ARIZONA FEDERATION OF TAXPAYERS

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View the latest report card of the Governor and the Arizona Legislature. Click here to see Legislators' scores, party affiliations, districts, and home cities.

 

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December 20, 2007


See pix from the 2007 Awards Luncheon at the AFP-Arizona blog.


December 19, 2007

2007 Legislative Scorecard

Four AZ Legislators Qualify as Heroes of the Taxpayer

Click here to view the chart for the 2007 Legislative Scorecard from the Arizona Federation of Taxpayers and Americans for Prosperity Foundation. Click here to view Legislators' scores, party affiliations, and home cities or counties.

Senator Ron Gould (R-Lake Havasu City) won the top prize for the third year in row, with a score of 97 percent. But Gould had close competition this year from Rep. Andy Biggs (R-Gilbert), Rep. Russell Pearce (R-Mesa), and Sen. Pamela Gorman (R-Anthem), who also scored 90 percent or higher and thereby qualified as Heroes of the Arizona Taxpayer.

This year's Champions of the Taxpayer (80 to 89 percent) included Rep. Kirk Adams (R-Mesa), Rep. Judy Burges (R-Sun City), Rep. Doug Clark (R-Anthem), Rep. Sam Crump (R-Anthem), Rep. Eddie Farnsworth (R-Gilbert), Sen. Chuck Gray (R-Mesa), Rep. Trish Groe (R-Lake Havasu City), Sen. Karen Johnson (R-Mesa), Rep. John Kavanagh (R-Scottsdale), Rep. Rick Murphy (R-Glendale), Rep. Warde Nichols (R-Chandler). With their combined high scores, Sen. Gorman and Reps. Clark and Crump made Legislative District 6 (Anthem/North Phoenix) the highest-scoring district in the state.

Two Democratic legislators scored above 50 percent on this year's Scorecard. Sen. Ken Cheuvront of Phoenix scored in the Ally of the Taxpayer category (60-69 percent), and Rep. Mark DeSimone of Phoenix scored in the Needs Improvement category (50-59 percent). Sen. Cheuvront also shared this year's Kendrick Prize for Legislative Courage with Rep. Rick Murphy (R-Glendale), for spearheading a successful reform bill aimed at curbing municipal sales tax giveaways to politically-connected developers.

The average Republican legislator scored 65 percent (Ally of the Taxpayer), while the average Democratic legislator scored 32 percent (Friend of Big Government). Last year’s averages were 62 percent and 20 percent, respectively.



December 15, 2007

Thanks to the 400-plus taxpayer activists who joined us at the 2007 Friend of the Taxpayer Awards Luncheon.


And thanks to Sonoran Alliance for the play-by-play blog from the Luncheon.

The 2007 Friend of the Taxpayer Awards Luncheon was held by the Arizona Federation of Taxpayers and Americans for Prosperity Foundation on Saturday, December 15, from 11 am to 2 pm at the Scottsdale Plaza Resort.

The luncheon's keynote speaker was tax-cutting former NM Governor Gary Johnson. Other speakers included:

Congressman John Shadegg, a champion of federal tax, budget, and health-care reform

Radio host and former Congressman J.D. Hayworth

Arizona Treasurer Dean Martin, a long-time friend of the AZ taxpayer

Investment principal Tom Borelli, of the Free Enterprise Action Fund

Free-market health care reformer Eric Novack MD, of the Benjamin Rush League

Free-market lawyer Jennifer Perkins, of the Institute for Justice

Education reformer Liz Moser Dreckman, of the Arizona School Choice Trust

Free-market lobbyist Steve Voeller, of the Arizona Free Enterprise Club

Free-market litigator Clint Bolick, of the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation

AFP New Jersey director Steve Lonegan, who has used grassroots power to win free-market policy victories in a state that has long been one of America's strongest bastions of big-government liberalism.


November 9, 2007

Champion Tax Cutter to Keynote Taxpayer Awards Luncheon


Former NM Gov. Gary Johnson a "Shining Example" of Fiscal Conservatism

PHOENIX—The Arizona Federation of Taxpayers, a state chapter of Americans for Prosperity (AFT-AFP), has announced that former New Mexico Governor Gary Johnson will be the keynote speaker at the group's annual "Friend of the Taxpayer" Awards Luncheon, which will take place Saturday, December 15, at the Scottsdale Plaza Resort.

Full text of news release here.
Printable ticket form here.

November 5, 2007

Guide to Property Tax Reform Initiatives


Available here is a quick guide from the AFT-AFP to the three property tax reform initiatives that have been filed with the Arizona Secretary of State. If the initiatives collect enough signatures, they will appear on the state ballot on November 4, 2008. AFT-AFP also comments on prospects for a property tax reform to be referred by the Legislature.


September 5, 2007

AFT-AFP Releases First-Ever Local Govt Scorecard


Pima County Sup. Ray Carroll Wins 2007 "Local Hero" Award

To read the Scorecard, click here.

The Arizona Federation of Taxpayers, a state chapter of Americans for Prosperity, today released its first annual policy scorecard on local governments in Arizona. Most of Arizona's county supervisors and city council members will not be happy to see this year's scorecard in the hands of local voters. The overwhelming majority of public officials earned scorecard designations as Allies and Friends of Big Government, by increasing their budgets and property tax levies above the rate of personal income growth. "Too many local government officials seem to be under the impression that no one is watching them," said AFT-AFP chairman Chad Kirkpatrick. "With this scorecard, they now know the taxpayers are watching."

Ray Carroll won AFT-AFP's first-ever Local Hero Award, for dissenting when the Pima County Board of Supervisors voted to increase its budget by 14.3 percent and increase property tax levies by $34 million, and also for leading the successful resistance to imposition of a new half-cent county sales tax. Pima Supervisor Ann Day also voted against the budget, the property tax rate, and the new sales tax, and joins Carroll in the category of Champion of the Taxpayer.

The state's other Champion of the Taxpayer was Councilman Phil Stratton of Willcox, who joined five other council members in voting for a ten-percent budget reduction--and then bested them by dissenting against an increase in property tax levies.

AFT-AFP executive director Tom Jenney commented on the scorecard's methodology. "Setting state personal income growth as an upper limit on spending and levy growth gives us a good means of comparing local taxing districts," Jenney said. He also said that using adopted budgets was the only workable standard for gauging spending increases. "We will no doubt get complaints from officials who used large carry-forwards to fund huge increases over last year's approved budget, and who think they should get credit for not spending all of last year's revenue," he said. "But our goal is to encourage officials to reduce the size of the spending increases approved in their budgets."

One of the main goals of the AFT-AFP scorecard is to clear up widespread confusion about property tax rates and property tax levies. "We saw a lot of public officials bragging about lowering property tax rates," said Kirkpatrick. "But with the huge increases in assessed valuations, lower rates can still mean higher taxes."

Anticipating some of the excuses of local officials with low scores, Jenney said that an official's political philosophy, rather than external factors--such as population growth or the need for development infrastructure--was the primary determinant of how that official voted. "We saw some officials in high-growth areas vote for small spending increases, and we saw some officials in lower-growth areas vote for large spending increases." The difference, Jenney said, is that fiscally conservative officials rely more on the private sector for development infrastructure, while fiscally profligate officials rely more on government.

AFT-AFP officers regretted not being able to rate cities and counties on qualitative differences between individual budget items. "There is no objective way to compare the hundreds of boondoggles, corporate welfare handouts, and special-interest tax abatements in dozens of Arizona taxing districts," Jenney said. He pointed out that while AFT-AFP was very critical of the decision by the City of Surprise earlier this year to award a developer $240 million in sales tax rebates, for the purposes of the scorecard, the tax dodge has a relatively small impact on a total budget of $452 million that was four percent smaller than last year's budget. "You could say that Surprise has been penny-foolish and pound-wise," said Jenney. "But the point of this report card is to measure and compare taxing districts on a pound-for-pound basis."

AFT-AFP indicated that the Scorecard has room to evolve. "Next year, we may include a score for development impact fees," said Kirkpatrick. "That has become a major area of abuse in recent years."


August 1, 2007

How to Cut $1.1 Billion from the Phoenix Budget


To find out how to cut the Phoenix city budget by $1.1 billion--while increasing public safety budgets by five percent--view our budget worksheet here.

To read more about the alternative expenditure limitation, click here.

June 18, 2007

Judge Collins: Welcome to the Arizona Legislature!


Normally the Arizona Federation of Taxpayers comments on the policy positions of Arizona legislators, not federal judges. But through his judicial decisions in recent years, Judge Raner Collins has effectively appointed himself to the Arizona Legislature.

Indeed, Judge Collins has become a very powerful legislator, able to single-handedly mandate an appropriation of $150 million—over one percent of the state's General Fund budget—in additional spending on English-language learner (ELL) programs. When he doesn’t get his way, he can threaten the Legislature with sanctions, as he did last year when he attempted to impose fines of $21 million on the state.

Because Collins is such a powerful legislator, it is our duty to alert the public when we believe he is wrong about policy.

To begin with, we believe that Judge Collins has erred in his diagnosis of the problems facing Arizona's ELL programs. He apparently believes that ELL programs do not perform well because Arizona’s funding for ELL is "insufficient" and "arbitrary."

However, as the Goldwater Institute has documented, government schools in Arizona spend over $8,000 per child (including ELL students) per year. (Now that he is a legislator, we would advise Collins to get on the Goldwater mailing list.) The fact that many private schools in this state spend $5,000 per child per year to achieve better results (even with ELL students) suggests to us that government schools in Arizona may currently receive too much funding, rather than too little.

As the Arizona Tax Research Association pointed out in its most recent newsletter, using statistics from the National Education Association, Arizona ranks 11th in the nation for average instructional pay (that includes ELL instructors), and first in the nation for average instructional pay as a percent of per-capita state income. (As a legislator, Collins will find ATRA to be a great resource.)

Further, students in Arizona ELL programs already receive more than the average Arizona student—at least $383 more per year, according to the Joint Legislative Budget Committee (another great resource for legislators). In defense of the proposition that more funding is needed, Collins would no doubt cite the 2004 study conducted by the National Council of State Legislatures. But that study began with the premise that current spending is inadequate, and never bothered to question that premise.

Given how much money is spent on government schooling in Arizona, we have concluded that the problems with the government system (including the problems in ELL) are not due to a lack of adequate funds, but are entirely due to the systemic mismanagement that results from a lack of market incentives.

Collins also believes that more money for ELL will improve the performance of ELL students. But a quick look at the big picture casts serious doubts on that belief.

Between 1960 and 2000, America's government school system increased per-pupil funding by over 400 percent in inflation-adjusted dollars. Sadly, we have nothing to show for that explosion in school funding: during that same period, student performance as measured by NAEP scores has remained flat. The long-proven failure of increased funding to improve educational performance has driven much of the interest in school choice programs, which use market incentives to improve school management. If Collins is interested in learning more about school choice (as a legislator, he should be), we strongly suggest that he pick up a copy of Manhattan Institute scholar Jay P. Greene’s book, Education Myths.

Of course, the real root of Arizona's ELL controversy is not policy, but jurisprudence. The Tenth and Fourteenth Amendments have conflicting language, and the Fourteenth Amendment—in combination with vague federal statutes—has sometimes been used by federal judges to assert and exercise dictatorial control over state and local policy matters. With so much interpretive and policymaking power at Collins' disposal, we understand that it would be difficult to resist the temptation to toss federalism to the wind and override the (often questionable) collective wisdom of the Arizona Legislature.

While we earnestly hope that some higher court will overrule his ELL decisions, in the meantime we will offer to Judge Collins the same policy support we offer to all other Arizona legislators.

Welcome to the Legislature, Judge Collins!


June 14, 2007

No Friends of the Taxpayer on the Phoenix City Council


There are no Friends of the Taxpayer on the Phoenix City Council. At yesterday's meeting, the City Council voted 9-0 to pass a budget of $3.382 billion for Fiscal Year 2007-08. This fiscally irresponsible budget will increase overall spending by 12.6 percent over last year’s estimated budget, and increase department spending by 14.5 percent. If the city uses last year’s adopted budget of $3.188 billion as a baseline, it appears that the budget is growing by a mere 6.1 percent, but the bottom line is that the 2005-06 actual budget was $2.548 billion, meaning that the Phoenix budget will increase by 32 percent over two years, for an average yearly rate of increase of 15 percent.

To put that in perspective, 15 percent is three times the rate of growth of population plus inflation (the fiscally conservative upper limit on budget growth), which is about five percent annually. 15 percent is twice as fast as the average growth rate for the region's personal income over the last decade. In other words, Phoenix is growing its budget twice as fast as citizens are earning the income with which to pay taxes.

To add insult to injury, Mayor Phil Gordon made three statements during yesterday’s meeting that were demonstrably incorrect.

First, in response to the complaints of a citizen upset by rising property taxes, Gordon stated that the City of Phoenix did not increase taxes. While it is true that Phoenix did not increase its property tax rates, rapidly rising assessed values have provided a giant windfall in tax revenues to the city, even though homeowners have not enjoyed anything close to a corresponding increase in their incomes. Primary property tax revenues are set to increase from $96 million to $102 million—a tax increase of $8 million. Secondary tax revenues are set to increase from $120 million to $164 million—a tax increase of $44 million. Most of that $52 million is from tax increases on existing homeowners, rather than new taxes on new growth.

Second, Gordon stated that public safety expenditures made up 60 percent of "the budget." (His point was that the Phoenix City Council had supposedly made public safety a priority.) However, while it is possible that the $794 million in public safety expenditures might be considered to be 60 percent of some smaller portion of the budget, that $794 million is only 23 percent of the $3.4 billion budget that was voted on during the meeting. (The fraction rises to 25 percent if we include criminal justice expenditures.) In other words, Phoenix spends only one in four of its dollars on public safety.

Third, Gordon suggested that Phoenix was getting by on limited funds, despite "cutbacks" in state and federal funding. However, while state and federal grants have gone down by $40 million, shared state income tax revenues are set to increase by $40 million, and shared state sales tax revenues are set to increase by $10 million—for a net increase of $10 million.

Again, there are no Friends of the Taxpayer on the Phoenix City Council. But if you would like to register your disapproval of this reprehensible budget, this link has a map that will help you find your City Council member:

http://phoenix.gov/citygov/map.html

And this link has contact info Phoenix City Council members:

http://phoenix.gov/citycouncil/councilstaff.html


May 29, 2007

AZ Budget Battle--Last Chance for Tax Cuts, School Choice, Other Key Bills


For background information on the budget battle and easy links to send emails to your Legislators, visit the AFP Arizona blog site.

SUPPORT KEY MEASURES IN THE HOUSE BUDGET. With the Senate and House budgets passed, they will now go to conference committee. The House version contains three good measures: a $28.5 million cut in the job-killing corporate income tax, an extension (to April 15) of the yearly deadline for giving donations to school tuition organizations, and an allowance for tax-free donations by families to educational savings accounts. Your legislators need to hear that you support these important measures, and that you do not want them to get lost in conference negotiations. CLICK HERE TO SUPPORT KEY MEASURES IN THE HOUSE BUDGET.

SCR 1016, aka No Taxpayer Money for Lobbyists, which would give voters a chance to prohibit governments and government agencies from using taxpayer money to lobby the Legislature. Sen. Linda Gray (R-10) is the sponsor. CLICK HERE TO SUPPORT SCR 1016.

HCR 2025, which would give voters a chance to lower the state's existing constitutional spending limit from 7.41 percent to 6.4 percent of state personal income. Rep. Russell Pearce (R-18) is the lead sponsor. CLICK HERE TO SUPPORT HCR 2025.

HB 2515, which would withhold shared revenues from cities that give away special tax abatements to politically-connected developers. Sen. Ken Cheuvront (D-15) and Rep. Rick Murphy (R-9) are the lead sponsors of HB 2515. CLICK HERE TO SUPPORT HB 2515.


May 5, 2007

Defending the American Dream Conference


Conference photos and narrative available at the AFP Arizona site and here.

On Saturday, May 5, Wall Street Journal editorial columnist John Fund and East Valley Congressman Jeff Flake were the headline speakers at a citizen policy conference held at the Scottsdale Plaza resort. The conference, "Defending the American Dream," was the first in a series of educational events planned by the Arizona Federation of Taxpayers and conducted through the sponsorship of the Americans for Prosperity Foundation.

Since 1984, journalist John Fund has been one of the principal writers behind the Wall Street Journal's editorial page, and has served as one of the nation's clearest and most consistent voices in favor of free markets and limited government. His weekly "On the Trail" column for OpinionJournal.com often features hard-hitting exposés of big-spending legislators and the special-interest lobbyists who influence them. Electoral reform is one of Fund's favorite subjects, and he has authored two books on the topic: "Stealing Elections: How Voter Fraud Threatens Our Democracy" (2004), and "Cleaning House: America’s Campaign for Term Limits" (1992).

Rep. Jeff Flake, the often-controversial East Valley congressman, is recognized nationwide as a leading opponent of pork-barrel spending, especially the process known as "earmarking," whereby congressional legislators insert spending projects into omnibus bills during joint committee meetings, thereby avoiding public debate on the merits of those projects. Flake's criticism of the practice—and his criticisms of runaway federal spending—led to a major rift with House Republican leadership last year, after which House leaders removed Flake from a key committee. Flake has also emerged as a vocal opponent of taxpayer-funded lobbying. His votes in favor of tax cuts and against spending and regulation have earned him the highest score on the National Taxpayers Union congressional rating four years in a row.

The conference included a panel on state policy issues, featuring: Sen. Thayer Verschoor (R-Gilbert), Senate Majority Leader; Rep. Kirk Adams (R-Mesa), lead sponsor of two key bills to reduce Arizona’s personal and corporate income taxes; and, Sen. Jack Harper (R-Surprise), who earned the designation of "Champion of the Taxpayer" on AFT's 2006 Legislative Scorecard (link at left). Also on the panel was Rep. Rick Murphy (R-Glendale), the lead sponsor, with Sen. Ken Cheuvront (D-Phoenix), of a reform to discourage cities from offering special sales tax abatements to favored companies, a practice which ends up sticking other city taxpayers with higher tax burdens.


April 18, 2007

How to Bring Your Property Taxes Under Control


If you are not angry about your property tax bill, you probably haven’t studied it yet. Many Arizona homeowners are seeing their property tax bills go up by hundreds of dollars. For many—especially older people on fixed incomes—exploding property tax bills will force some tough tradeoffs. In extreme cases, increased property taxes may force people out of their homes.

There are ways you can minimize your property tax bill, though. Here are four steps you can take to bring your property taxes under control:

1) Demand that your taxing district officials lower their rates.

You will have to contact your county supervisors, city councilmen, school district board members, and the members of your water and library districts—among other local taxing authorities. Instructions on how to find and contact your taxing district officials are available here).

When you contact your elected officials, you should ask them three questions:

A) What is the current tax rate for this taxing district?
B) How low must the rate go to keep me from paying more dollars than I paid last year?
C) How far will you reduce the tax rate?

Make sure you do your homework before asking those questions. Some elected officials have boasted to taxpayers that they have cut their rates by a few pennies. If officials actually need to lower their rates by a few dimes, they are not doing taxpayers much of a favor. In many of the districts subject to uncapped secondary valuations, tax rates may have to fall at least 30 percent to keep taxpayers from suffering from tax increases.

2) Vote against ALL new taxes, new bonds, and budget overrides.

The next special election is Tuesday, May 15. In Maricopa County, there will be bond votes in Avondale, Chandler, Glendale, and Queen Creek, and budget override votes in Cave Creek Unified #93, Kyrene Elementary #28, Littleton Elementary #65, and Nadaburg Elementary. In Pima County, there will be budget override votes in Marana Unified #6, Sunnyside Unified #12, and Tanque Verde Unified #13. Contact your county recorder’s office for details.

3) Pressure your state legislators to restrain local taxing authorities.

The Arizona Legislature did a great job last year by (temporarily) zeroing out the county education equalization rate, putting Proposition 101 on the November ballot, and enacting a ten-percent cut in the personal income tax. One of the best arguments for a further reduction in the state income tax is that homeowners will need that extra cash just to pay their local property tax bills!

4) Work hard to get Serious Tax Reform passed on the 2008 ballot.

This is far and away the most important thing you can do. There are currently at least two committees at work crafting ballot initiatives that will incorporate elements of California’s famous Prop 13 tax reform. The most important element of any Serious Tax Reform proposal is to put a firm limit on the growth of all property tax revenue going to all taxing districts from all classes of property, including business property. This can be done by limiting the growth in assessed values or by limiting total levies—or both.

One model for Serious Tax Reform is SCR1025, a legislative referendum bill introduced by Sen. Ron Gould (R-Lake Havasu). The bill would limit future growth in assessed value to two percent per year for all classes of property. The referendum passed the Senate last year, but was stifled in the House.

Thanks to Prop 13, California was successful in clamping down on runaway increases in property taxes. Where California failed was in allowing other taxes to increase in the place of property tax levies. Arizona has a strong advantage thanks to Prop 108, which requires a two-thirds vote of the Legislature to increase state taxes.

Taxpayers must take action!

Left to their own devices, Arizona’s local politicians will do very little—if anything—to lower their tax rates or restrain their spending. As usual, taxpayers must protect themselves. The Arizona Federation of Taxpayers is ready to help, but it’s really up to you!


April 17, 2007

Detest the Federal Income Tax? Don't Just Sit There!


Join the Arizona Federation of Taxpayers and Arizonans for the Fair Tax at our April 17th PROTEST at the Van Buren post office. We will be there from 7:00 to 10:30 p.m.--so be sure to bring a smile (or a frown!) for the TV cameras.

There are plenty of reasons to detest America's absurdly complex and cumbersome federal income Tax Code:

• Most American taxpayers rightly detest a system that causes them to waste whole days -- and sometimes weeks -- in filling out tax returns. Nationally, the current federal Tax Code costs us close to a half trillion dollars a year in compliance costs and other deadweight losses.

• Citizens who favor clean government abhor the fact that Washington, D.C. has become a swarming hive, filled with tens of thousands of special-interest lobbyists who seek to benefit their clients by cutting even more holes into the "Swiss cheese"of the current Tax Code. Citizens know that every special-interest tax dodge makes it that much harder to cut taxes for all Americans.

• Fair Taxers hate the fact that the income tax punishes work, savings, and investment, when a viable consumption tax proposal -- the Fair Tax -- is already on the table (www.fairtax.org).

• Flat Taxers hate the absurd complexity of the current system, when flat taxes have boosted productivity and growth in a dozen countries around the world, including Hong Kong, Estonia, and Iceland. Flat taxes have also been shown to reduce both legal and illegal tax avoidance.

• Proponents of limited government abhor a tax system that hides its costs so that people do not understand the damage that heavy taxes cause to our economy and to our freedom.

• Some detest the ever-increasing financial and time burden imposed by the Tax Code that reduces their ability to tithe their money and time to support the churches, charities and issues of their choice.

• Opponents of illegal immigration revile the income tax because it is the one tax that is most easily evaded by illegal aliens.

• American workers and business owners feel betrayed by a costly and complex system that makes them less competitive against foreign companies and foreign laborers.

• Environmentally conscious people are beginning to hate the federal income tax because it devours extra income that would otherwise make it financially easier for consumers to choose to purchase alternative green goods, which are typically more expensive.

Despite widespread popular disgust with the federal income Tax Code, the United States Congress has failed, April after April, year after year, to enact fundamental reform.

Help Us Protest the Federal Income Tax

Where: Van Buren post office 4949 E. Van Buren -- near 202 and 44th Street in Phoenix

When: 7:00 p.m. to 10:30 p.m. Note: Bring your own signs, or use some of ours. Be sure to bring a smile (or a frown!) for the ten o'clock TV news crews when they come to film the last-minute tax filers.

RSVP: For details, or to let us know you will be coming, reply to this e-mail. Or contact AFT executive director Tom Jenney by e-mailing vc@aztaxpayers.org or calling (602) 478-0146.

If you live outside of Maricopa County, and want us to help you organize a protest in your county, reply to this email. Or contact AFT executive director Tom Jenney by e-mailing vc@aztaxpayers.org or calling (602) 478-0146.


March 15, 2007

Taxpayer Day at the Capitol


THANKS to everyone who showed up at the Capitol on March 15. Arizona's legislators hear every day from hundreds of lobbyists who want the government to spend more of your hard-earned money on various tax-takers and special interests, or to tilt the regulatory playing field in order to give advantages to politically-connected businesses. The Arizona Federation of Taxpayers and Americans for Prosperity were proud to give ordinary citizens and taxpayer activists a chance to voice their concerns about the growth of government and learn more about how to influence the legislative process.

Click here for a summary of the day's schedule.


February 14, 2007

Arizona Needs a Spending Limit


"Those who oppose HCR2025 believe that government should be allowed to grow faster than the state economy—in other words, they're arguing that government should be allowed to spend our money faster than we can earn it. That stance is neither moderate nor fiscally responsible."

--Chad Kirkpatrick and Tom Jenney, in AFT's latest op-ed. Thanks to Hot AZ It Gets for posting the column.


February 8, 2007

Spending Limit Reform Passes House Approps Cmte


PHOENIX—The Arizona Federation of Taxpayers today thanked members of the House Appropriations Committee for passing HCR2025, a bill that would give Arizona voters a chance to lower Arizona's current constitutional spending limit. "HCR2025 is an important stopgap measure that will halt the runaway spending increases of recent years," said AFT chairman Chad Kirkpatrick. "We all have to live within our means, and so should our state government."

Testifying in favor of the referendum bill yesterday, AFT executive director Tom Jenney pointed out that state spending as a percent of state personal income growth has been increasing rapidly since FY 2003, because spending has been growing at a much faster rate than personal income. During the last four years, spending subject to the limit has grown at an annual average rate of 14.3 percent, while personal income has only grown at 7.7 percent. "Apologists for runaway government spending may argue that the rapid spending increases in FYs 2004-2006 were necessary to return spending to pre-recession levels," Jenney wrote, "but it is clear that we are now spending significantly more as a percentage of personal income than we were before the recession."

Jenney also pointed out that HCR2025 is a moderate reform, especially compared to the Taxpayer Bill of Rights, or TABOR. Under TABOR, government spending increases would be limited to the rate of growth of population plus inflation, which is nearly always slower than the rate of growth of personal income. Thus, TABOR would cause state government to shrink slowly as a portion of state personal income. By comparison, HCR2025's personal income limit simply requires that state government stop expanding as a portion of the state economy.

The current constitutional spending limit is 7.41 percent of state personal income. HCR2025 would bring the limit down to 6.4 percent.

Members of the committee voting in favor of the bill were Reps. Kirk Adams (R-Mesa), Andy Biggs (R-Gilbert), Judy Burges (R-Sun City), Doug Clark (R-Anthem), Trish Groe (R-Lake Havasu City), John Kavanagh (R-Scottsdale), Nancy McLain (R-Bullhead City), Rick Murphy (R-Glendale), Russell Pearce (R-Mesa), and Jerry Weiers (R-Litchfield Park).

Members of the committee voting against the bill were Reps. Olivia Cajero Bedford (D-Tucson), Cloves Campbell (D-Phoenix), Phil Lopes (D-Tucson), Linda Lopez (D-Tucson), David Lujan (D-Phoenix), Pete Rios (D-Pinal County), and David Schapira (D-Tempe).

Jenney's written testimony is available here.


February 1, 2007

Legislative Conference Call


Thanks to everyone who called in and helped to make our first monthly legislative conference call such a success!

During the call, House Approps Chair Russell Pearce (R-Mesa) and Senate Approps Chair Bob Burns (R-Peoria) gave us updates on the budget process, as well as progress reports on key bills, including:

HCR 2025, which would give voters a chance to lower the state's existing constitutional spending limit, for which Rep. Pearce is the lead sponsor.

HB 2336, which would reduce the job-killing corporate income tax from 6.9 to 6.62 percent.

HB 2337, which would make further reductions in all of Arizona’s personal income tax rates.

HB 2218, which would allow parents to use a tax credit if they home-school their children, introduced by lead sponsor Rep. Marian McClure (R-Tucson, Cochise County).

SB 1027, which would zero out the county equalization property tax rate permanently.

SB 1028, which would accelerate the reduction in the class one (commercial property) assessment ratio, bringing it down to 20 percent by 2010, instead of the 2014.

SB 1635, which would allow for the creation of High-Occupancy/Toll lanes ("FAST" lanes) on Arizona highways.

January 18, 2007

The Guv's Budget is "Way Out of Bounds"


AFT Budget Update

We will start by saying three nice things about Gov. Janet Napolitano's proposed budget:

1) The governor's proposed budget of $11.4 billion is only (only!) a 12-percent increase in spending over last year. Last year, she started the session by asking for a monstrous 22-percent increase in spending, and in negotiations with the Legislature, that was shaved that down to a 20-percent increase—or a 15-percent increase, depending on how one counts the rainy day fund deposit.

2) The governor has not recommended raiding the rainy day fund in order to pay for current projects, as some in the Legislature are considering.

3) The governor's efforts to expand socialist medicine through AHCCCS and KidsCare do not seem to be as ambitious (yet) as the ones proposed by Gov. Schwarzeneggar in California.

That said, the governor's budget is way out-of-bounds as far as fiscal responsibility is concerned. To begin with, 12 percent is an outrageous rate of growth for government, especially when state personal income (a rough measure of the Arizona economy) has only been growing by about seven percent annually in recent years. And 12 percent is more than twice as fast as the combined rate of growth of population and inflation.

In fact, 12 percent annual growth is dangerously close to the average growth of Arizona government during the last four years. Using figures from the governor's OSPB, we can see that during the last four years, spending has grown at an annual average of 14.3 percent, while personal income has grown at 7.7 percent. Apologists for runaway government spending may argue that the rapid spending increases in FYs 2004-2006 were necessary to return spending to pre-recession levels, but it is clear that we are now spending significantly more as a percentage of personal income than we were before the recession. Indeed, the last time we spent close to this level was in 1995, and before that, in 1989.

As we can see in this graph, if Arizona government continues to spend at the average rate established during the last four years, by FY 2009, the state will hit its constitutional spending limit of 7.41 percent of personal income. If Arizona begins spending in the range of seven percent of personal income, we will be back to the spending levels of the 1980s, when Arizona was a high-taxing, high-spending state that had difficulty attracting new companies.

One element of good news on the budget front is that Arizona's revenue growth appears to be slowing down considerably from last year, due in part to a cooling real estate market. That should mean that the governor and Legislature will have less money to play with. But the governor hopes to achieve her $11.4 billion budget with over a half billion dollars in new borrowing. (AFT is against new borrowing, and against raiding the rainy day fund. Worthy transportation projects, such as new freeway construction and added lane capacity, should be bidded out to private companies and financed with toll income.)

Gov. Napolitano's penchant for overspending stems from her desire to fund statist public policy proposals. For someone who talks so much about the 21st century, the governor supports a lot of public policies that were proven failures in the 20th century. Her ideas about central planning of economic growth—the "Growth Cabinet," the government investment fund, the biomedical slush fund—are ones that should have gone out of style in the 1930s. The governor is a big fan of mass transit, with an emphasis on rail transit, even though mass transit in America has been in steady decline since the end of World War II. She proposes throwing more taxpayer money at public education, including raising the starting pay for new teachers (who by definition have no track record of performance). But while the idea of throwing money at education may have seemed promising to some in 1960, four decades of experience have shown it to be a total failure in improving student performance.

There are plenty of market-oriented public policy ideas that would limit Arizona's government and free up the productive, poverty-fighting potential of our private economy. AFT's top policy priorities include eliminating Arizona's job-killing personal and corporate income taxes, putting firm restraints on property taxes, strengthening Arizona's constitutional spending limit, improving the quality and efficiency of education by expanding school choice, allowing Arizonans to use any private health insurance plan approved in the fifty States, and putting limits on the taxpayer-funded lobbying that drives so much wasteful spending.

Unfortunately, the governor has shown little interest in market-oriented policies. It seems that if good legislation is going to come out of Arizona's political process this year, it will have to come from the Legislature.

January 10, 2007

Arizona's Glass is More Than Half Full


By Chad Kirkpatrick and Tom Jenney
Posted on Sonoran Alliance, January 10, 2007

How can we be optimistic about the prospects for limited government?

At the Arizona Federation of Taxpayers we get this question from reporters, lobbyists, politicians, donors, and hundreds of grassroots taxpayer activists statewide.

Looking at recent political events in Arizona, there seems to be little reason for optimism. Last June, Governor Napolitano and the Legislature passed a $10.1 billion budget--a record 20 percent increase in expenditures. In November, voters approved a job-killing minimum wage and an 80-cent-a-pack tax increase on cigarettes that is guaranteed to increase tax avoidance and smuggling. Although voters approved restrictions on eminent domain and arbitrary land-use regulations, they also voted for massive government interference in the affairs of bar and restaurant owners.

Short-term trends do not make the picture any rosier. The state budget has increased by 12 percent annually during the last four years, significantly faster than Arizonans' personal income, and more than twice as fast as the combined growth of population and inflation. On the Tax Foundation’s 2007 State Business Tax Climate Index, Arizona had only the 28th healthiest business tax climate in the country, bested by regional competitors such as Nevada, Texas, Colorado, Utah, and New Mexico.

Legislative leaders did goad the Governor into signing a modest ten percent income tax cut and some decent property tax cuts, but there is still a sizeable surplus, which means rapid budget increases could continue until the next recession, when revenues will fall off, forcing our politicians to choose between deep budget cuts and tax increases. Faced with that choice, it's possible that our politicians would again use creative accounting to avoid raising taxes, but it's a fair bet that there would not be much stomach for big budget cuts.

Again, how can we be optimistic?

First, the realities of the global economy will force Arizona to become more competitive. With the ever-increasing mobility of capital and labor, Arizona can no longer take comfort in having lower taxes than California. We must strive to create a tax and regulatory climate so inviting that American companies think of moving to Arizona before they think of moving offshore. At AFT, we believe that Arizonans have the vigor and vitality to save ourselves from increasing statism and stagnation.

Second, there is no shortage of good ideas for limiting Arizona's government and freeing up the productive potential of our economy. AFT's top policy priorities include eliminating Arizona's job-killing personal and corporate income taxes, putting firm restraints on property taxes, strengthening Arizona's constitutional spending limit, improving the quality and efficiency of education by expanding school choice, allowing Arizonans to use any health insurance plan approved in the fifty States, and putting limits on the taxpayer-funded lobbying that drives so much wasteful spending.

Third, the evidence continues to pile up in favor of limited-government solutions for most social problems. Many studies in recent years have demonstrated a strong correlation between slower growth in government spending and stronger economic growth. Recently, the Goldwater Institute's Matt Ladner presented evidence showing that states with slower growth in government spending also do better at reducing poverty rates. That correlation has been long recognized (if often ignored) at the international level, but Ladner's study breaks new ground by making the case at the interstate level. To the extent that Arizona's policymakers and opinion leaders pay attention to empirical data, the proponents of increased welfare spending should now be on the defensive.

Finally, Arizona is blessed to have taxpayer activists and generous philanthropists who refuse to give in to the Big Spenders. In 2007, those activists and philanthropists will join forces in a new partnership between AFT, which has represented the Arizona taxpayer since 1978, and Americans for Prosperity, the nation's premier free-market grassroots organization. Together, AFT and AFP will generate strong grassroots pressure to reduce the size and scope of Arizona government and to make room for a truly free and dynamic private economy.

If an optimist sees the glass as half full, put us down as more-than-optimists. As we see it, Arizona's glass is more than half full.

--Chad Kirkpatrick is chairman and Tom Jenney is executive director of the Arizona Federation of Taxpayers (www.aztaxpayers.org), a state chapter of Americans for Prosperity.

January 4, 2007

AFT Promotes Legislative Priorities

Make Taxes, Spending Limit Priorities
By Chad Kirkpatrick and Tom Jenney

(A version of this op-ed appeared in the East Valley Tribune on Sunday, December 31.)

The Arizona Federation of Taxpayers believes these issues should be the Legislature’s top priorities:

Income Tax Elimination

We propose replacing Arizona’s personal and corporate income taxes with a low, broad-based retail sales tax (no higher than five percent). This reform has been discussed in Arizona for at least three years now (see the Goldwater-Roubik study for model projections), and was a gubernatorial campaign issue. Elimination of the state’s income taxes (including the volatile, job-killing corporate income tax) in favor of a consumption tax would be single most effective measure Arizona could take in an effort to encourage growth on a vibrant, diversified economic base.

Update Arizona’s Spending Limit

Since the last recession, Arizona’s general fund has seen average annual spending increases of 12 percent. If allowed to continue growing at that rate, by 2009 the state budget will hit the state’s current spending limit, which is 7.41 percent of personal income. The current spending trendline threatens to return Arizona to the big-government days of the 1980s. A related problem with rapid budget increases during a boom time is that they are inevitably followed by painful budget cuts in the succeeding recession—a cycle that turns the state budget into a scary rollercoaster ride. Faced with making painful budget cuts, many of our politicians will want to cave in and raise taxes. Tax increases would complete the return to the policies of the 1980s, when Arizona was not a competitive state, taxwise. To prevent those developments, AFT urges Arizona legislators to update Arizona’s current spending limit, adjusting it down from 7.41 to no higher than 6.5 percent of personal income. 6.5 is a moderate limit--every budget from FY2000 to FY2006 would have qualified (see chart).

At the same time, Arizona should continue to explore the possibility of limiting state budget growth to the rate of growth of population plus inflation. Combined with the rainy day fund, this reform would help to reduce the extreme highs and lows of the budget cycle, while ensuring that the private economy grows more quickly than the governmental sector.

Property Tax Limits

An explosive issue in 2006, property tax reform will reignite in 2007, when tax levies are applied to the 2006 assessed values. Property tax reform is very popular—especially Prop 13-style caps on assessed value growth—but property tax reform is also very complicated (due to educational equalization and the nature of the formulae), and often involves shifting tax burdens between different property classes and from property taxpayers to income and sales taxpayers. AFT urges legislators to look at all factors in the property tax equation: 1) capping assessed value growth; 2) reducing rates; and, 3) tightening levy limits for all categories of taxation.

School Choice

Because education is the state’s largest budget item, school choice is a key fiscal policy initiative. Further, school choice is the only proven means of improving student performance and creating the human capital necessary for the future of the Arizona economy. Four decades of evidence shows the utter failure of increased government expenditures in improving student performance. To expand the menu of choices available to students and parents, AFT urges legislators to create a universal voucher system, expand the state’s scholarship tax credits, and create a tax credit for parents who home-school their children.

Health Care

Rather than continuing to tinker in a piecemeal way with health insurance reforms, and rather than roping yet more Arizonans into the semi-socialist Medicaid/AHCCCS system, Arizona should open itself unilaterally to the interstate private health insurance market. Arizona health insurance consumers should be allowed to buy into any private health plan certified by any government in the 50 states. By increasing competition fiftyfold, we will greatly increase the ability of the uninsured to find economical and portable insurance plans that meet their specific needs. U.S. Rep. John Shadegg has recommended implementing a similar reform at the congressional level, but that is unlikely to make any progress in the current Congress, so Arizona should lead the way.

--Chad Kirkpatrick is chairman, and Tom Jenney is executive director, of the Arizona Federation of Taxpayers, a state chapter of Americans for Prosperity.

December 12

AFT Joins Forces with Americans for Prosperity

The Arizona Federation of Taxpayers (AFT) has entered into an official partnership with the national free-market grassroots group Americans for Prosperity (AFP). The partnership is designed to make Arizona taxpayers more powerful in the fight for lower taxes, lighter regulations, and lower government spending at the state and national levels.

"This partnership is a great deal for the taxpayers of Arizona," said AFT chairman Chad Kirkpatrick. "Arizona taxpayers will have a louder voice here at home, and we'll have a louder voice in Washington."

AFT will serve as AFP's 17th state chapter, with operations conducted by AFT executive director Tom Jenney. AFT, which has published the annual "Friend of the Taxpayer" legislative report card for 22 years, will continue to provide Arizona taxpayers with policy expertise and intellectual ammunition in battles for economic freedom at the state and local levels. AFP will augment AFT's efforts by providing expert grassroots training, as well as communications, marketing, and federal public policy support.

AFP president Tim Phillips was enthusiastic about the partnership's ability to improve Arizona's tax, regulatory, and spending policies. "The Arizona Federation of Taxpayers has a long track record of fighting for Arizona taxpayers," Phillips said, "and the addition of AFP's resources will greatly increase the scope and effectiveness of its grassroots activities."

In its three years of existence, Americans for Prosperity has already chalked up a number of major victories by its state chapters, such as helping defeat proposed tax hikes in Kansas, Missouri, Oklahoma, and California, limiting taxpayer-funded lobbying in Texas, and becoming the national grassroots leader in promoting state tax-and- spending limits.

AFP also conducted its highly visible "Ending Earmarks Express" road tour this year, visiting the sites of wasteful federal pork-barrel projects in 37 states, including Arizona. The tour included visits to such unnecessary pet projects as the "Railroad to Nowhere" in Mississippi, the infamous "Bridge to Nowhere" in Alaska, and the world's largest teapot museum in North Carolina. AFP's efforts aided in the passage of significant earmark reform in Congress and the removal of some $15 billon in wasteful pork- barrel spending from an emergency spending bill.

About Americans for Prosperity

Americans for Prosperity (AFP) is the nation's premier grassroots organization committed to advancing every individual's right to economic freedom and opportunity. AFP believes reducing the size and scope of government is the best safeguard to ensuring individual productivity and prosperity for all Americans. AFP educates and engages citizens in support of restraining state and federal government growth, and returning government to its constitutional limits.

Visit AFP's website.

November 18th

2006 Awards Luncheon featuring Steve Moore

Thanks to the 200 guests who joined us for lunch on Saturday, November 18th, as we celebrated the best, worst, silliest and strangest legislation of 2006.

This year's keynote speaker was Wall Street Journal editor Stephen Moore, a Cato Institute senior fellow and founder of the Club for Growth. Among many subjects of interest to taxpayer activists, Moore showed us some silver linings in the Nov. 7th Congressional ballot results.


November 7th

AFT Analysis of 2006 Ballot Propositions

AFT's guide to Arizona's 2006 ballot propositions divides ballot measures into those that will lower the cost of tax and regulatory burdens imposed on Arizonans by state and local government, those that will increase tax, spending and regulatory burdens, and those that are neutral or have unclear fiscal implications.
For Props that will decrease burdens, click here.
For Props that will increase burdens, click here.
For Props that are neutral/unclear, click here.
Shorter guide to all 19 props here.

October 26st

AFT: RES is unconstitutional, poorly planned, costly, and will raise taxes

PHOENIX--The Arizona Federation of Taxpayers (AFT) today submitted a public comment letter to the Arizona Corporation Commission (ACC), expressing its strong opposition to the Renewable Energy Standard and Tariff (RES). The RES, which the group refers to as the “Alt Fuels” standard, would force the state’s electric utilities to obtain 15 percent of their energy from alternative energy sources, such as wind and solar, by the year 2025. AFT filed its letter in preparation for tomorrow’s Special Open Meeting to consider and vote on an administrative law judge’s Recommended Opinion and Order on the RES.

“Under the Arizona Constitution and under statute, the ACC is a rate making body and cannot extend its regulatory authority without legislative approval or constitutional changes,” said AFT chairman Chad Kirkpatrick. “RES goes beyond the ACC’s rate making authority by forcing business decisions on private utilities.” Further, said Kirkpatrick, the ACC failed to conduct proper due diligence when it failed to commission an independent economic impact study of RES.

AFT executive director Tom Jenney argued that the cost of RES is prohibitive, given existing technology. “Virtually every renewable source of energy is significantly more expensive than conventional sources,” Jenney said. “If this were gasoline at the pump, instead of kilowatt-hours, we would be talking about ten dollars a gallon.” Jenney cited Arizona Public Service estimates that its cost to implement the RES requirements will average between $60 and $75 million per year over the next 10 years, while the ACC’s proposed surcharge will produce only $37 million on average. Estimated shortfalls will get worse as the RES requirement increases in later years. Tucson Electric Power estimates that between $4.5 and $7 billion will have to be collected from its ratepayers.

“We have serious concerns that the surcharge to ratepayers will have to be increased dramatically to allow regulated utilities to meet the demands of RES without going into bankruptcy,” Jenney said. Jenney also questioned the distributed generation (DG) rule under RES, calling it a possible regressive tax on ratepayers. The DG rule contains a rebate for homeowners who purchase rooftop photovoltaics. Given the exorbitant price of rooftop photovoltaics, Jenney argued, only a wealthy few will be able to purchase them and take advantage of the rebate. “However,” he said, “all ratepayers will end up subsidizing the use of that technology by the few.”

In February, a majority of commissioners (Mayes, Mundell, and Spitzer) voted for the RES, justifying it as an environmentally-friendly policy that would help Arizona move toward energy independence.

To view AFT's public comment letter, click here.

 

October 21st

Arizona’s business tax climate in bottom half of country.  The Tax Foundation has just released 2007 State Business Tax Climate has Arizona’s tax environment better than California (no surprise), but worse than all our neighbors.

 

Tax-cutting yourself to prosperity.  The American Shareholder’s Association shows the success of the Bush tax-cuts.

 


2003 Bush Tax Cut: By The Numbers
Historic Tax Cut Boosts Growth, Lifts Stock Market, and Increases Jobs


$14,374,330,000,000

Total Increase in Household Wealth Since April 2003

$5,700,000,000,000

Total Increase in Shareholder Wealth Since May 20, 2003

$863,654,000,000

Total Amount of Tax Cuts Enacted Since Fiscal Year 2003

$783,890,000,000

Total Amount of Additional Tax Cuts to be Returned to Taxpayers Through 2010

$625,000,000,000

Total Increase in Federal Tax Revenues Since FY 2003

$207,788,000,000

Reduction in the Deficit in the Past 29 Months Due to Stronger Economic Growth

300,001,643

Total Number of Americans benefiting from President Bush’s Tax Cut

6,600,000

Number of Jobs Created Since the Tax Cut Was Signed Into Law

$2,092

Tax Increase for a Family of Four With $50k of Income if Tax Cuts Are Repealed

200

Number of House Members Who Voted Against This Growth Generating Tax Cut

50

Number of US Senators Who Voted Against This Growth Generating Tax Cut

74.0%

% Increase in S&P 500 Companies Boosting Their Dividend Since 2002

51.2%

% of Total Tax Cut "Cost" That Has Been Recouped From Higher Levels of Growth

4.6%

Unemployment Rate Which Continues To Disprove the Constant Economic Pessimism

3.7%

% Average Quarterly GDP Growth Since Tax Cut Was Enacted (long run average is 3.3%)

 

Notice the increase in tax revenues is almost equal to the tax cuts.  Facts are tough on big government liberals.

 

September 26th

State Spending to Hit Highest Levels Since the 1980s

PHOENIX—The Arizona Federation of Taxpayers (AFT) called today for updating Arizona's constitutional spending limit. According to Gov. Janet Napolitano's budget office, state spending is nearing 6.8 percent of state personal income, the highest level since before Gov. Fife Symington took office in 1990. If spending continues to increase on the trend line established during the last four years, AFT argues, state government spending by 2009 will reach 7.41 percent of personal income, a limit established by constitutional amendment in 1979. (See graph.)

"We are in danger of busting a Jimmy-Carter-era spending limit," said AFT executive director Tom Jenney. "Clearly, that limit is way too high and needs to come down." AFT is exploring a constitutional amendment that would bring the spending limit down to 6.5 percent of personal income. AFT argues that 6.5 percent is a modest limit, because appropriations subject to the limit were lower than 6.5 percent in all of the fiscal years from 1996 to 2005. "Best of all," Jenney said, "The legislation would be as simple as crossing out 7.41 and putting in 6.5. That's as 'single subject' as it gets."

Figures released in February by Gov. Janet Napolitano's budget office show that the last time Arizona government spent 6.8 or more of percent of personal income was in 1989. It also hit that mark in 1981, 1987, and 1988.

"We're on track to erase all of the gains achieved during the 1990s by Gov. Symington's tax reductions," said AFT chairman Chad Kirkpatrick. "If the government is allowed to grow to the relative size it attained in 1980s, that will hurt the state’s future economic growth." Since 2002, appropriations subject to the limit have been growing almost twice as fast (14.3 percent annually) as state personal income (7.7 percent annually).

    

 

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The Arizona Federation of Taxpayers is a nonproft Arizona corporation. Americans for Prosperity is a 501c4 nonprofit lobbying organization. Americans for Prosperity Foundation is a 501c3 nonprofit educational foundation. Contact: Arizona Federation of Taxpayers, One East Camelback Road, Suite 550, Phoenix, AZ 85012, or by contacting the AFT executive director at (602) 478-0146.