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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

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

Sen. Don Shooter at PAChyderm Coalition Wed, Apr 18

April 11, 2012 By Leave a Comment

PAChyderm Coalition MO

Is proud to announce

 

Senator Don Shooter – LD24

For the first time in many years there may be an opportunity to restore some money to the State’s “Rainy Day” fund or provide some relief for overburdened taxpayers. As Chairman of Appropriations Committee, he will bring us an update on the state budget and negotiations with the Governor’s office.

Wednesday April 18, 2012

The Patriot Room

At Dillon’s Arrowhead

20585 N 59th Ave, Glendale

 (easy access just north of the Loop 101, east side of 59th Ave.)

 

Dinner Meeting at 6:15 pm

Dinner – your choice of order off the menu

 

Seating is limited


E-Mail Diane Douglas at azpatsfan@cox.net for your reservation or additional information.  First come, first serve.  You will not receive a reply unless the event is full.  If you have already sent an RSVP there is no need to do so again.  Thank you!

 

www.pachydermcoalition.com

Filed Under: Arizona Politics, State Budget, State Government Tagged With: , ,

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

Arizona needs to take a comprehensive look at the tax code

April 4, 2012 By 4 Comments

By Stephen Slivinski

Tax policy is often like looking at a pointillist painting – stare closely at only a section, and you don’t have a sense of the whole picture. But when you back up, the picture comes into a focus.

Governor Brewer recently signed into law HB 2123 which will help policymakers and the public stand back and take a much-needed look at all the elements of the tax code at once.

The law creates a tax reform commission for Arizona that will be required to issue a report by October. The commission will take a look at how well or poorly the current system works overall relative to desired economic outcomes and the need to fund the government.

I know what you’re thinking, “oh good; another government commission.” But, other states, such as Georgia, have convened a similar sort of commission, and in many cases, the committee hearings and the resulting reports have motivated a healthy debate about the best sort of tax system the state should have. And that’s a good thing.

Too often, tax changes are made on an ad hoc basis or by voters at the ballot box based on political whim. Additionally, tinkering in one part of the tax code – usually by making exceptions for certain types of businesses – can lead to unintended consequences and pressures to keep taxes high on other business and industries.

Fundamental tax reform necessarily starts with a broad approach. The piecemeal fashion the Legislature and voters pursue now leads to relatively high tax rates and a narrower tax base. In other words, high taxes on some, low taxes on others, and a growing constituency of beneficiaries – whether it be special interest lobbyists, tax accountants, or legislators hoping to woo a certain type of business or industry – entrenches the current tax system and might even make it worse.

The first step in reforming the tax code is to view it in its entirety. Commissions are a common way to do that and they also help policymakers and the public understand what’s broken and – perhaps most important – whether any taxes should be substantially reformed, reduced, or terminated to help create jobs and raise family incomes.

Stephen Slivinski is senior economist with the Goldwater Institute.

Learn more:

Goldwater Institute: Arizona must choose the right path on tax policy

Goldwater Institute: Unleashing Entrepreneurial Forces: States Can Spark Business Creation, Attract Venture Capital Investment, and Increase Job Growth by Eliminating Taxation of Capital Gains

Goldwater Institute: Investing in Arizona: How the Legislature Can Get Arizona’s Economy Moving Again by Reducing the Barriers to Investment and Job Creation

Filed Under: Arizona Politics, Economics, State Budget, State Economy, State Government, Taxation

Conservative Bloggers Voice Support For Marketplace Fairness Act

March 27, 2012 By 11 Comments

Conservative Bloggers Voice Support For Marketplace Fairness Act

Consensus continues to grow regarding the need for e-fairness legislation as two prominent conservative bloggers recently voiced their support for the Marketplace Fairness Act. Neil Stevens’ post over the weekend on the conservative blog RedState explains how he’s come around on the idea of e-fairness legislation.

From Neil Stevens’ post on RedState:

“Also, we’re back to discussing the Marketplace Fairness Act. As we’ve discussed before, this is a bill that would give Congressional approval to an interstate compact between the states to collect sales tax across state lines, requires member states to harmonize their tax rules to fit in with the interstate system. The bill is gaining Congressional support this time around. In theory I’m fine with this. It’s Constitutional and it’s reasonable. I disagree with Overstock.com’s complaints of complexity, because the compact imposes restrictions on the way the states can tax items, and also creates mechanisms to ease collection of the taxes.”

In yesterday’s post on Hot Air, Jazz Shaw goes even further – saying he’s no longer “on the fence” about the Marketplace Fairness Act – especially after yet another conservative voice, Maine Governor Paul LePage (R), declared his support for it.

From Jazz Shaw’s post on Hot Air:

“As I’ve stated before, I was on the fence about this one for a long time. Even leaving aside the “taxes are bad” thing, anything which could impede online commerce just strikes a sour note with many of us. I had also considered the possibility that maybe this could be worked out at the state level, but a recent attempt in Illinois to do just that produced… nothing. But after sifting through all of the pros and cons, I have to admit that it may be time to just get it over with and do this.

The reason? Like it or not, fiscal conservatives must, at a minimum, believe in a level playing field. Equality of opportunity, not results… remember? After looking over the new Ryan Plan Part 2, I’m reminded that as we tighten our belt at the federal level, more and more things will need to be pushed back down to the states. Each of them will have to manage their budgets as they see best, and for the majority of them a state sales tax is part of their revenue stream. While it may be depressing, the feds need to provide each of them a chance to compete evenly…”

It may be time to just bite the bullet and pass this legislation.”

Filed Under: Economics, Federal Government, Legislation, State Budget, State Economy, Taxation, Uncategorized

Stop ObamaCare in Arizona!

March 22, 2012 By 2 Comments

To all Arizona Taxpayers and Health Care Consumers,

As we approach the second anniversary of the Obama-Pelosi-Reid federal government takeover of health care, we must continue to fight for health care freedom.

Those of us who cannot make it to the Hands Off My Health Care Rally in Washington, DC on March 27 have a chance to tell Nancy Pelosi what we think of her health care legislation (now that we all know what’s in it!) this Saturday afternoon, March 24, when Pelosi visits Tempe.

We also have a duty to get the Arizona Legislature to STOP Gov. Jan Brewer from setting up an ObamaCare exchange here in Arizona.

Take Action to STOP ObamaCare in Arizona!

ObamaCare will make health care more expensive and less accessible, and will stifle innovation through huge new tax and regulatory burdens. And ObamaCare will ultimately put all control over health insurance and health care in the hands of Washington bureaucrats.

Unfortunately, Governor Jan Brewer is spending $30 million in federal funds (i.e., your federal tax dollars) to set up an ObamaCare health insurance exchange in Arizona. The exchange is a new bureaucracy that will soon require tens of millions of dollars annually in new surcharges, fees and/or taxes on Arizona families and businesses.

Worse still, the imposition of an ObamaCare exchange here in Arizona may prevent ObamaCare from being repealed. As enacted, ObamaCare is dependent upon state exchanges (such as Gov. Brewer’s exchange) for the distribution of federal subsidies. Once Arizonans become addicted to federal subsidies, ObamaCare will be extremely difficult to repeal.

AFP-Arizona is calling on Arizona’s Legislators sign the Health Care Freedom Pledge and to STOP Governor Brewer from imposing an ObamaCare exchange.

Here is the key text of the Health Care Freedom Pledge:

“I hereby pledge to OPPOSE any bill, regulation, legislation, or executive action that implements President Obama’s health care legislation, including bills that create new bureaucracies that must be funded by new surcharges, fees, or taxes of any kind.”

AFP-Arizona is asking all Arizona Legislators to sign the Pledge by the tenth day after the end of the 2012 legislative session (probably sometime in late April). Legislators who fail to sign the Pledge are leaving the door open to the imposition of an ObamaCare exchange in Arizona–and harming the prospects for the repeal of ObamaCare.

Please use this link to take action to stop ObamaCare in Arizona.

You and your friends, neighbors and co-workers can also take action at our AZ Health Care Freedom page: http://americanhealthcarefreedom.com/who-stands-with-you/

And again, please join us in Tempe on Saturday to give Nancy Pelosi the reception she deserves… (More info at http://tinyurl.com/pelositempe)

To see how the Committee members (and other Legislators) scored on AFP-Arizona’s 2011 Legislative Scorecard, along with cumulative scores for past years, click here.

To learn more about AFP-Arizona’s 2012 Legislative Agenda, and to see how the Health Care Freedom Pledge will be scored on AFP-Arizona’s 2012 Scorecard, click here.

For Liberty, Tom

Tom Jenney
Arizona Director
Americans for Prosperity
www.aztaxpayers.org

Filed Under: Federal Government, Health Care, Press Release, State Budget, State Government, Taxation Tagged With: ,

Arizona must choose the right path on tax policy

March 15, 2012 By 2 Comments

By Stephen Slivinski

On March 12, the state senate in Oklahoma passed a bill that would immediately turn the state’s income tax into a flat tax, cut the tax rate in half, and strip away the extraneous tax credits and special carve-outs. Then, over a 10-year period, it would slowly phase the income tax out of existence by cutting the rates each year until they reach zero.

Meanwhile, in Arizona, special interests filed a ballot initiative for November that would extend the “temporary” sales tax increase passed by voters in 2010. Additionally, the initiative will lock-in automatic future increases in education spending, burdening taxpayers with ever-higher tax bills. Passage of this initiative will also guarantee that Arizona’s average state and local sales tax rate remains the second highest in the nation.

There is another path, however. The Speaker’s “jobs bill” (HB 2815), which has already passed the House, would eliminate the capital gains tax in Arizona, something no state with an income tax has yet done. In addition, the House has also passed HB 2123, which creates a tax-reform commission that will consider proposals to eliminate the income tax altogether, and issue recommendations by October.

This year, voters and policymakers will have a clear choice on what path tax policy in Arizona should take. Should we choose the path of high tax rates, a tax base with all sorts of special carve-outs, and business as usual at the Capitol? Or should we choose the path that lowers tax rates, makes the tax code more sane, and sets the state up for robust job growth and entrepreneurial activity that could make the state an economic powerhouse?

The choice is clear. Oklahoma has taken its first step down the right path. Arizona should too.

Stephen Slivinski is a senior economist with the Goldwater Institute.

Learn more:

Wall Street Journal: The Heartland Tax Rebellion

Oklahoma State Senate: Statement on the Passage of Tax Reform Bill SB 1571

Goldwater Institute: Unleashing Entrepreneurial Forces: States Can Spark Business Creation, Attract Venture Capital Investment, and Increase Job Growth by Eliminating Taxation of Capital Gains

Goldwater Institute: Investing in Arizona: How the Legislature Can Get Arizona’s Economy Moving Again by Reducing the Barriers to Investment and Job Creation

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

Support Public Pension Reform

March 13, 2012 By 4 Comments

by Byron Schlomach, Ph.D.

I’ll be blunt. Last year’s tepid reforms to the state’s pension systems were not enough.

Those reforms were probably about as far as the legislature could go and keep the pension systems in place for all future and existing public employees. But the only reform that can begin to dig us out of the financial hole pension systems represent would move all new employees to 401(k) plans. So far, that has been more than the legislature has wanted to bite off.

In the meantime, even the modest reforms passed last year have been under legal assault. The state recently lost a lawsuit in its bid to require employees in the Arizona State Retirement System (ASRS) to contribute a greater share of the pension system’s costs. Another lawsuit by judges would block any increases in their share of pension system costs and block modest limits on cost of living adjustments.

Judges participate in the Elected Official Retirement Plan (EORP) where employee contributions have been held to 7 percent of salary for at least a decade. Meanwhile, taxpayers are now contributing an average rate of almost 30 percent of salary, up from 7 percent a mere 10 years ago.

At least ASRS participants see their contributions rise and fall with taxpayers’. These judges are insisting that they not face any of the risk of their own retirements, even while they are still working.

Representative Kavanagh has proposed HCR 2060, a constitutional amendment to explicitly allow increases in EORP member pension fund contributions and to allow reductions in cost of living adjustments. This is minimal protection for taxpayers, especially when the judges who decide whether reforms are legal have a conflict of interest with the taxpayers they are sworn to protect.

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

Learn more:

Arizona Capitol Times: Judge overturns Arizona pension law change

Arizona Republic: Put-upon judges to defend their cushy pensions — in court

Filed Under: Arizona Politics, Economics, Elected Officials, Government Reform, Jobs/Labor, State Budget, State Economy, State Government

PAChyderm Coalition Publishes 1st Weekly Legislator Evaluation for this Session

February 24, 2012 By 5 Comments

Here is the general information provided about the evaluation:

We have been working with Republican legislators to refine the bill weights. The have had private access to our proposed weights prior to our publication of them.

The number of bills being tracked is 173 plus 37 bills that have strike all amendments.

There are a lot of legislators with high scores including many representatives who have +100% ratings!

Although we are well into the session, there are still many floor votes as well as committee votes to come. The scores currently are still heavily influenced by bill sponsorships compared to floor and committee votes, but, as more votes are taken, they will have an increasing impact on the scores as the session continues.

We have tightened up the categorization we apply to the scores. Reagan Republican and RINO have stayed the same, the Bipartisan Republican score range has expanded, and the other categories have higher score values with narrower ranges.

Click here to see the complete evaluation.


Filed Under: Conservatives, Elected Officials, Legislation, State Budget, State Economy, State Government, States Rights, Taxation, Uncategorized, Voters Guide Tagged With: , ,

Time for State to Look to GM on Pensions

February 23, 2012 By 26 Comments

By Byron Schlomach, Ph.D.

General Motors is moving 19,000 salaried workers off its pension plan to a 401(k) plan. The move will help reduce the risk GM’s pension poses to the company and investors, including the federal government – i.e., the American taxpayer. GM’s unfunded pension balance is currently $8.7 billion. GM’s profits in 2011 were $7.6 billion.

The new retirement plan makes sense for the company and for employees, who can now take an ownership stake in their retirement savings.

State governments would do well to consider taking similar steps. Arizona’s pension systems have a combined unfunded balance of $16 billion – an official total that is arguably low. State General Fund revenues stand at $8.4 billion, a position far more precarious than GM’s.

Moving state employees to 401(k)-style retirement plans not only makes fiscal sense, but would greatly reduce the risk to taxpayers, who, unlike investors in private companies, cannot simply opt-out of the risk by selling stock.

Dr. Byron Schlomach is Director of the Center for Economic Prosperity at the Goldwater Institute.

Learn more:

Joint Legislative Budget Committee: Historical General Fund Revenue Collections (PDF)

DailyFinance: General Motors Meets on Revenues, Misses on EPS

New York Times: G.M. Changes Pensions for Salaried Workers

Filed Under: Arizona Politics, Economics, Spending, State Budget, State Economy, State Government

No More Tax Credits for Hollywood

February 22, 2012 By 1 Comment

By Stephen Slivinski

It’s like a bad re-run. A few legislators are trying to revive Arizona’s film production tax credit (SB 1170) that lapsed in 2011.

According to the last annual report on the effectiveness of the credit, in 2009 four media companies completed production on credit-approved projects. After taking into consideration the small bit of sales tax revenue the film generated while in production, the state paid out a net of just over $2 million in tax credits. That’s an average of half a million dollars per project.

How many jobs did that create? About 41 jobs directly related to the project and another 20 that were presumably from the ripple effect on the local economy. An analysis by economists at the W.P. Carey School at Arizona State University shows that these jobs were temporary and, thus, the post-production employment impact of this tax credit was “minimal.”

States like Washington and Iowa terminated their film credit programs last year and others have suspended them until their effectiveness can be studied. The general consensus among analysts is that these credits cost more than they’re worth and their existence owes more to star-struck policymakers than it does to economic logic.

The legislature this year, just as they did last year, should avoid putting Arizona taxpayers back on the hook for film production. Arizona doesn’t need to buy another ticket to this overpriced flop.

Stephen Slivinski is a Senior Economist for the Goldwater Institute.

Learn more:

Arizona Department of Commerce: Motion Picture Production Tax Incentive Annual Report for 2009 (PDF)

Tax Foundation: Report on Film Tax Credit (2011)

Filed Under: Arizona Politics, Arts, Economic Development, Economics, Legislation, Movies, State Budget, State Government, Taxation

3 Republican legislators vote to continue corporate subsidies to newspapers

February 17, 2012 By 12 Comments
Cross-posted from IC Arizona
by Rachel Alexander

I couldn’t believe what I watched yesterday. Three Republican legislators – who all hold themselves out as conservatives – voted in a committee hearing to continue granting print newspapers an exclusive monopoly on public notices. Reps Carl Seel, Jeff Dial, and Terri Proud all voted against HB 2403, which would have brought us into the modern era and permitted public notices to be posted on the internet instead of print newspapers, including on government websites, saving taxpayers lots of money and increasing transparency. Websites like Sonoran Alliance and my IC Arizona would be able to post public notices at a  more competitive cost.

I wrote an article fully explaining the depths of this problem here. I received this email today about it: “I work for a newspaper and you’re 100 percent right … but I can’t say anything. Not only does the public pay to put notices in the paper, the law requires purchasing the paper to get the notices. They get you coming and going.”

It may not be too late to revive this bill. Please contact the three Republican legislators who voted against it and express your disappointment. Kudos to the Republican legislators who supported it, Sen. Andy Biggs, Rep. David Stevens and Rep. Justin Pierce.

Carl Seel – cseel@azleg.gov 926-3018
Jeff Dial – jdial@azleg.gov 926-5550
Terri Proud – tproud@azleg.gov 926-3398

Filed Under: Blogs, Conservatives, Elected Officials, Entitlements, Government, Journalism, Spending, State Budget, Taxation

The Capitol Buy-Back: Not a Bad Idea

February 7, 2012 By 10 Comments

By Byron Schlomach, Ph.D.

When I first heard Governor Brewer’s proposal to retire debt on the state’s capitol buildings, I thought it was a bad idea. The main reason: early-payoff penalties. There just was no good reason to bear such costs.

It turns out that early payoff penalties are not an issue. The state has to deposit a lump-sum of $106 million into an account that is held by a third party, over which ownership is exercised by the creditors who lent the state the $81 million secured by the capitol buildings. The cash substitutes for the buildings as collateral and we get back the deeds, free and clear.

The $106 million accounts for all the interest and principal we were going to have to spend to pay off the loan over the next 20 years. There is no pre-payment penalty.

Some might say that getting back the capitol buildings’ paper is just symbolic nonsense for the sake of the state’s centennial. And sentiment is a bad reason to pursue any policy. But this is more than a feel-good idea.

The biggest advantage to this early payoff, though, is that it avoids the temptation to spend temporary money on ongoing programs – the ones that it looks like we can afford now, but that we might not be able to afford later. We did that for several years before the recession, and look where that got us.

It’s not safe to assume we’ve entered into a long-term, steady economic expansion with steady government revenues to accompany it. So, while we have a temporary surplus, let’s pay down the state’s debt.

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

Learn more:

Office of the Governor: The Facts about a Capitol Buy-Back

Goldwater Institute: Living Debt Free: Restoring Arizona’s Commitment to its Constitutional Debt Limit

Filed Under: Arizona Politics, Economics, Spending, State Budget, State Economy, State Government
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