Archives for March 2016

ATRA: AG Audit Harshly Critical of GPLET

ATRA

By Jennifer Stielow

A recent audit by the Arizona Auditor General (AG) revealed many critical flaws surrounding the calculation, collection, distribution, and reporting of the Government Property Lease Excise Tax (GPLET).

According to the AG’s review of 268 leases, nearly half are currently under eight-year abatement; and therefore, no revenue is being collected. Forty-five percent of the leases examined are paying GPLET under the rate structure that existed prior to 2010 that imposes a dramatically lower tax burden than the current GPLET rates. Of all the leases audited, only 16 (6%) are subject to the new GPLET rates. As a result, the AG found that the 2010 GPLET revisions have not resulted in increased revenue as expected because so few leases pay tax under the new rate structure.

Additionally, the AG found many examples where the incorrect GPLET was calculated because either the wrong rates were used and/or not all of the property subject to GPLET was included. In fact, in certain instances lessees failed to remit GPLET payments altogether.

The audit also found that the distribution of GPLET revenues by county treasurers was done incorrectly by using the distribution percentages for property tax rather than GPLET, which are different. Furthermore, although county treasurers are required to assess penalties and interest on delinquent payments, none did so.

There are several reporting requirements under GPLET, one of which requires county assessors to annually report the value of all GPLET property, which includes properties under abatement, to the Arizona Department of Education (ADE). The AG found that only three of the seven counties that have GPLET deals reported the valuation of GPLET properties to ADE. This is a major cause for concern since underreporting GPLET values to ADE requires the state general fund to pay more in state aid payments to school districts than otherwise required. Overall, auditors’ interviews with city, town, and county officials indicated a general lack of understanding of GPLET requirements and recommended the Legislature modify statutes to address GPLET deficiencies.

This special audit was a requirement of the 2010 legislation that enacted several revisions to GPLET. The purpose of the audit was to determine if the revisions resulted in a viable revenue source in lieu of an ad valorem property tax on possessory interests for counties, cities and towns, community colleges, and school districts.

Originally enacted in 1996 as a successor to the possessory interest tax, GPLET allows government to enter into lease agreements with private entities to use government-owned property for private use and be subject to an excise tax in lieu of a property tax. By 2010, cities had dramatically expanded their use of the eight-year abatement. Additionally, the tax liability under the existing GPLET rate structure was not only considerably lower compared to the property tax, but the entire tax obligation disappeared at fifty years.

In an effort to address some of the inequities with GPLET, the 2010 legislation limited the size of Central Business District (CBD) boundaries for leases who qualify for the eight-year abatement. A new rate structure was implemented that nearly doubled the existing rates, and while rates under the old structure dropped 20% every ten years until reaching zero by the fiftieth year, the new rates are adjusted annually by the producer price index for new construction indefinitely. Finally, the legislation prospectively limited GPLET deals to a maximum of 25 years, including any abatement period, at which time the government lessor is required to convey the property to the prime lessee and the property is then placed on the property tax rolls.

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The Arizona Tax Research Association (ATRA) is the only statewide taxpayer organization representing a cross section of Arizona individuals and businesses. Organized in 1940, ATRA is the largest and most respected independent and accurate source of public finance and tax policy information. ATRA represents taxpayers before policy makers at the state and local level. ATRA’s fundamental belief is that every governmental expenditure is directly related to a tax. ATRA’s goal is efficient statewide government and the effective use of tax dollars through sound fiscal policies.

POLL: Donald Trump on Track to win Arizona

MBQF

Trump and Cruz supporters bullish on the future of the party

(Phoenix, AZ) — MBQF, a public affairs consulting firm, announced the results of a recent survey concerning the remaining four GOP candidates for president of the United States of America.

The results from the survey show high efficacy primary Republican voters across Arizona represented by likely 2016 turnout models.

In the most recent automated telephonic survey of 751 high efficacy primary republican voters, conducted on March 8, 2016, the survey calculates a 3.57% theoretical margin of error, plus or minus in percentage points, 95% of the time.

PPPPoll

Michael Noble, consultant and pollster, issued the following statement, “With early voting already underway in Arizona, Donald Trump leads with both those voters that have already cast ballots as well as among those that are still planning on voting.”

Noble added, “In addition to the ballot test, we also asked both groups whether they believed if the Republican party’s best days were ahead of them or behind them. The survey found that the majority of those supporting Donald Trump and Ted Cruz felt the party’s best days were ahead of them while those supporting Marco Rubio and John Kasich felt the opposite. This finding was consistent between both groups. ”

For more information about this survey, or a summary of topline data and wording, please contact MBQF Consulting. The margin of error for this survey is +/-3.57%.

Rep Martha McSally on Fight to Restore Eligibility for WASP’s

Congresswoman Martha McSally is leading the fight to restore the eligibility of  WASPs’ to be buried in Arlington National Cemetery. Sponsored by McSally, H.R. 4336, has obtained the bipartisan cosponsors of 141 members in the House as well as the endorsement of several veterans, military, and women’s advocacy groups. Here is the video of her interview on CBS:

Ballot Harvesting Tactics Illegal: New Law Will Eliminate Opportunity for Election Tampering

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Practice of Ballot Harvesting — Where Campaign Workers Personally Collect Ballots from Voters During Elections — to Be Banned by New Legislation
 
PHOENIX – This afternoon Chairman Robert Graham of the Arizona Republican Party thanked the members of the Arizona State House of Representatives and the Arizona Senate for passing a bill to ban ballot harvesting. Ballot harvesting is a tactic used by some campaigns to send people door-to-door and neighborhood-by-neighborhood to collect ballots from unwitting voters.
 
Once in the hands of campaign staff, the ballots are vulnerable to tampering, or even being discarded if they are opened and found to be supporting an opposing candidate.
“We’ve stopped ballot harvesting and that’s great news for all voters and the public,” said Arizona Republican Party Chairman Robert Graham. “I’ve worked hard as Chairman of the Arizona Republican Party to come up with a solution to a problem that has the potential to destroy our election system and ruin the faith that we have in a democracy where every vote counts. We worked diligently and respectfully with legislators on both sides of the aisle, and both sides of the issue, and I especially thank Rep. Michelle Ugenti-Rita for putting the bill together, and greatly appreciate her colleagues in the House and Senate for supporting the integrity of our election process.”
 
All Arizona voters are entitled by law to vote in person or by a mailed-in ballot that comes with a postage-paid envelope. Ballots are mailed to voters about a month before each election, which previously gave campaigns ample opportunity to canvass neighborhoods and attempt to collected vote or unvoted ballots from individuals. The bill, HB2023, makes this practice a criminal act, but exempts caregivers or those delivering ballots for family members or roommates.
“This legislation reforms our election laws in a way that restores the public’s respect for a process that had potentially dangerous implications and provided too much opportunity for fraud and tampering with an election. It’s fitting to ensure that those who commit a crime by tampering with any ballot, or defrauding a voter to get them to give up their ballot, will be punished,” Graham added. “Voting in an election is considered a sacred process and one that must have integrity, security and legitimacy.”

Supervisor Denny Barney Endorses Andy Biggs’ Congressional Campaign

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Marks 28th endorsement for the Senate President

PHOENIX (March 9) – Maricopa County Supervisor Denny Barney today announced his endorsement of Andy Biggs. His support joins 27 other elected officials and more than 60 East Valley Grassroots leaders.

“I have been fortunate to know Andy for many years and can attest to his solid character,” Denny Barney said. “As an elected official and Senate President he has always been responsive to any issue that has crossed his desk. He has also shown an ability to build a strong consensus on issues important to taxpayers such as tax reform, pension reform, and working to protect the life of the unborn. Andy Biggs is the type of leader the East Valley needs in Washington. He has integrity and is a proven conservative. I am proud to endorse his candidacy for U.S. House of Representatives.”

“Denny Barney has poured out his heart and soul for the East Valley, and I am so excited to received his endorsement,” Andy Biggs said. “Denny’s service at the Maricopa County Board of Supervisors has paid great dividends for our side of town, and I know that he will continue to accomplish great things for the East Valley. I look forward to partnering with him in the future to bring even more opportunity to the East Valley.”

Other endorsements for Biggs include: Congressman Matt Salmon; Congressman Trent Franks; Maricopa County Sheriff Joe Arpaio; Maricopa County Attorney Bill Montgomery; Phoenix Councilman Sal DiCicci; senators Sylvia Allen, Nancy Barto, Judy Burges, Debbie Lesko, Gail Griffin, Steve Yarbrough, David Farnsworth, John Kavanagh, Steve Smith, Jeff Dial, Kimberly Yee, Don Shooter; representatives John Allen, Sonny Borrelli, Jay Lawrence, Paul Boyer, Warren Petersen, Eddie Farnsworth, Frank Pratt; Gilbert Vice Mayor Jared Taylor; Gilbert Councilman Victor Peterson; and Queen Creek Councilwoman Emilena Turley.

ACTION ALERT – Call your legislator today!

 

Arizona Republicans need to hear from YOU about an urgent vote expected tomorrow on SB 1316!

If you haven’t been paying attention to SB 1316, it’s time to start. This hot-button bill has special interest groups running around the Capitol Complex with their pants on fire, telling lies to your Republican lawmakers and pressuring them to oppose this important bill.

SB 1316 offers Arizonans an additional financial choice, called a flex loan, in times of need. Not surprisingly, liberal legislators and controlling special interest groups ignore the facts as they attempt to blow up this bill and limit your lending choices.

WHY? The truth is Democrats and their special interest cronies want to limit your financial lending choices to just one option – the government!

That’s right – those socialists think you’re too dumb to make your own financial decisions. And they think THEY know better than you… and that a nanny state is the solution to every problem.

FACT: Flex loans would give Arizonans protected access to smaller-dollar loans in a legal, well-regulated marketplace.

When an emergency strikes, like a needed A/C repair or unexpected healthcare cost, cash-strapped Arizonans should have as many lending options as possible. A flex loan is simply one additional option.

Your elected representatives need to hear from you about the importance of voting for financial choice and freedom. They need to vote YES on SB 1316!

Call your legislator today and tell them keep the government’s hands out of your finances, and to vote YES on SB 1316!

Name District Party Phone (602)
J. Christopher Ackerley 2 R 926-3077
John M. Allen 15 R 926-4916
Brenda Barton 6 R 926-4129
Sonny Borrelli 5 R 926-5051
Russell “Rusty” Bowers 25 R 926-3128
Paul Boyer 20 R 926-4173
Kate Brophy McGee 28 R 926-4486
Noel W. Campbell 1 R 926-3124
Heather Carter 15 R 926-5503
Regina Cobb 5 R 926-3126
Doug Coleman 16 R 926-3160
Karen Fann 1 R 926-5874
Eddie Farnsworth 12 R 926-5735
Mark Finchem 11 R 926-3122
Speaker of the House
David Gowan 14 R 926-3312
Rick Gray 21 R 926-5993
Anthony Kern 20 R 926-3102
Jay Lawrence 23 R 926-3095
Vince Leach 11 R 926-3106
Majority Whip
David Livingston 22 R 926-4178
Phil Lovas 22 R 926-3297
Javan D. “J.D.” Mesnard 17 R 926-4481
Darin Mitchell 13 R 926-5894
Majority Leader
Steve Montenegro 13 R 926-5955
Jill Norgaard 18 R 926-3140
Justin Olson 25 R 926-5288
Warren H. Petersen 12 R 926-4136
Franklin M. Pratt 8 R 926-5761
Tony Rivero 21 R 926-3104
Speaker Pro Tempore
Bob Robson 18 R 926-5549
Thomas “T.J.” Shope 8 R 926-3012
David W. Stevens 14 R 926-4321
Bob Thorpe 6 R 926-5219
Kelly Townsend 16 R 926-4467
Michelle B. Ugenti-Rita 23 R 926-4480
Jeff Weninger 17 R 926-3092

 

Bill to streamline and consolidate campaign finance laws passes state Senate

Phoenix, AZ – A bill to allow the Secretary of State’s office to crack down on illegitimate, unlawful political spending has passed the Arizona Senate.

“I’m pleased our campaign finance bill (SB1516) to root out unlawful political spending has passed the Senate,” said Secretary Reagan.  “Hopefully, If the bill passes the House and is signed into law by the Governor, our office will finally have the tools necessary to go after fly-by-night “convenience corporations” who show up in Arizona on Tuesday and start spending money on Friday in our elections.”

“The ability to differentiate between bad actors and perfectly legitimate companies exercising their basic right to speak is historic,” continued the Secretary.  “It’s concerning to many that institutional groups like the Cattlemen’s Association, Planned Parenthood, Chamber of Commerce or Sierra Club would have to hand over the personal information of their members and supporters to a government agency. These provisions strike the right balance between holding wrongdoers accountable and protecting legitimate not-for-profits from big brother tracking the issues and causes they support and deciding what political speech they wish to regulate.

“In conjunction with our revolutionary, soon-to-be-released campaign finance reporting system, citizens will better able to educate themselves about the connections between the people who write checks and the politicians that cash them.”

Sponsored by Senator Adam Driggs, SB1516 is a comprehensive rewrite of Arizona campaign finance law.  While provisions related to anonymous political spending are extremely important, the legislation also provides a clear, concise set of policies and procedures where citizens can easily find and understand the rules by which they can engage in political activity.

Arizona Legislature Finally About to Dismantle Corrupt Arizona Bar

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Reprinted from Townhall
By Rachel Alexander

Those of you who regularly read my columns know I have a special focus on progressives misusing the left-leaning legal system to destroy conservatives. Republican officials, prosecutors — even I was targeted because I was briefly assigned to represent Sheriff Joe Arpaio for three months as a deputy county attorney. I have now been under attack for over six years, with no end in sight. The shady State Bar of Arizona will not let me practice law until I pay $101k, the cost of disciplining me and my superiors. Because of this, people tell me I am now the “poster child for reform of the Bar.”

But this isn’t about me, I’m doing fine as a journalist. I simply cannot tolerate the unethical activity, and since I understand the legal system, the extent of the wrongdoing, and can speak out without fear of having my law license yanked, I feel a moral obligation to expose it and stop it.

As I covered in my column last week, conservatives are finally starting to make inroads into dismantling these totalitarian state bars, which essentially operate as unions in the 23 states where they are mandatory. The Nebraska State Bar association has had most of its authority removed, and the State Bar of North Dakota is currently embroiled in a lawsuit by The Goldwater Institute challenging its authority.

HB 2221 passed in the Arizona House last week, and will likely come up for a vote in the Senate this week, where it has a good chance of passing. Inside sources say conservative Republican Governor Doug Ducey will sign it. The bill does two things: 1) subjects the Bar to public records laws, and 2) protects attorneys’ free speech rights by requiring that mandatory dues be used only for regulation.

There are now at least three websites opposing the Bar, Working for a Better Bar, AZ Bar Watch and Arizona Attorneys Against Corrupt Professional Regulation. The Goldwater Institute, The Institute for Justice, and other respected organizations are actively pushing the legislation.

The Bar is going all out with its lobbyists — a misuse of money, since the Supreme Court ruled in Keller v. State Bar of California  that state bars cannot spend mandatory dues on politics — to persuade state legislators to vote against the legislation. Incredibly, they even got the Phoenix New Times, a sleazy alternative newspaper that used to make money from running ads for prostitution, to run a hit piece on me last week in an attempt to discredit the bill. Reporter Ray Stern, who writes relentlessly about me because he despises a fellow prosecutor who was targeted along with me who once got him arrested, actually admitted in his hit piece that the Bar’s hatchet man -er spokesman, Rick DeBruhl, pushed the story on him.

Strangely, Stern and the left-leaning media refer to this legislation as the “Andrew Thomas Revenge Bill,” an attempt to tie it to my former boss who was wrongly disbarred. Yet Thomas has had no involvement with the legislation.

This label in fact diminishes what the bill would accomplish. It is pioneering legislation that would, at long last, address in the same stroke liberal bias and corruption in the judiciary and bar associations that no one has been willing to confront. It is a reform that should sweep the nation. As a former congressmen said to me about it, “This reporter is forced to use you and Lisa as well as Thomas to discredit what really is needed reform. They shift and evade the truth. Classic drive-by yellow journalism.”

Mark Dixon, a former close friend of the Bar’s disciplinary judge, William O’Neil, has been tirelessly exposing O’Neil’s corruption over the last few years. With the exception of a couple of articles in The Arizona Republic, however, nothing has been done. As multiple attorneys have told me, this is because O’Neil “knows where the bones are buried” and the corruption likely goes all the way up to the Arizona Supreme Court.

O’Neil arranged a short sale of his mother-in-law’s house to eliminate $130,000 owed on it, then let her continue living in the house. An attorney who played a key role in the transaction was later arrested for killing a woman while drunk driving, and was sentenced to a year and a half in prison. Yet O’Neil permitted him to practice law almost the entire time he was in prison! The disciplinary panels O’Neil sits on consist of him and a couple others; a member of the public and an attorney. One of the panelists was a “close friend, neighbor and business associate” of O’Neil’s, which he never disclosed. That should have never been allowed. Dixon filed a long complaint with the judicial commission listing nine unethical actions by O’Neil, and they were all dismissed.

Multiple sources report that O’Neil was put in that position to destroy attorneys the Bar didn’t like, while going soft on attorneys it does like. There is a consistent pattern under his reign; attorneys who are suspended for just a few months are never to be allowed back into the practice of law. One attorney who was targeted because of her family ties to Republican politicians told me she suffered a heart attack from being put through the years of abuse.

Carmen Chenal, the alleged mistress of married former Attorney General Tom Horne, a liberal Republican, amassed a whole litany of misconduct as an attorney, but because she was connected through Horne, easily got her license reinstated by O’Neil. Horne, who is currently under investigation for allegedly turning the AG’s office into his campaign headquarters, was once caught by the FBI in a hit and run after leaving Chenal’s residence over lunch.

The Bar wastes lavish amounts of money. It has the second highest dues in the country of any mandatory bar, which increase every year. There are multiple diversity committees and extravagant annual conferences. The Bar spent $500,000 on a show trial against myself and my former two superiors, bringing in expensive out-of-state prosecutors and broadcasting the trial for two months. Members of the public who file complaints against attorneys favored by the Bar cannot get justice, their complaints are dismissed.   

A mysterious hit piece appeared in the newspaper smearing the lead sponsor of the bill, Rep. Anthony Kern, when he was attempting to get the bill passed last year. The Bar has shown it will stop at nothing to protect its power, prestige and money.

Fortunately, the conservative libertarian litigator Clint Bolick, co-founder of the Institute for Justice and until recently, head of the Goldwater Institute’s legal wing, was just appointed to the Arizona Supreme Court, which oversees the Bar. Between this important legislation and Bolick’s efforts on the inside, reform is finally coming and should pick up steam in other states next.  

POLL: The Republican Nominee for AZ01

The Economics and Politics of Solar Net Metering

It’s been some time since I’ve written on the topic of solar energy and the utility industry. This area has always interested me given my background in nuclear power, energy services and Arizona politics. In recent years, my curiosity with the off-grid lifestyle and homesteading has also fueled that interest.

Originally, I wrote from the perspective that the big utility monopolies were taking advantage of ratepayers by pushing for changes in net metering that would result in hurting the rooftop solar industry. It was the classic David vs Goliath narrative.

That was incorrect.

What further economic and policy research revealed was that the solar industry was actually being heavily subsidized by ratepayers via cost shifting from solar customers to non-solar customers. In other words, the full and long-term cost of energy was being redistributed from the solar haves to the solar have-nots.

Rooftop solar is still fairly expensive to the average consumer. It can cost tens of thousands of dollars in up front cost to purchase a full system for your home. Cost is one of the main reasons why the vast majority of consumers opt for a lease arrangement

Rooftop solar companies and policy makers figured out early on that they needed to create an incentive for consumers to move toward expensive solar. Thus, net metering was established.

You’ve probably heard about selling your solar energy back to the grid or spinning your meter backwards. This is an arrangement in which a customer who is generating electricity from their solar panels is sending any excess electricity back to the grid for distribution to other energy users. This practice reduces the energy cost to the solar customer by creating a credit. Utility companies have been crediting consumers at a retail rate rather than a wholesale rate. That retail rate is above the true market value of electricity and is actually a cost to utility companies which have to operate and maintain the grid. Those costs are ultimately shifted over to non-solar users who pick up the tab for not having solar.

Here’s a video put out by a electric cooperative that helps explains the cost shifting.

As you can guess, this was driven by policy makers who wanted to create an incentive for consumers to transition to cleaner solar energy generation and away from a dependency of fossil fuels – a laudable goal.

But there’s also a political motive in driving consumers to solar. As part of the leasing arrangement, some rooftop solar companies sell the excess energy back to the utility companies at the higher retail rate and pocket the difference above the wholesale rate and why shouldn’t they?

The rooftop solar industry found a way to “rent seek” and use public policy to protect the practice – even at a cost to the broader energy market

This reminds me of another moment in Arizona history when the Arizona legislature passed a law creating a tax credit for those who purchased or converted their vehicles to run on alternative fuels. Almost overnight, an industry of alt-fuel conversion companies sprung up in Arizona. Thousands sought conversions and these companies benefited from the special law. What was supposed to cost Arizona taxpayers $10 Millions ended up costing $200 Million. It was a major public policy failure that demonstrated the law of unintended consequences at the cost of Arizona taxpayers.

Here in Arizona over the last two years, the rooftop solar industry and utility companies have been engaged in a heated battle over the economics of solar energy and net metering policy. Ultimately, the Arizona Corporation Commission decides on any changes to policy which may include an adjustment in the rate that ratepayers sell back their solar electricity to the grid.

Rooftop solar companies like SolarCity have insisted that any reduction in the net metering rate will take the incentive away from consumers to go solar therefore hurting the Arizona rooftop solar industry. APS argues that non-solar ratepayers are paying the cost to maintain the entire grid while solar-users are being subsidized.

Corporation Commissioners have tried to broker a compromise with industry leaders. Meantime, the politics of this battle continue to play out as challenger candidates threaten to replace current commissioners and special interest groups promise to engage in the 2016 election.

The problem with net metering may all be resolved by this summer as other proposals emerge. One indication of a solution may be seen over the next few weeks as one smaller Arizona utility offers an alternative to how it bills residential ratepayers. That alternative is called “demand charges” and I’ll explain in a later post how it provides a workaround to the problem of net metering.