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Meet Jonah Goldberg at the Goldwater Institute!

May 25, 2012 By Leave a Comment

Jonah GoldbergThe Goldwater Institute invites you to a book-signing with National Review Online founding editor and best-selling author Jonah Goldberg.

The greatest trick liberals ever pulled was convincing themselves that they’re not ideological. Today, “objective” journalists, academics and “moderate” politicians peddle some of the most radical arguments by hiding them in homespun aphorisms. Bestselling conservative author Jonah Goldberg exposes the truth behind many such clichés in his latest book, The Tyranny of Clichés: How Liberals Cheat in the War of Ideas.

Jonah Goldberg’s first book, Liberal Fascism, was a number one New York Times bestseller. A visiting fellow at the American Enterprise Institute, he is the founding editor of National Review Online. He is also a Los Angeles Times columnist, a Fox News contributor, and a member of the board of contributors at USA Today.

The Goldwater Institute is pleased to host Jonah Goldberg for the only Arizona stop on his book tour. Please join us!

Thursday, June 21
5:30-7:00 p.m.
Goldwater Institute
500 East Coronado Road, Phoenix, Arizona
(One block north of McDowell Road, west of 7th Street)

SIGN UP HERE

Filed Under: Uncategorized

Insurance Companies and Bureaucrats, Obamacare’s Big Winners

May 24, 2012 By 1 Comment

By Diane Cohen

When the topic is protecting liberty and the headline reads, “Even in Illinois but not in Arizona,” we’re in trouble. Indeed, while even the Democrat-controlled legislature in President Obama’s adopted home state of Illinois said no to establishing an insurance exchange to facilitate the federal health care law, Arizona is moving full steam ahead with its exchange and is using more than $30 million in federal tax dollars to do so.

While exchange supporters euphemistically refer to exchanges as “marketplaces,” exchanges are in fact government-sanctioned, invitation-only clubs where only government-approved insurance companies can sell government-approved insurance. No wonder big insurance companies are lobbying so hard for an Arizona exchange and want them to stand even if the President’s health care law is struck down by the Supreme Court in June – they want to make sure they get an invitation to the party so that they can monopolize the market now and forever. Bloomberg News reported just last week that insurance companies stand to gain billions in revenue over the next seven years from the President’s health care law.

While exchanges will benefit the big insurance companies and bureaucrats who will get jobs, the Arizona taxpayers will be stuck paying the bill. At a Senate hearing last November, Arizona’s exchange director, who previously worked for the very insurance lobby that advocated for the passage of the President’s health care law, said he could not answer the question of how much the exchange will costs taxpayers until it was up and running. We do know the Massachusetts exchange costs taxpayers in that state $60 million a year.

Last fall, the Goldwater Institute sent a public records request to the Governor’s office to find out how much the state is spending on the exchange, including specific requests for the payroll records of all state employees who have worked on the exchange since its inception in March 2010. The response was a mere 33 pages of undated, redacted records, most of which are indecipherable. What little is visible indicates that in addition to paying salaries of some unknown amount, tax dollars are paying for exchange employees’ food, lodging and travel. This non-response appears to be a violation of Arizona public records law and we hope the Governor’s office will soon make a full and transparent disclosure of these records.

States are not required to establish exchanges and Arizona should say no. Instead, it is entrenching the federal health care law, along with a new government bureaucracy and the special interests that go along with it.

Diane Cohen is a senior attorney with the Goldwater Institute.

Learn More:

Goldwater Institute: States Must Protect the Health Care Freedom of their Citizens by Saying No to Federal Health Care Insurance Exchanges

Arizona Governor’s Office: Payroll Records (PDF)

Bloomberg: Insurers face $1 Trillion in Revenue at Stake in Health Law

Filed Under: Arizona Politics, Health Care, State Budget, State Government, States Rights

Tombstone Ain’t Dead Yet

May 23, 2012 By 1 Comment

By Nick Dranias

Last week, the U.S. Forest Service got the drop on Tombstone when the City’s request for an emergency injunction was denied by Senior Judge Frank Zapata of the United States District Court. But Tombstone’s legal posse has a more than a few rounds left in the chamber.

The Goldwater Institute has already appealed the decision as a violation of the Tenth Amendment and, on May 21st, we filed an emergency motion for an injunction with the Ninth Circuit Court of Appeals on behalf of the City of Tombstone. The motion urges the Court to allow Tombstone to repair its Huachuca Mountain water system because the loss of water to the City is especially dangerous now that wildfire season has arrived. It is entirely possible that the motion will be granted in just a few days. But even if it is denied, the City won’t be firing blanks just yet. The next move is an emergency request before Justice Anthony Kennedy, who “rides” the Ninth Circuit.

Meanwhile the cavalry is on the horizon. County and rancher organizations from around the Western States are gearing up to file “Friend of the Court” briefs in support of Tombstone’s appeal. And three days after the denial of Tombstone’s request for emergency relief from Judge Zapata, U.S. Representative Jeff Flake introduced a bill entitled the “Emergency Water Supply Restoration Act.” The bill would allow state and local governments to freely and fully restore water supplies in Wilderness Areas without interference from federal agencies during a declared State of Emergency. No doubt the bill will catch the U.S. Forest Service’s attention.

Congressman Flake’s bill may have an uphill battle in the Senate, but combined with the cutting edge legal theories being used by the Goldwater Institute’s posse of public interest attorneys, no one should count out the “Town Too Tough to Die.”

Nick Dranias is the Director of Policy Development and Constitutional Government for the Goldwater Institute.

Learn more:

Goldwater Institute: Emergency Motion Pending Appeal (PDF)

Goldwater Institute: Tombstone v. United States

U.S. Congress: Emergency Water Supply Restoration Act (PDF)

Filed Under: Constitutional Law, Environment, Federal Government, Property Rights, States Rights

The Supreme Court Could End Goverment-Sponsored Cartels

May 9, 2012 By Leave a Comment

By Clint Bolick

Among the New Deal relics that persist today are federal dairy laws that restrict competition over milk prices. The Hettinga family, which owns two Arizona dairies, managed to lower prices through an exemption in the law, which ultimately led to the repeal of the exemption, and forced the Hettingas into the government-created dairy cartel.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit, applying long-standing precedent, unanimously upheld the law. But Judge Janice Brown, who previously penned passionate pro-freedom opinions as a justice of the California Supreme Court, wrote a concurring opinion joined by Judge David Sentelle condemning the state of economic liberty jurisprudence.

The law, Judge Brown wrote, illustrates the “gap between the rhetoric of free markets and the reality of ubiquitous regulation.” The “ugly truth” is that “America’s cowboy capitalism was long ago disarmed by a democratic process increasingly dominated by powerful groups with economic interests antithetical to competitors and consumers.” The courts, Brown lamented, “have been negotiating the terms of the surrender since the 1930s,” removing “any check on the group interests that all too often control the democratic process.”

She’s right: if the courts fail to protect freedom of enterprise, then constitutional protections are not worth the paper on which they’re written. And by applying the so-called “rational basis” test—which requires neither a basis nor one that is rational—federal courts have upheld all manner of economic regulations. Bravo, Judge Janice Brown.

Here’s hoping the U.S. Supreme Court will hear the case and heed her wisdom.

Clint Bolick is Vice President of Litigation at the Goldwater Institute.

Learn more:

U. S. District Court: Hettinga v. United States (PDF)

Wikipedia: Janice Brown

Amazon.com: Death Grip

Filed Under: Constitutional Law, Economic Development

Arizona’s Secret Growth Industry

May 8, 2012 By Leave a Comment

By Stephen Slivinski

Last week, the U.S. Department of Labor released employment data for all 50 states. Arizona has done reasonably well since March 2011, adding 47,000 non-farm jobs. That’s a growth rate of around 2 percent and puts Arizona among the top 10 states.

The Arizona Republic mentioned these numbers in their annual employment survey of the largest companies in the state and concluded that large employers were helping lead the state into a recovery. The Arizona Department of Administration reported that the biggest absolute job gain was in the leisure and hospitality industry (10,700 new jobs).

But digging deeper into the employment data reveals that Wal-Mart and tourism aren’t the state’s real growth industries.

In percentage terms, the fastest-growing industry was specialty contractors. Tied for second place were the securities and commodities industry and the state public education system, which includes the state universities.

Top Five Industries by Employment Growth

Specialty Trade Contractors 10.5%
Securities and Commodities 6.3%
State Government Educational Services 6.3%
Building Services 5.7%
Arts, Entertainment, and Recreation 5.7%

Source: Author’s calculations based on data from U.S. Department of Labor

It’s worth noting that the biggest employer in the state is not Wal-Mart, as the Arizona Republic concludes. The biggest employer in Arizona is the government.

State government as a whole has more than twice as many employees as Wal-Mart in Arizona, and total state and local public education employees outnumber Wal-Mart employees by more than 6 to 1.

The growth in the ranks of public education employees means more resources go to government. Unfortunately, there has been little in the way of an honest appraisal of whether those additional resources will add more value for taxpayers or students. In the meantime, policymakers should recognize that until we have real limits on the growth of government, government will continue to compete with private industries for the title of “top growth industry.”

Stephen Slivinski is an economist with the Goldwater Institute.

Learn more:

Arizona Department of Administration: Job Gains Across All Sectors (PDF)

Arizona Republic: Arizona’s Big Companies Boost Jobs Recovery

Goldwater Institute: Put Arizona on a Real Budget

Filed Under: Arizona Politics, Economic Development, Economics, Jobs/Labor

The Feds Are Coming for Our Water

May 3, 2012 By 2 Comments

By Nick Dranias

The City of Tombstone, Arizona is no longer the only one fighting the federal government for water rights. The latest move by the Federal Bureau of Land Management appears to herald a bigger and much more comprehensive effort to seize water and access rights on federal lands throughout the western states.

Just last week, the Bureau of Land Management declared to the Arizona Department of Water Resources that the federal government holds senior water rights across much of Arizona’s San Pedro River riparian watershed. The BLM’s objection to the “Designation of Adequate Water Supply” issued by ADWR to Sierra Vista’s Pueblo del Sol Water Company stakes the claim that water sources in the area cannot be used without the federal government’s permission. This new federal policy not only defies decades of deference to and accommodation of state sovereignty over water law, but it throws a noose around Arizona’s neck, for which water is life.

The growing federal stranglehold over water rights in Arizona is a direct assault on state autonomy. There is perhaps no better way for the federal government to quell restive western states, like Arizona, that dare to resist federal immigration, healthcare, and unionization policies.

More than ever before, the BLM’s actions show that it is essential for the Goldwater Institute to prevail in our efforts to vindicate Tombstone, Arizona’s 130-year-old water rights, which the federal government is challenging. If Tombstone fails in its effort to preserve its municipal water supply, which is essential to its existence, the floodgates of federal overreach will wash away what little sovereignty the western states still enjoy.

Nick Dranias holds the Clarence J. and Katherine P. Duncan Chair for Constitutional Government and is director of the Joseph and Dorothy Donnelly Moller Center for Constitutional Government at the Goldwater Institute.

Learn more:

Sierra Vista Herald: Warning on water issued by Babbitt in ’94

Arizona Department of Water Resources: Bureau of Land Management letter (PDF)

Goldwater Institute: Tombstone v. United States

Filed Under: Arizona Politics, Constitutional Law, Environment, Federal Government, States Rights

Why I’m Not Buying a House in Glendale, Ariz.

May 2, 2012 By 13 Comments

By Byron Schlomach, Ph.D.

After well over four years in Arizona, my wife and I have finally sold our property in Texas and we’re ready to buy a house here. I work near downtown Phoenix, but we’d like a little room and we’re not flush with cash, so I’m willing to drive. That means we could choose to live in most communities in the Valley, as long as they’re within about 20 miles of downtown Phoenix. One city in particular, though, is scratched off the list: Glendale.

I personally consider some parts of Glendale to have a lot of potential. There are some nice neighborhoods, some good schools, and drive times would be tolerable. The idea of moving to Glendale, however, looks too much like a crapshoot. If I wanted to gamble, I could go to a casino. But I don’t want to gamble with an asset as big and as important as a house.

The risk comes from the fast-and-loose way Glendale’s leadership has played with taxpayers’ money. The city has used sales tax proceeds to guarantee bonds for sports venues I personally would never use. It is also paying the National Hockey League to keep the Coyotes at Jobing.com Arena. Meanwhile, parks and a library annex, things I might use, will not be funded at levels once expected. Facing a $35 million budget deficit this year alone, the city is literally teetering on the edge of bankruptcy.

Top this off with a sales tax increase that will make Glendale’s the highest sales tax rate in the nation among major cities, and an expected property tax increase, and I cannot predict what my cost of living in Glendale is likely to be. At this rate, the value of any house I buy could be hurt just by being located in Glendale.

I love my family. I’m not taking the chance. I’m not buying a house in Glendale.

Dr. Byron Schlomach is the director of the Goldwater Institute’s Center for Economic Prosperity.

Learn more:

Arizona Republic: Glendale Leaders Mull Proposed Hike in Property Taxes, Layoffs

Tax Foundation: Glendale Considers Sales Tax Hike to Highest in Nation, Property Tax Hike

Filed Under: City Government, Economic Development, Economics, Spending

May 4 is Education Savings Account Application Deadline

May 1, 2012 By Leave a Comment

By Jonathan Butcher

Friday, May 4th is the deadline for parents of students with special needs to apply for an education savings account for next school year.

These accounts give parents their children’s share of school funds to use on textbooks, virtual school classes, private school tuition, or even college savings plans. Approximately 150 families participated this year.

The only program of its kind in the U.S., education savings accounts allow parents to customize their child’s education. Parents can select a variety of educational services for their child in order to create a specialized learning experience that will challenge their child and prepare them for life in the real world.

Here are a few commonly asked questions and answers about education savings accounts.

  • What is an education savings account (or “Empowerment Scholarship Account”)? Education savings accounts are private accounts under parents’ control. Parents of students with special needs complete an application with the Arizona Department of Education and receive their share of school funds. Families can use the funds for many educational expenses, including online courses, textbooks, and private school tuition. A complete list of approved expenses is available here.
  • Who is eligible? All students with an IEP or 504 plan who attended a public school for the first 100 days of this school year are eligible to apply. Students who received a scholarship from a school tuition organization (STO) under “Lexie’s Law” are also eligible. Families that used a savings account this school year will receive a renewal contract from the Arizona Department of Education (more information for participating families is available from the Department of Education here).
  • How do you apply? Applications are available on the Arizona Department of Education’s Web site. Friday, May 4 is the deadline for next school year.
  • Where can I learn more? To learn more, visit the Goldwater Institute’s “Education Savings Accounts: Questions and Answers” or the Arizona Department of Education’s information page.

These savings accounts are changing the lives of children with special needs. If you know a family who would qualify for an account, I hope you’ll share this information and encourage them to apply today.

Jonathan Butcher is education director for the Goldwater Institute.

Learn more:

Arizona Department of Education: Empowerment Scholarship Accounts 

Arizona Department of Education: ESA Application Guidelines

Goldwater Institute: Education Savings Accounts: Questions and Answers

Goldwater Institute: Education Savings Accounts Extend Hope, Opportunities

Filed Under: Education

How to Make the Sun Shine on Solar Energy

April 25, 2012 By 1 Comment

By Stephen Slivinski

Recent news from the solar industry includes headlines about Germany cutting solar subsidies and Arizona-based First Solar laying off 30 percent of its employees.

First Solar’s move comes despite a grant of $16.3 million from the federal government’s Export-Import Bank in 2010 to expand one of its factories in Ohio. To sweeten the pot for First Solar, the Ex-Im Bank guaranteed more than $400 million in loans to St. Clair Solar in Canada to buy solar panels from First Solar. It turns out that the Canadian company was a wholly-owned subsidiary of First Solar, so the U.S. government was subsidizing the company to manufacture and then purchase its own product from itself. Even with those heavy subsidies, First Solar is still dimming.

Like the U.S., Germany has offered generous solar subsidies in the past. But now with substantial solar-energy capacity – perhaps too much to persist without subsidies – and serious economic trouble, Germany is cutting its solar subsidy programs.

Solar companies and governments seem to be learning a basic economic lesson. Duke economist Michael Munger explains, “if an activity is profitable, it produces more in value than it uses up in costs. If an activity is not profitable, it uses up more in resources than it produces in value.” If subsidies bolster a company’s bottom line, then the market signal of a company’s profitability is “fake, and the activity still uses up more resources than it produces in value.”

In the end, doing away with subsidies may lead to a brighter future for solar energy. Subsidies have shielded solar companies from competition and sometimes protected flawed business models. It’s too soon to tell whether the solar industry can be a viable long-term energy producer in a cost-effective and economically efficient way. But we may never know if we continue to protect it – and other energy sources – from competition.

Stephen Slivinski is senior economist for the Goldwater Institute.

Learn more:

Washington Examiner: Firm sells solar panels – to itself, taxpayers pay

Washington Post: Solar industry faces subsidy cuts in Europe

Prof. Michael Munger: Truly massive solar fail

Goldwater Institute: Government subsidized energy is just the same old song

Filed Under: Economic Development, Economics, Energy

If 2011 Was the ‘Year Of School Choice,’ What Does That Make 2012?

April 24, 2012 By Leave a Comment

By Jonathan Butcher

The Wall Street Journal called 2011 the “Year of School Choice,” and with good reason. Thirteen states, including Arizona, passed or expanded choice-based reforms. Some two dozen other states considered similar legislation.

There is still time for Arizona lawmakers to make 2012 an encore performance.

What is most striking about the 2011 reforms enacted around the country is the programs’ inclusive designs. That is, for the past 20 years, programs that allow students to choose a public or private school of choice have been small in scope. When school voucher programs became law, often student eligibility would be limited to children with special needs (such as Florida’s McKay Scholarships) or low-income students in individual cities or districts (like Milwaukee, Wisconsin).

Private school-choice reforms were seen as policy solutions for specific student groups, not a way to change how all students access education.

Yet in 2011, lawmakers in several states (including Indiana and Wisconsin) passed new reforms or expanded existing programs with broad eligibility provisions.

In 2012, there have not been as many bills signed into law (yet), but in Louisiana, Gov. Bobby Jindal just signed a reform package that is designed to reach more than just isolated student groups. Lawmakers in the Bayou passed a set of bills that allow parents of students in failing schools to petition to close their school or convert it to a charter (a similar bill passed the Arizona Senate this year) and allow low and middle-income students in schools rated “C” or below access to school vouchers.

Arizona lawmakers still have time to follow suit and expand the state’s unique education savings account program to students in the state’s lowest-performing schools and military families. Offering parents and students choices of education services is no longer a reform for a minority of students.

Around the country, education reform is finally moving from “choices for some” to “choices for all.”

Jonathan Butcher is education director for the Goldwater Institute.

Learn more:

Wall Street Journal: School Vouchers Gain Ground

Wall Street Journal: The Year of School Choice

PR Newswire: Louisiana Governor’s School Voucher Plan Clears Legislature

Filed Under: Education

Glendale Busts Its Budget and Plans to Raise Taxes

April 23, 2012 By 5 Comments

By Carrie Ann Sitren

How do you close a $35 million budget gap? Perhaps the better question is why that hole was dug in the first place. One answer for the City of Glendale is hockey. In fiscal year 2012, the city added $20 million (up from only $1.2 million the year before) to its operating budget for the Jobing.com Arena, where the Phoenix Coyotes hockey team plays. The NHL has been demanding financial support from the city since 2009, when the team filed for bankruptcy.

Instead of looking for ways to cut arena operating costs, city officials are considering a 0.8% increase in the sales tax. This would make Glendale the city with the highest sales tax rate in the nation. It would also be enough to cover the $20 million city payment for Coyotes hockey next year.

In other cities, like Oakland, taxpayers don’t pay high dollars for someone else to manage their arena. Instead, professional management groups compete for that right. Arena management can be a profitable business, with groups maximizing concert and other entertainment events and keeping the revenues from concessions and ticket sales. Meanwhile, cities benefit because they don’t have to pay the operating costs. In some arena contracts, like the Sprint Center in Kansas City, the city also gets a cut of the profits. Last year, arena management added $1.8 million to Kansas City’s budget.

A few million dollars in the door would be a well-needed substitute for $20 million going out of Glendale for its arena. We have yet to see city officials open bidding for management. Given the heavy competition for it in other cities, Glendale should consider that option before asking taxpayers to cough up more sales taxes and for another year of hockey.

Carrie Ann Sitren is an attorney with the Goldwater Institute.

Learn more:

Goldwater Institute: Goldwater Institute v. City of Glendale

Arizona Republic: Glendale Budget Looking Bleak

Associated Press: No Team, No Problem for Kansas City’s Sprint Center

Filed Under: Arizona Politics, City Government, Debt, Spending

Arizona’s State and Local Governments: Weighing Us Down

April 19, 2012 By 2 Comments

By Byron Schlomach

Amid calls for increased state spending and fears of 2014 program cuts, some are calling for extending 2010’s sales tax increase indefinitely. However, Arizonans should understand how much their state and local governments cost before we let them charge us even more.

The graph below shows state and local governments’ direct expenditures as a percentage of private GDP for four states and the 50-state U.S. average from 1985 through 2009. This cost-of-government measure reflects government’s affordability to taxpayers.

Some states with high incomes and GDPs can conceivably “afford” more government. One of the most affordable state and local governments in the country in 2009 was Connecticut’s, partly because incomes (and GDP) in Connecticut is high. Currently, as can be seen in the graph, liberal New Jersey’s governments were more affordable than ours.

The percentage can go up because government spending rises or because GDP has fallen. GDP in Arizona has fallen lately (as it has in virtually every state) and this graph demonstrates that Arizona’s state and local governments have failed, worse than most, to shrink with Arizonans’ ability to afford them. Even before the recession, though, since 1999 the general trend has been less affordable government in Arizona.

In 1990, Arizona’s government burden as a percentage of private state GDP was the highest of all 50 states. The following decade saw tax cuts that shrank Arizona’s government burden until we were below the U.S. average. As a result, our economy boomed.

Now Arizona’s state and local governments are again above average in cost. Our government burden is closer to that of California than Texas, and the difference between the two states is striking. California’s unemployment rate is nearly 11 percent; Texas’ is above 7 percent, but only because so many people are moving there.

The numbers show that Arizona has failed to keep government small and economic growth high. We seem more focused on being a tired, flaccid has-been like California instead of an energetic economic leader like Texas.

Our state legislative leadership has it right: Resist increasing spending. Reduce the risk of raising taxes later. And lower the burden of government.

Dr. Byron Schlomach is the director of the Goldwater Institute’s Center for Economic Prosperity.

Learn more:

American Legislative Exchange Council: Rich States Poor States (PDF)

Joint Legislative Budget Board: (Legislative) Budget as Introduced (PDF)

Office of Strategic Planning and Budgeting: The Executive Budget Recommendation (PDF)

Filed Under: Arizona Politics, Economic Development, Economics, Spending, State Budget, State Economy, Taxation

Government Workers Deserve Paycheck Protection

April 18, 2012 By 1 Comment

By Darcy Olsen

If you’ve ever signed up for a magazine subscription, bought cable TV, or purchased something from an infomercial, you’ve probably encountered the automatic renewal process. After the initial subscription period ends, some companies continue charging you until you jump through myriad time-consuming hoops. And you may never get your money back.

This happens perpetually to Arizona workers, but the consequences are far greater. Year after year, unions take dues from the paychecks of government workers without asking them for permission. The unions then spend the millions of dollars raked in from automatic renewals to fund political warfare their own members oppose.

The Arizona Legislature is considering HB 2103, a bill that would require unions to get members’ permission every year before taking dues from their paychecks.

Under Arizona law, once you’ve joined a government-employee union, you’re never asked if you’d like to continue authorizing paycheck deductions. Big Labor diverts some of those deductions to political activism, which may directly conflict with your political beliefs and have little to do with your job.

For instance, the Service Employees International Union, which represents more than 1 million local and state government workers, public-school employees, and bus drivers nationally, spent much of 2010 organizing boycotts of Arizona in the wake of SB 1070, the immigration legislation overwhelmingly supported by Arizonans.

A half-dozen states have already passed similar paycheck-protection measures, including union strongholds Michigan and Ohio.

Within five years of the passage of Washington’s paycheck-protection law, voluntary paycheck deductions to the state’s teachers-union PAC had shrunk by 75 percent. Paycheck-protection legislation in Idaho and Utah yielded comparable results.

Paycheck-protection laws give government workers a greater voice and force unions to justify to their members why they should continue to subsidize union bosses’ political activism.

HB 2103 will restore the balance of power to working Arizonans – public employees and taxpayers alike.

Darcy Olsen is president and CEO of the Goldwater Institute.

Learn more:

Arizona State Legislature: HB 2103

Arizona Republic: Bill Would Stop Unions from Raiding Paychecks

Filed Under: Arizona Politics, Government Reform, Jobs/Labor, Legislation, State Budget, State Economy, State Government

Tax Day Blues Should Lead to Thoughts of Reform

April 17, 2012 By 2 Comments

By Stephen Slivinski

It’s federal tax day, and many wonder why they owe the government so much money. And those who receive refunds might wonder why the federal government kept so much in the first place.

Yet the shared experience of filling out tax forms – or paying someone to do it for us – should also have us wondering if there’s a better way.

Although a big part of the tax bite stems from functions government has taken on that could easily be handled by the private sector, the costs of complying with the federal tax code are nothing to sneeze at either. According to the Internal Revenue Service’s own calculations, U.S. taxpayers and businesses spend 6.1 billion hours a year complying with federal tax statutes. Translate that time into hours worked instead, and it amounts to more than three million full-time workers, or about 2 percent of current U.S. employment. By comparison, the number of employed Americans between 2008 and today has dropped by about 4 million.

All of this at a cost of $163 billion – money that could have been spent starting businesses, putting more money into savings, or paying household bills.

And these estimates don’t include state-level tax compliance. Although filling out federal tax forms is something every taxpayer in each state has to do, the residents of nine states don’t have to file out a state income tax form. That’s because those states don’t have an income tax.

Those states benefit in more ways than just the cost of time and money spent on filling out tax forms and engaging in tax planning. For instance, those states tend to have higher net job creation rates – about 10 percent higher than those with an income tax between 2000 and 2007.

Why? Because income tax systems penalize work and investment. On the other hand, consumption taxes – like sales taxes – encourage wealth creation.

Arizona policymakers should head toward a broad-based consumption tax that could eliminate some of the current system’s complexity and unlock economic growth.

It’s certainly something that must have crossed the minds of beleaguered taxpayers this week.

Stephen Slivinski is senior economist for the Goldwater Institute.

Learn more:

Internal Revenue Service: National Taxpayer Advocate 2010 Annual Report to Congress (PDF)

Goldwater Institute: Investing in Arizona

Filed Under: Economic Development, Economics, State Budget, State Economy, State Government, Taxation

URGENT: CALL SPEAKER TOBIN AND TELL HIM TO BRING HB 2103 TO THE FLOOR!

April 12, 2012 By 3 Comments

By Starlee Rhoades

It’s no secret that government unions need reform. Government workers earn nearly twice as much as their private sector counterparts, and taxpayers are paying for it. These inflated salaries and benefits are threatening to bankrupt Arizona cities. On top of that, unions spend millions to influence the outcome of elections, estimated to be $400 million this year alone, and support issues that are at odds with the limited government policies you and I support.

The vast majority of that money comes from dues that are automatically deducted from workers’ paychecks. Right now when a government employee joins a union, a portion of his paycheck is redirected to the union to pay dues. The problem is that workers are never asked again if they want to keep paying those dues. The money is deducted automatically, forever.

We want unions to ask permission once each year to keep collecting dues from government employee paychecks. Those who want to keep paying may do so, and those who don’t will be able to stop. It will be up to the worker how they pay their dues, not their union boss.

We need your help. Will you make one phone call today to help pass a bill that would give government workers “paycheck protection?”

Six other states have passed this reform and we know what happens: union spending on political activity plummets.

If we could pass this measure in Arizona there would be fewer union-funded lawsuits against limited government reforms passed by the Legislature and voters. It would also help Arizona get government worker pensions and benefits in-line with the private sector. With less money at their disposal to oust courageous elected officials who vote for pension and benefit changes, we could make real progress in getting Arizona cities and towns back on sound financial footing.

Here’s how you can help:

  1. Please call the Speaker of the House, Andy Tobin from Prescott, and ask him to let the “paycheck protection” bill come up for a vote. You can reach Speaker Tobin at (602) 926-5172.
  2. Once you’ve called the Speaker, please call the state representatives who represent you and tell them you support paycheck protection, House Bill 2103, and ask them to vote yes. There is no need to call your state senator—they have already passed the bill. You can find out who your state representatives are by clicking here.

The unions are fighting this reform tooth and nail, and we know legislators need to hear from regular taxpayers. I hope you will please take just one minute today to make your voice heard.

Starlee Rhoades is Executive Vice President of the Goldwater Institute.

Learn More:

Goldwater Institute: Protecting Workers’ Paychecks from Union Raids

Goldwater Institute: Reforming Arizona

Filed Under: Arizona Politics, Government Reform, Jobs/Labor, State Budget, State Government

Tombstone, Arizona is Ground Zero for State Sovereignty

April 11, 2012 By 1 Comment

By Nick Dranias

In a showdown between the Obama Administration and the “Town Too Tough to Die,” the U.S. Forest Service is refusing to allow the City of Tombstone to repair its mountain spring water infrastructure after the 2011 Monument Fire destroyed pipelines and catchments.

Despite Gov. Jan Brewer’s declared state of emergency to empower Tombstone to restore its municipal water supply, the feds continue to block Tombstone, citing the Wilderness Act, which was passed decades after Tombstone secured the water rights. The Forest Service’s decision risks the lives and properties of Tombstone residents and tourists due to the loss of adequate fire suppression capabilities and safe drinking water.

This is a case of egregious federal overreach. If the Forest Service can effectively seize Tombstone’s 130-year-old water rights during a state of emergency — rights that the Service recognized as valid in 1916 — no state or local government will be safe from the feds. That’s why the Goldwater Institute recently filed for a preliminary injunction to restore Tombstone’s sovereign power to restore its municipal water supply.

There is plenty of reason to believe that Tombstone will ultimately prevail. The Supreme Court is already familiar with federal overreach in Graham County, Arizona. In Printz v. United States, the Court rejected efforts by the federal government to commandeer the Graham County Sheriff into implementing a federal gun control law, writing, “the Framers explicitly chose a Constitution that confers upon Congress the power to regulate individuals, not States.” The Forest Service is openly flouting this principle of law.

By denying Tombstone access to its water, the Forest Service is threatening to directly regulate Tombstone to death. Printz makes it clear that the Forest Service has no such constitutional power — not if the guarantee of state sovereignty means anything under the Tenth Amendment.

Nick Dranias holds the Clarence J. and Katherine P. Duncan Chair for Constitutional Government and is director of the Joseph and Dorothy Donnelly Moller Center for Constitutional Government at the Goldwater Institute.

Learn more:

Goldwater Institute: Tombstone v. United States

Justia.com: Printz v. United States

Filed Under: Arizona Politics, Constitutional Law, Environment, Federal Government, Judicial, Property Rights, Public Safety, States Rights

When Debt Is Not Debt and a Government Isn’t a Government

April 5, 2012 By 3 Comments

By Mark Flatten

Click image to enlarge
Unpaid Balances

Open your wallets even wider, Arizona taxpayers.

You may already know that every American is on the hook for just under $50,000, each person’s piece of the $15.6 trillion in debt run up by the federal government.

But what you may not know is that so much more is owed in your name; about $10,258 for every Arizonan’s share of the $66.5 billion in debt and unfunded obligations borrowed by state and local governments.

In a new report, Debt and Taxes, the Goldwater Institute breaks down that debt. It also enters the strange world of public finance where debt is not debt, governments are not governments and billions of dollars in obligations are supposedly traded without risk.

Most of the debt racked up by state and local governments – about $44 billion – is in bonds issued by the state, counties, cities, school districts and hundreds of other taxing authorities created as stand-alone governments under Arizona law. Billions more comes from shortfalls in pension plans for government workers. There is even $1.3 billion in payments the Legislature simply chose not to make to balance the state’s budget that is just floating around on the books.

The Arizona Constitution is supposed to limit the state’s total debt to $350,000. The tabs that can be run up by local governments have their own caps as well. But the courts have determined those limits only apply to certain types of debt. So governments in Arizona rely far more heavily on borrowing that is not confined by constitutional restrictions or requirements for voter approval.

The Goldwater Institute has developed a series of policy recommendations to curb the ability of state and local governments to bypass voters and avoid constitutional restrictions on issuing debt.

Why should you care? State Treasurer Doug Ducey said it best:

“Taxpayers should care about it because it’s an obligation that they or their children are going to have,” Ducey said. “People should be concerned about the amount of debt, the type of debt, and the fact that there is no overall plan to pay down the state debt.”

Mark Flatten is an investigative reporter with the Goldwater Institute.

Learn more:

Goldwater Institute: Debt and Taxes: Arizona Taxpayers on Hook for $66 Billion Tab Run Up by State, Local Governments

Goldwater Institute: Recommendations for Reform

Filed Under: Arizona Politics, City Government, Debt, Economic Development, Economics, State Budget, State Economy, State Government
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