on June 30th.

Simply put, a temporary tax holiday should not be traded for other bad policies, like permanent spending or tax shifts. Conservatives should push for real, permanent tax relief and reform, and let the gamesmanship stay in DC.

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Red4ED Is One of the Most Expensive Failures in Arizona Political History

Red4ED Is One of the Most Expensive Failures in Arizona Political History

Push a sympathetic message. Drum up a bunch of misguided support. And then aim for a ridiculous tax increase. That was the strategy from Red4ED after it launched a little over four years ago.

In that spring of 2018, the color red was popping up all over the place—from Facebook profile pictures to protests at the state Capitol. And it was supposedly all about increasing teacher salaries and funding for K-12 education. It was a movement that had great momentum, a sycophant media, and a political class that was terrified to stand up to them. Yet they figured out how to, in four short years, go from a political juggernaut to one of the largest and most expensive failures in Arizona political history.

Of course, defeating this multiyear assault on Arizona by Invest in Ed was a huge win for taxpayers, job creators, and the future prosperity of our state. And it would not have been possible without a combination of political miscalculations and blunders by the Red4ED decision makers and a consistent, sustained opposition from key organizations and elected officials willing to stand up to the bullies behind the movement.  

A Massive Legal Blunder

While the story of Red4ED began with a protest at the Capitol and demands for higher teacher pay, the movement was quickly hijacked by the teachers’ unions and other out-of-state special interest groups. It didn’t take long for the mission to morph from one about helping teachers into a singular quest to double the state income tax through a ballot initiative.

Soon after the first protests, a consortium of liberal organizations launched Invest in Ed version one, a poorly drafted initiative that proposed to double Arizona’s income tax. After receiving over $2 million from the National Teachers Union, Red4ED was successful in submitting enough signatures for their tax increase initiative to qualify for the 2018 ballot. But there was a problem. The organization’s 100-word summary of its ballot measure was grossly misleading. The Arizona Chamber of Commerce sued, and the Arizona Supreme Court ruled against it, saying that the description “did not accurately represent the increased tax burden on the affected classes of taxpayers.”

Whether it was an intentional effort to mislead the public or just a complete drafting blunder on their part, Red4ED’s tax increase initiative was removed from the ballot. And a $2 million lesson was learned. Or was it?

Their Litigation Woes Continue

Red4ED regrouped after its embarrassing court loss and put all its effort—along with more than $23 million—toward passing Invest in Ed version 2.0, also known as Prop 208. After an ugly campaign that involved deceiving voters once again, the initiative barely passed with 51% of the vote.

Yet just like the first initiative, Prop 208 was taken back to court, this time by the Arizona Free Enterprise Club and Goldwater Institute. And once again, the measure was struck down by the Arizona Supreme Court.

The court determined that the initiative violated the constitutional expenditure limitation. Here is the craziest part of the story—the drafters of the initiative knew that it violated the constitutional expenditure limitation. That’s right, the people that put Prop 208 on the ballot were fully aware that their measure had a constitutional defect. Yet their lawyers thought they could address the problem by including language that would “exempt” their statutory measure from the constitutional spending cap. As you would expect, this didn’t work, and the court struck down the measure in its entirety. But instead of cutting their losses and figuring out how to stop burning money that they said teachers desperately needed, Red4ED found a new way to target Arizona taxpayers.

A Futile Effort

In the midst of a brutal year for many, the Arizona legislature delivered historic tax cuts in June 2021. You would think this would be a cause for celebration for everyone, but Red4ED refused to join the party. Instead, the group spent over $5 million to hire an army of paid circulators to put a referendum on the ballot to block the tax cuts from going into effect.

They thought they finally scored a big win, but it turns out the only thing they scored was more legal headaches. Immediately after the referendum was submitted, the Arizona Free Enterprise Club filed a lawsuit, challenging the constitutionality of ballot referral. It was our belief that the measure did not comply with the “support and maintenance” clause in the constitution, and therefore the tax cuts were not referrable.

Nine months after our lawsuit was filed, the Arizona Supreme Court agreed with our position and ruled against the referendum, issuing a big win for taxpayers throughout the state.

If you’re doing the math, that’s more than $30 million spent in just over four years, and what does Red4ED have to show for it? Two legally flawed initiatives and a legally flawed referendum that all failed miserably. Plus, they took a movement that had sympathetic support for increased teacher salaries and turned it into a radical left/teacher union effort that destroyed any credibility they had with voters.

Adding insult to injury, they also had to endure watching the Arizona legislature and Governor Ducey implement the anti-Red4ED plan by slashing income tax rates in half to a flat 2.5%. In other words, a plan hatched by Invest in ED seeking to double the state income tax resulted in income tax rates that were slashed in half. What a disaster for them! But maybe they can at least celebrate the possibility that Red4ED may be the largest, most expensive failure in Arizona political history.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

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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