Dear Phoenix Taxpayer:

By Tuesday, August 30, Phoenix voters will decide the fate of Proposition 1, the so-called “Home Rule” budget measure. Posted on the AFP-Arizona website (www.aztaxpayers.org, scroll down on the left side) is information about Proposition 1:

http://www.americansforprosperity.org/files/2011phxprop1info.pdf 

Here is the short story…

Deceptive Marketing

Contrary to the Yes-on-Prop-1 propaganda, “home rule” is not any kind of spending limit: it is a budgetary regime in which the Mayor and City Council can spend as much money as they can raise in taxes. Under “home rule,” the sky is the limit.

What’s at Stake

If the majority of voters votes Yes—in favor of Prop 1—things will continue as normal. In other words, the Mayor and City Council will be free to increase city budgets (and spend our taxpayer money) at irresponsible rates for the next four years.

However, if the majority votes No—against Prop 1—Phoenix will have to reduce its spending to the baseline established by increases in population and inflation since 1980. This chart shows the alternatives:

http://static.taxcutsforall.com//files/phoenixbudget1981-2015.pdf 

According to city spokespersons, the failure of Prop 1 would make Phoenix reduce its current budget by roughly $870 million, beginning in Fiscal Year 2012-2013 (the fiscal year beginning July, 1 2012). That would be a reduction of approximately 25 percent of the city’s projected budget. AFP-Arizona believes that the city’s bloated budget could sustain a 25-percent reduction, and that the reduction would force the City Council to make long-needed reforms and achieve dramatic efficiencies in city operations.

Resistance is NOT Futile

In November of 2009, voters in left-of-center Tucson narrowly rejected the Prop 400 “home rule” proposition. Given that Prop 400 failed by a few hundred votes, it is entirely possible that the home-made street signs put out by the Pima Association of Taxpayers were decisive in defeating the Tucson measure. The reason we haven’t heard much about the defeat of Prop 400 is that Tucson lost only $21 million in spending capacity out of a billion-dollar budget. Because of different fiscal circumstances prevailing in Phoenix, the consequences of defeating “home rule” in Phoenix would be much more dramatic–and as we argue below, very beneficial.

Why the Defeat of Prop 1 will be Good for Phoenix

1. Limited government is good. The arguments for limited government could (and do) fill volumes, so we cannot possibly enumerate them here. For the sake of brevity, we will emphasize the argument that government should not take tax dollars (by force) to perform functions that individuals, families, churches, and voluntary associations should perform.
2. The City of Phoenix can serve as a model for reform for the state and federal governments.
3. Phoenix can cut its budget by at least $870 million, while increasing value to users of vital city services. The Arizona chapter of Americans for Prosperity has produced a worksheet showing some of the ways Phoenix can reduce spending: http://www.americansforprosperity.org/files/phxprop1cuts.pdf
4. Phoenix needs to reduce compensation for city workers. As Phoenix City Councilman Sal DiCiccio has documented, the city awards its workers an average salary and benefit package close to $100,000 a year. That compensation level is unsustainable, and is a slap in the face to city taxpayers, who make an average salary and benefit package closer to $50,000—if they still have jobs after the worst recession since the 1930s. AFP-Arizona urges Phoenix to reduce salary and benefit packages in most departments and for most city workers by about ten percent—roughly on par with the compensation levels city workers enjoyed in 2008.
5. Budget cuts would allow Phoenix to reduce taxes dramatically. For better or for worse, the failure of Prop 1 would not mean automatic tax cuts: the city could stow the surplus revenue in a rainy day fund or use the money to pay off capital debt. But AFP-Arizona believes that some of the savings from a Prop 1 failure should be given back to city taxpayers. Budget reductions would generate General Fund savings sufficient to enact two important tax reforms:

• $127 million could be used to eliminate the city’s primary property tax
• $28 million in savings could be used to repeal the egregious Food Tax that was enacted last year by a majority on the council with a mere 24 hours’ advanced notice and that went to pay for pay hikes for city employees.

Voter Information 

There are multiple voting dates, and early ballots are already in voter mailboxes. General Phoenix election information can be found here:

http://phoenix.gov/ELECTION/voteidx.html

Activist Information:

AFP-Arizona encourages activists to make home-made street, car and yard signs, or to use soap to write slogans on their car windows. The following might be a simple but effective slogan:

August 30:
Vote NO on Phx Prop 1
Stop the Spending!
End the Food Tax!