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:
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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Last legislative session our organization led the opposition to the Maricopa Association of Governments’ (MAG) Prop 400 sales tax extension, SB1356, criticizing the plan for its massive expansion of transit spending, lack of oversight, and vague allocations of spending that amounted to a slush fund for government bureaucrats. It was astonishing the lack of answers we received to simple questions about the plan and how funds would be spent.
We suspected at the time that we weren’t being told the whole story and that ulterior motives were at play. Only now do we know how right we were.
Governor Ducey’s veto of MAG’s defective Prop 400 plan provided a reset of the Prop 400 debate. Coupled with new legislative leadership not beholden to MAG and the transit lobby, they could no longer avoid a debate of their unvetted proposal. So, after several months of legislative hearings and substantive meetings at the Capitol, what critical information has MAG been hiding from lawmakers and the public?
MAG’s Plan is a Bailout for a Bankrupt Transit System
The debate around the last extension of the Maricopa County transportation tax in 2003 hinged on the idea of shifting billions of dollars away from freeway construction and into public transit. This was a major deviation from the intent of the original tax adopted in 1985 which funded 100 percent freeways. Appeals from the transit-lobby were ultimately successful and resulted in 33.3 percent of the tax being diverted to fund expanded bus operations and a new light rail system in Phoenix, Mesa, and Tempe.
Now under their new “Momentum Plan”, MAG wants over 40 percent of the tax to go toward transit, siphoning off billions from much needed freeway and roadway projects throughout the valley. MAG and Valley Metro claimed that demand for expanded bus service was the rationale for taking a larger share of the Prop 400 pie, but that wasn’t it. Through record requests and inquiries by State lawmakers, it was discovered that (unsurprisingly) the Valley Metro bus system is bankrupt, and that billions are needed to make up the shortfall. So why is the existing system bankrupt? Two reasons: a massive decline of ridership and plummeting fare recuperation.
For a variety of demographic and socioeconomic reasons, bus ridership in Maricopa County has been in decline for over a decade. And after the Covid-19 pandemic, transit ridership fell off a cliff, dropping by over 50 percent and has yet to recover. As of today, transit ridership as a share of urban travel is lower than it was twenty years ago, despite massive population growth and record amounts of money spent on bus and light rail. And if almost empty buses and light rail weren’t bad enough, the revenue being generated by fares from the remaining customers is almost non-existent. When the current Prop 400 tax plan was being sold to voters twenty years ago, Maricopa Association of Governments included benchmarks for “farebox” recovery for the region’s transit provider, Valley Metro. They promised that fares would cover 30 percent of operational costs for local buses, 25 percent for express/Bus Rapid Transit, and 45 percent for light rail. What was fare recuperation for Maintenance and Operation in 2022? A paltry 7 percent.
This is why MAG’s 400 plan is demanding a higher share for transit. They want a taxpayer bailout.
MAG’s Plan Hid Massive Spending for Green New Deal Programs
One of the larger mysteries rolled into the MAG plan was the creation of a new “regional programs” bucket to fund an undefined list of “transportation projects that are selected through a performance-based process for arterial improvements, active transportation, air quality, emerging technologies, intelligent transportation systems, safety and transportation demand management.”
This hodgepodge list was basically carte blanche authority to spend taxpayer money on – whatever. More involved conversations with MAG have not assuaged lawmakers but instead incited more unease. With the current agenda being broadcast in plain sight to move people out of their cars, forcing them to walk, bike, and take transit instead, the inclusion of this “slush fund” and the over $2B allocated to it, has understandably raised many questions. One of those questions being what specific projects does MAG intend to finance? They have refused to provide such a list aside from paving dirt roads and buying street sweepers, neither of which require billions.
This fall it was revealed that MAG intended to use the Regional Program slush fund to pay for the region’s air quality program. This was a concerning revelation, especially after MAG rolled out their proposed recommendations in early March as remedies to contend with unrealistic EPA air quality standards. Notably, it included California-style measures to ban the sale of gas-powered cars by 2035, ban gas appliances, and ban gas-powered lawn equipment. Because MAG’s bill didn’t include any other safeguards or clarification on what “air quality” projects meant, it can be assumed it would be used in the future for such things as “cap-in-trade” like programs for carbon offsets, forced electrification, or expensive incentives or disincentives for reducing vehicle miles traveled.
MAG’s Plan Prioritized Ideological Agendas Over the Interests of Motorists
Last year we failed to recognize why there was such a radical shift in the kind of transportation policy being funded by MAG’s 400 extension plan. Only after broader investigation did we realize that an ideological agenda has infiltrated all levels of transportation planning, MAG’s plan being no exception.
This multi-dimensional effort by climate alarmists, urban planning bureaucrats, corporations poised to financially benefit, and the social justice warrior academics and activists, aims to use transportation and land use to reorient the way the majority of people live. Center of that fight is the personal automobile; as this cabal of interests would love nothing more than to see people forced to walk, bike, or rely on public transit and therefore relegated to dense urban environments, not conducive to how the majority of people live in the Valley.
That is why MAG doesn’t want to build new freeways, at least not the way normal people think about freeways. The only new freeway considered in the current MAG plan is the construction of SR30 in the west valley, a project that was supposed to be built under the existing tax but was scrapped because transit funding was prioritized instead. MAG has begrudgingly included funding for the SR 30 in the new plan, but only for a portion of the freeway and only in the 25th year (all but certain to be deferred, again).
And if that isn’t bad enough, the project design that won approval from MAG is called the “State Route 30 Active Transportation Conceptual Plan.” Surveys were conducted by MAG, giving respondents design options that included integrated bike paths and pedestrian walkways then feigned to ask what might concern someone riding a bike on the freeway by which most respondents replied with the number and speed of vehicles. Choosing a freeway without these features was not an option. Obviously, the only kind of freeway MAG will consider building at this point is a bastardized version that limits capacity and slows speed, contrary to the whole point of a freeway.
Lawmakers Should Bring Back the Sanity to Prop 400
The origination of the Maricopa County half cent sales tax in 1985 was a blessing to the valley. It octupled the number of freeway miles which created an abundance of connections between communities across the county. It made the economic flourishing, influx in population growth, and diversification of businesses possible in the following two decades.
A continuation of the tax could be nearly as valuable if it focused on simply supporting the free movement and mobility choices of people and freight, instead of a costly attempt to foist ideological value judgements on the way bureaucrats wish people would live and move. The Republican majority thus far has held the line on insisting any Prop 400 extension that proceeds is good for residents, businesses, and taxpayers.
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Last week, Tucson residents exercised common sense by overwhelmingly rejecting Prop 412 in a special election. And whether you live in the city or not, this is a significant win for our future.
Disguised as a new agreement between the City of Tucson and Tucson Electric Power (TEP) to renew the Franchise Agreement for another 25 years using the current 2.25% fee, the proposal included a number of Green New Deal pet projects. Had it passed, it would have added a 0.75% “Community Resilience Fee” to fund the costs associated with building underground transmission facilities—and “projects that support the City’s implementation of the City’s approved Climate Action and Adaptation Plan.”
That would have meant:
Lengthy construction projects removing driving lanes from roads (Road Diets)
Permanently inhibiting access to small businesses
Reducing personal vehicles by 40% by 2050
Establishing Tucson as a 15-minute city with local travel restrictions removing personal choice
Now, the citizens of Tucson have spoken. And it’s clear that they don’t want Green New Deal mandates that take money from their wallet and freedom from their lives.
But make no mistake about it. TEP and its leftist ally Mayor Regina Romero are committed to their “climate change” agenda. Following the resounding defeat of Prop 412, TEP put out a statement that it still plans to move forward on adopting the Green New Deal by phasing out fossil fuels. This is the same utility company that is currently seeking a 12% rate hike from the Arizona Corporation Commission (ACC) before the end of the year! They have a monopoly and are assuming that the ACC will simply rubber stamp whatever rate hike they request.
That’s why it also shouldn’t come as much of a surprise that right before the defeat of Prop 412, the Tucson City Council voted to make public transit free indefinitely despite not having funding secured beyond December. That’s right, after three years of not charging for transportation services, the government failed to listen to the people again.
Community members have complained that this three-year experiment has led to a rise in crime and public nuisances. Bus driver unions have complained that free busing threatens public safety and forces drivers to act as transit police. And other public safety activists have claimed that free busing facilitates drug sales, trafficking, and even usage.
But liberals like Mayor Romero and other members of the Tucson City Council just don’t care. The Left is committed to its agenda, but when you stay informed, when you make passionate arguments based on facts, and when you hit the streets and fight back, you can defeat them. Prop 412 is the perfect example of that. Now, we need to be prepared for the next battle.
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A special election is taking place right now in Tucson, and even if you’re not from the city, you should pay attention. At first glance, Prop 412 appears to be nothing more than a new agreement between the City of Tucson and Tucson Electric Power (TEP) to renew the Franchise Agreement for another 25 years using the current 2.25% fee. But just like anything government bureaucrats put out there nowadays, you need to keep reading.
Along with the renewed agreement, Prop 412 would add a 0.75% “Community Resilience Fee” to fund the costs associated with building underground transmission facilities—and projects that support the City’s implementation of its Climate Action Plan. Ahhh, there it is. The agenda behind Prop 412 finally comes out. This isn’t about renewing a franchise agreement. It’s about forcing hardworking taxpayers to start funding the estimated $326 million it’s going to need to address Mayor Regina Romero’s so-called “climate emergency.”
According to TEP, it plans to use this “Resiliency” Slush Fund to:
decarbonize city-owned and operated buildings and facilities.
promote distributed energy resources such as rooftop solar to provide local renewable energy and enhance energy resilience.
pursue additional local sources of renewable energy, including resource recovery and heat exchange.
promote electric vehicles via charging infrastructure expansion.
transition public agency fleets to zero-emission and net-zero-emission vehicles.
establish accessible resilience hubs across all City Wards to provide information and resources related to climate preparedness and response.
bolster City-owned and community-wide heat mitigation resources to reduce urban heat island effect and protect vulnerable individuals and communities.
deploy and maintain equitable nature-based solutions that reduce or sequester emissions, improve ecosystem health, and bolster climate resilience.
bolster community and regional networks to improve community-wide emergency response and resource-sharing.
That’s right. It’s just another long list of Green New Deal pet projects all at the expense of taxpayers who are already overburdened by Bidenflation and exorbitant gas prices.
But there has to be some kind of benefit, right? Nope.
If Prop 412 passes, Tucson residents can expect to be on road diets through lengthy construction projects that remove driving lanes from roads. This will cause small businesses—many of which are still recovering from ill-advised COVID shutdowns—to suffer as lane reductions create a permanent inconvenience for customers. On top of that, it will reduce personal vehicles by 40% by 2050, and ultimately lead to what Mayor Romero really wants: establishing Tucson as a 15-minute city with local travel restrictions that remove personal choice.
Even if you don’t live in Tucson, that last one should concern you. Liberals around the world are pushing the 15-minute city concept more and more. In Barcelona, the city is limiting personal car vehicles only to residents or delivery services. And speed limits are a maximum of 6 miles per hour. In Oxford in the UK, the government has adopted an $86 fee for driving past the 15-minute filter in a personal vehicle.
But perhaps the biggest question of all is why does TEP even need more taxpayer dollars to begin with? Its reported profits from the last three years are:
2020 – $191 million
2021 – $201 million
2022 – $217 million
In addition to these profits and the 0.75% Community Resilience Fee, TEP has already requested that the Arizona Corporation Commission approve a 12% rate increase before the end of the year. That would bring the total average impact between Prop 412 and the proposed rate increases to be about $180 per year for customers. This is outrageous! TEP and the City of Tucson don’t care about residents. They are just looking for another money grab to push a Green New Deal agenda that restricts freedom with no real positive impact on the environment. Now, it’s up to the citizens of Tucson to push back and vote NO on Prop 412.
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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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Today, the Arizona Free Enterprise Club released a new study evaluating the project investments proposed in the Maricopa County Association of Governments (MAG) “2050 Momentum Plan” funded through a half-cent Proposition 400 sales tax extension.
In his analysis, transportation scholar Randal O’Toole determined that MAG failed to employ the most basic “rational planning process” which requires developing a wide range of alternatives, evaluating those alternatives, and monitoring their implementation. This abdication of the rational planning process is even more confounding post-COVID pandemic which radically changed travel behaviors, and highlights that MAG was more interested in pushing an agenda than devising transportation policies that could respond to real-world problems and withstand objective scrutiny.
O’Toole investigated claims that MAG’s Plan would alleviate congestion, improve air quality, enhance social equity, and improve safety, all of which either fall short, are unsubstantiated with evidence, or in fact worsen. Notably, the study reveals:
The Plan provides no explanation for the steady decline in transit ridership in Maricopa County under the existing regional transportation tax. In particular, transit ridership declined from 2009 to 2019 despite population increasing by over one million residents in the region.
The Plan fails to recognize the significant shift in travel behavior post COVID-19 (more telecommuting, less rush hour commuting) which further decimated transit ridership, with 2022 boardings being only 55% of what it was in 2019.
MAG fails to disclose any of the computations used to determine outcomes in the Plan. Key information such as projections for future transit ridership, assumptions used for future changes in traffic congestion and travel behavior, or calculations on how safety will be improved have been withheld from the public.
The Plan inequitably allocates 40 percent of the tax revenue to transit despite transit carrying less than 1 percent of the region’s passenger miles and zero miles of freight.
$2.3B in the Plan funds “active transportation” or non-vehicular travel as well as “transportation demand management” projects, all of which are meant to reduce single-occupancy vehicular travel. This includes 21 miles of bicycle lanes on minor arterials and collectors which will most likely reduce capacity and increase congestion for auto traffic.
The Plan lacks any coherent or substantiated strategy to reduce congestion in the region despite congestion being the predominant concern of county travelers, costing them nearly $1,200 per auto commuter in 2019.
Less than 2 percent of commuters who earn less than $25,000 a year take transit and a small fraction of the 2.5% of workers in households without a car in the region utilize transit. As such, the Plan neglects to help the vast majority of low-income commuters in the region who can access twice as many jobs in a 20-minute auto drive than in a 60-minute transit ride.
The data in this study should help inform lawmakers’ decisions regarding formulating transportation funding and policy in Maricopa County going forward. “The Prop 400 extension represents the largest piece of transportation policy lawmakers will consider in the next two decades,” stated Scot Mussi, President of the Arizona Free Enterprise Club. “It is critical that it is informed by the data of how people choose to travel in the region, not ideological agendas and pie-in-the-sky utopian ideas being imposed on taxpayers by bureaucrats.”
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No one likes to pay taxes. So, understandably, businesses who can afford to hire lobbyists go to the state capitol every year to figure out how to pay less of them. Some of these large corporations have been so successful, they don’t pay any taxes at all.
Take, for example, the beneficiaries of the R&D tax credit program, which in Arizona is so generous, there is an almost $2 billion carryforward of accrued credits which can be applied for 10 years. This effectively means that there are too many credits and not enough tax liability to absorb them. How would you like the ability to not pay taxes for the next decade?
For “small” businesses with fewer than 150 employees, they are eligible for a “refund” of up to 75% of the excess credits, capped at $5M every year. There is a word for a business receiving a tax refund when you have zero tax liability—it is a subsidy. Any tax system that excludes some businesses from paying while making everyone else pick up the tab is dubious tax policy. But to then allow those same businesses to collect additional subsidies—paid for by all other taxpayers—is downright wrong. It is nothing more than government redistribution to the politically connected.
It is also likely unconstitutional. For good reason, the framers of Arizona’s Constitution were suspicious of corporate interests accruing political power that outsized average taxpayers, seizing preferential treatment for themselves at the expense of everyone else. As such, Article 9, Section 7 of the Constitution, also known as “The Gift Clause,” prohibits donations, grants, or subsidies from the government to corporate or private interests. A refundable tax credit is irrefutably a subsidy.
That has not stopped lawmakers and lobbyists from pushing this year’s expansion of the program through SB1562. This bill would expand the existing program for “small” firms receiving refundable credits from $5M to $10M a year and creates a new program that allows up to $50M a year in unused credits by larger companies to be converted $0.75 on the dollar (i.e. made refundable) for reinvestment.
This is a massive expansion in the refundability of the program and lays the groundwork for all $2 billion to be given away in subsidies to big businesses. And considering the state only generates $850M a year in corporate taxes, lawmakers should instead look to cut corporate income taxes across the board, rather than look to creative ways to hand out $2B in subsidies.
Proponents may argue that these aren’t really subsidies, as the money must be used for qualifying reinvestment projects and that taxpayers ultimately benefit because these projects are a public good because they must be used for “sustainability” or water-saving capital projects or for various workforce development projects or tuition reimbursement. Well, this is a stretch to say the least. What business wouldn’t want regular capital projects designed to save them money overall or training, education, and employee benefits such as tuition reimbursement defrayed? While schemes such as Bernie Sanders “free” tuition to attend woke universities, compliments of the taxpayers, are wildly unpopular with the general public, SB1562 is a creative repackaging. The only hook is, to have your tuition footed by taxpayers, you have to work for a politically connected corporation.
In reality, there isn’t a difference to a business in giving them a bag of cash or reimbursing their normal business costs—it all serves their bottom line. Unfortunately for every other taxpayer, it comes out of their pocketbooks. Despite the army of lobbyists hired to push for SB1562, we hope taxpayers ultimately win the battle this year to expand corporate welfare at the legislature.
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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