Lawmakers Successfully Negotiate Phase Out of Car Registration Fee

Last year, under the guise of public safety, a bill was passed at the legislature to charge Arizona drivers an additional VLT (vehicle license tax) fee. Although it was purported as a dedicated funding source for Highway Safety Patrol, the money was immediately swept to support payment of the Governor’s 20×2020 teacher salary raise plan.

The fee was passed with all Democrats and a handful of Republicans, with conservative Republicans getting rolled on the bill.  Despite the claims that the fee would be $18, the bill gave unilateral authority to the Department of Transportation to set the tax, and when finally assessed the fee doubled at $32. 

In the New Year, without ANY organized opposition, Arizonans all over the state started expressing their outrage to lawmakers about the tax.  Several legislators immediately filed bills to repeal and/or cap the fee.

Senator Michelle Ugenti-Rita (the main champion of the full repeal) sponsored Senate Bill 1001, which sailed out of the senate with a 24-6 vote.  Many of the lawmakers who supported the bill last year have now backtracked on their vote.

The bill was never given a full vote in the House as it got caught up in budget negotiations with the Governor’s office.

Now budget bills have been released which showed a 5-year phase out of the tax.  With Senator Ugenti-Rita holding the line, the Governor’s office finally ceded to a 2-year phase out of the fee.

Unfortunately, taxpayers won’t being seeing a refund of that $32.  However, this is a tremendous win for legislators and taxpayers!  Not only were they successful in getting a tax eliminated that should have never been passed to begin with, but they are in the process of repealing some of the worst public policy to ever pass out of the legislature.

The Left and Media Ignore Initiative Fraud While Attacking SB 1451

The Left and Media Ignore Initiative Fraud While Attacking SB 1451

There is an open secret regarding Arizona’s initiative process, one known by political insiders, ignored by the media and accepted by every group looking to buy their way onto the ballot box.  It is that committees that run ballot initiatives hire felons and fraudsters to collect signatures to qualify propositions for the ballot.

This statement is factually true and supported by evidence, yet is immediately denounced by liberal opponents and the media as a cynical attempt to thwart access to the ballot.

It is why when initiative reform measures are proposed such as Senate Bill 1451, no time is spent debating the actual provisions of the bill designed to crack down on the abuse. They fear this debate because it will expose the true intentions of their opposition. Instead, the howls of “voter suppression” get louder to avoid confronting these questions.

How bad is the abuse? In 2018, undeniable evidence was discovered that the “Outlaw Dirty Money” initiative hired several criminals to collect signatures on their behalf.  These individuals’ wrap sheets included offenses such as theft, assault, insurance fraud and robbery.

Paid and out of state circulators are legally required to register with the Secretary of State.  However, this registration requirement does not prohibit felons or others convicted of identity theft from signing up to collect.  There is also no penalty for paid circulators who provide false information on their registration form. Unsurprisingly, many of the paid circulators working for Outlaw Dirty Moneyfalsified information on their circulator registration forms – lying about their permanents addresses and even using fake names. 

They would have gotten away with this scheme if not for an extensive review of the petitions by opponents of the measure. When the felons and fraudsters were discovered and challenged in court, 15 of the paid circulators working for the measure ignored the issued subpoenas and simply refused to show up in court. 

This wasn’t the only initiative that employed shady or illegal practices.

In the case of Proposition 127, the committee’s own campaign manager admitted in court that most of their signatures were likely invalid.  Of the over 240,000 invalid signatures they submitted, over 20,000 of them were submitted by circulators with felony records.

It is for these reasons that Senator Vince Leach introduced Senate Bill 1451, to address these abuses of our initiative system.  SB1451 includes two significant reforms:

  1. Prohibits felons and criminals convicted of fraud and identity theft from registering as paid circulators. Right now, there is no prohibition for these individuals to register as paid circulators.
  2. Makes it a Class 1 misdemeanor for individuals to knowingly omit or falsify information on their circulator registration form. Candidates, elected officials and lobbyists file registration forms and financial disclosures under threat of perjury. Paid circulators should be punished just like anyone else who files falsified information with the Secretary of State.

Yet one would never know just how necessary and reasonable these reforms are over the cries from opponents claiming this will end the initiative process. 

The reality is this: groups looking to buy their way onto the ballot box have no desire to police their own people, they are okay with fraud in the initiative process, and they don’t believe there should be consequences when people are caught red handed committing fraud.

But outside of the echo-chamber of the state capitol, the average Arizonan disagrees.  Over 85 percent of Arizonans polled supported the exact type of anti-fraud provisions included in SB1451 – including prohibiting felons from collecting their personal information. 

Voters know this is wrong. Most lawmakers know this is wrong. The passage of SB 1451 is long overdue.

Corp Comm Charging Station Mandate is a Subsidy for the Rich

Corp Comm Charging Station Mandate is a Subsidy for the Rich

There has been an important policy debate stirring in Arizona over a proposal to mandate the construction of electric vehicle (EV) charging stations by utility companies.  The current proposed policy would benefit a few select companies and electric vehicle car owners at ratepayer expense.

Surprisingly, this conversation has not been happening in the transparency of the state Capitol amongst the state’s elected lawmakers – but by the Arizona Corporation Commission (ACC) – whose primary charge is to set utility rates.  This is inappropriate. 

Voters expect policies of such sweeping state implication to be the purview of the Arizona State House and Senate, not the Corporation Commission.  After all, existing subsidies for electric vehicle owners such as the utilization of the HOV lane, significant reductions in the cost to register an electric vehicle, and an exemption on the first year for vehicle emissions testing are all statutory laws that went through the more public and rigorous legislative process. 

Aside from the ACC being the wrong venue for this discussion, there are deep policy flaws with the proposal. 

First, the evolution of new technology into the automotive and energy marketplace has been good for the economy, consumers and the environment. But building charging stations would inject another subsidy into the rate base that picks winners and losers among ratepayers.  Less than 1 percent of the population own and operate an electric vehicle, yet they will benefit from this program at the expense of the other 99 percent. Additionally, since most electric vehicle owners are overwhelmingly wealthy and affluent, this is a subsidy that will be paid for by the middle class to benefit the rich.  

Secondly, as cited, electric vehicle car owners already receive favorable tax treatment and do not need an additional subsidy. Currently, the majority of Arizona’s transportation infrastructure is financed through vehicle fuel taxes. There is not a comparable EV tax, which is a great deal for adopters of the technology. If the Commission moves forward with subsidizing charging stations, internal combustion car owners would be getting hit at the pump as well as through their utility bills.

The ACC proposal is simply unfair.

Thirdly, the construction of charging stations should be a function of the private sector. If the belief is that electric vehicles are the future of transportation, then there will be a market and viable business model for the construction of charging stations throughout the state. The government will only depress the cultivation of the EV charging station marketplace if the Commission moves forward with this proposal.

Finally, this proposal would set a precedent for additional subsidies to preferred constituencies. For example, if we are to build charging stations for electric cars, why not for electric scooters or golf carts? Once the Commission begins handing out special deals to one class of ratepayers, it should expect others to get in line asking for their sweetheart deal as well.

The Club understands the desire of the Commission to promote new ideas and technology, but mandating the construction of EV charging stations is not the right approach.

Federal Tax Reform Benefits For Arizona Workers Now Exceed $215 Million Dollars!

Four months have passed since the enactment of federal tax reform, and Arizona workers and taxpayers continue to be rewarded with new raises, bonuses and expanded benefits. As of April 30th, over $215 Million dollars has now been put back into the pockets of Arizona workers and ratepayers as a result of federal tax reform.

Here is a list of Arizona companies that have rewarded employees with additional pay and benefits:

  • American and Southwest Airlines announced $1,000 bonuses for their nearly 15,000 employees in celebration of the GOP tax plan.
  • CEO Bob Parsons handed out $1.3 million in bonuses to his 725 employees at YAM Worlwide.
  • AT&T and Comcast provided $1,000 bonuses to hundreds in their Arizona workforce.
  • Bank of America will be giving $1,000 bonuses to their 10,000 Arizona employees that make up to $150,000 in total compensation.
  • Boeing has committed to $300 million to charitable investments, workforce training and infrastructure improvements benefiting their 3,600 Arizona employees.
  • Nationwide announced $1,000 bonuses and an increase of their 401(k)-matching contribution for their 1,900 Arizona employees.
  • Wells Fargo, with over 15,000 Arizona employees, announced the establishment of a $15 minimum wage, $400 million in charitable donations and $100 million in additional capital investment.
  • Wal-Mart has committed to providing their 35,000 Arizona employees a guaranteed minimum wage of $11/hour and bonuses up to $1,000.
  • APS announced that they intent to slash $119 Million from their utility rates, which would save the average homeowner $56 each year.
  • Verizon will provide 50 shares of restricted stock (valued at $53/share) to their 2,800 Arizona employees, a total value exceeding $7 Million dollars.
  • JP Morgan Chase will be giving a $750 bonus to their 10,000 Arizona employees and raise starting wages from $15 to $18 an hour.
  • Waste Management, Inc. is providing $2,000 bonuses to nearly 2,000 Arizona Employees that do not participate in a sales incentive or bonus plan.
  • Meridian Bank increased their base wage to $15/hour, increased charitable contributions and capital spending and added 20% to existing bonuses.
  • Comerica Bank will provide $1,000 bonuses to their 100+ Arizona non-officer employees and raised their base wage to $15/hour.
  • Home Depot announced bonuses up to $1,000 for its 10,000 Arizona employees
  • Western Alliance provided bonuses, pay raises and an increase in their 401(k)-matching contribution for their 700 Arizona employees.
  • Washington Federal, which has nearly 200 Arizona employees, has committed to 5% merit increases for employees making less than $100k and an substantial increase of training programs for their workers.
  • Starbucks announced pay raises, expanded benefits and company stock (valued at $500 for shop workers, $2,000 for managers) to their 4,000 Arizona employees.
  • FedEx, with 3,700 Arizona employees, will be giving bonuses, pay raises and a voluntary $1.5 Billion contribution to their company pension plan.
  • Honeywell has committed to boosting their 401(k)-match for its 8,000 Arizona employees.
  • U-Haul will be providing bonuses ranging from $500 to $1,200 for their 3,800 employees.
  • Lowe’s has committed to providing their 4,000 Arizona employees bonuses up to $1,000, expanded benefits and maternity leave and $5,000 in adoption assistance.
  • Chipotle is providing bonuses ranging from $250 to $1,000 for their Arizona employees
  • McDonald’s announced a tuition assistance program for their 16,000 Arizona Employees ranging from $2,500 to $3,000.
  • Cox Communications, with over 3,200 Arizona Employees, will be receiving bonuses ranging from $1,000 to $2,000.

In total, over 125,000 Arizona workers are on the receiving end of bonuses, pay raises and other benefits thanks to the business tax cuts. Combined with the individual income tax reductions that will show up on paychecks next month, the direct financial benefit for Arizona taxpayers as a result of tax reform will be over $1 Billion dollars in 2018.

The Club will continue to expand the list of AZ companies rewarding their employees with bonuses, pay raises and benefits. If you know of a company not on the list, please email info@azfree.org so that the Club can include the good news on our tax cut victory tally.

SB 1147 Trojan Horse to Spend Billions More on Light Rail Boondoggle

SB 1147 Trojan Horse to Spend Billions More on Light Rail Boondoggle

For years advocates for light rail have been trying to convince the legislature to allow Maricopa County to extend the 1/2 cent transportation sales tax (currently set to expire in 2025) to include billions more for light rail. They know that they can’t pass light rail by itself, so they have been looking for ways to sneak it by lawmakers by tying it to other more popular transportation projects.

Their solution is SB 1147, a poorly crafted transportation omnibus bill that would eliminate the statutory spending caps on how much money can go toward light rail and other wasteful transit projects. The bill would also remove the requirements that funding go toward freeways and other regional roads, unnecessarily create duplicative and confusing new statutes for rural counties and allow new tax hikes to be considered on off-cycle election dates that are notorious for low voter turnout.

The evidence that light rail and similar fixed line transit is a bad deal for taxpayers is overwhelming. In 2017, the Free Enterprise Club published a study on the future of transportation policy in Maricopa County and the value of light rail in the Phoenix Metro Area. The conclusion was that light rail is a bad deal for taxpayers, commuters, non-politically connected landowners and anyone else that relies on the current bus transit system. Additionally, a cursory review of the wild-eyed economic development claims being made by proponents of rail are easily disproven as well.

The most critical facts when considering light rail include:

  • Light rail will NOT reduce traffic congestion–it will INCREASE traffic congestion

A common myth pushed by proponents of light rail is that it will help in getting people off the roads and into public transit. The fact is that light rail will increase traffic congestion, and there are a couple of reasons for this. First, the only way to accommodate the new rail line will be to remove street lanes currently used by automobiles. And since street lanes can move more traffic per hour than light rail, congestion will be greater along the line. Secondly, since the rail line is moving at street grade, it will have to receive priority at every traffic light. This will disrupt signal coordination systems, spreading the disruption well beyond the light rail intersections. That is why every independent traffic analysis that has been done concludes that light rail increases traffic congestion.

  • Light rail will NOT increase transit ridership and will HURT bus ridership

Another argument made by the light rail lobby is that building light rail will increase transit ridership. The fact is most light rail passengers are either individuals who already use transit or passengers who were forced onto light rail when existing bus service along the rail line was eliminated. Additionally, since rail costs substantially more to operate than buses, over time light rail will crowd out bus service and will result in a reduction of bus lines in the Phoenix metro area.

This is not speculation—this exact scenario has played out in every city that has built light rail. For proof, here is a chart showing transit ridership in the Phoenix metro area since 2000, courtesy of Valley Metro:

As can be seen by the chart, transit ridership was increasing steadily from 2000 to 2008, prior to light rail opening. After light rail opened, bus ridership began to plummet and is now at levels not seen since 2003. Even more troubling, after a decade of growth annual transit ridership has been in decline.  The 2017 figures were just released and annual transit ridership is now LOWER than when light rail opened in 2009.

  • The Economic Development Claims are False

Knowing that light rail cannot be defended for reducing congestion or increasing transit ridership, advocates usually pivot to the claim that rail should be built since it promotes economic development.  This claim is easily disproven as well. After a careful analysis of the figures provided by Valley Metro, the Club proved that most of the economic development credited to light rail was either “planned or committed” development, projects that had nothing to do with rail (like the Phoenix Convention Center) or were projects that never occurred.

After discrediting their figures in 2015, Valley Metro released a new analysis, now claiming that billions in constructed projects have occurred because of light rail. How did they reach this conclusion? Valley Metro is now assuming that light rail is responsible for ALL economic development that occurs within 1/2 mile of the rail line. Since the rail line is 26 miles long, that means they are including 26 SQUARE MILES within their analysis. The idea that light rail is responsible for all economic development in an area the size of Queen Creek is laughable.

  • SB 1147 Ignores the Blossoming Self-Driving Transportation Revolution in our own Backyard

The final nail in the coffin for light rail is that it is more likely than not that drastic advancements in autonomous vehicles will render the service useless and unused. Thanks to Governor Ducey, Arizona has become a leader in promoting and developing self-driving technology, and it is anticipated that such cars will be available to the public in the next five years. The idea that we are going to commit billions to human-operated, fixed line rail through 2045 when the technology will be beyond obsolete would be a huge mistake.

If lawmakers believe there is a need to update our existing transportation statutes or even consider extending the Maricopa County transportation tax, policy makers should make sure that the money is used on productive transportation projects that include plenty of transparency and oversight. Without drastic changes to SB 1147, the bill will remain a train wreck for taxpayers.

Arizona Cities Reveal Plan for Massive Tax Increase on Internet Services

If you enjoy using the internet, prepare to hide your wallet. A coalition of cities throughout Arizona have announced their intention to impose massive new tax increases on a wide array of currently untaxed digital products, targeting popular streaming services and applications such as Apple iCloud, LegalZoom and Pandora.

This outrageous plan to tax everything on the internet manifested itself from good faith legislation introduced at the Capitol earlier this year to clarify what digital products should (and should not) be taxed. Arizona law has been silent on the issue, and the Department of Revenue has struggled to develop rules to differentiate digital goods from digital services, which is an important distinction since Arizona has historically not taxed services.

HB 2479 and SB 1392 were introduced after lengthy bipartisan discussions that included input from the private sector and taxing entities, including the cities. The conclusion from those meetings was that taxing online digital services was a terrible idea that was contrary to legal precedent and would put Arizona at a competitive disadvantage, since most other states do not tax similar internet products.

Yet the allure of new revenue from internet taxation has led the League of Cities and Towns to oppose both bills. They have made it clear that no restrictions should be placed on their internet taxing powers, a radical position that could lead to digital goods and services becoming one of the MOST taxed items in Arizona. Even more stunning is that their plan is likely illegal and would violate federal law.

This is not an issue that lawmakers can remain on the sidelines. If local governments get their way, internet users will be hammered with a slew of new taxes, while digital startups and capital investment will be driven to other states much friendlier to the tech industry.

Action must be taken soon to protect taxpayers and slam the door shut on the digital internet tax. We urge everyone to contact your lawmakers to vote YES on HB 2479 and SB 1392.