State Economy


This past week, LD7 candidate, Heather Carter, was featured in the Arizona Republic’s “My Turn” section.

“What does the future hold for Arizona? I envision a vibrant economic community, where people are employed, businesses are thriving and children are well-educated. I want a safe Arizona with a secure national border.”

(NOTE: The Republic makes it pretty clear to candidates that they will not be editing or proof-reading any candidate statements. All “My Turn” articles are published as-is and it is up to the candidate to make sure they submit only their best work. Fair enough, since the Republic interns are busy writing the news for the next day…)

“I am running for office to do the job that needs to get done – create a plan for Arizona that enables us to balance the budget, set a course for the future and focus on strong schools, strong economy and a safe community. I think part of the problem at the capital is people lose sight of the core mission…”

Now, I’m not sure what subject Mrs. Carter taught our LD7 children in school, but she must have had at least one dictionary in her classroom… Or maybe not, since she doesn’t know the difference between, “capital: as in, financial capital” and “capitol: as in the buildings making up our state capitol which Mrs. Carter wishes to serve in”. Let’s just hope she’s never taught civics/government/economics or any of the reading/English classes available to our kids.

“…get caught up in special-interest agenda items that take time and energy away from what we should be doing…”

Wait a second. I remember reading something about this… Oh yeah: Heather Carter was endorsed by the liberal AEA Union. This liberal union has been responsible for threatening legislators, protesting on the capitol lawn, holding back the budget process, as well as encouraging teachers to push Prop 100 using our kids. We’d like to know if Heather Carter was following her union boss in the picket lines last Spring. Seems like the only way the AEA union would endorse a Republican is if they knew they had her in their special-interest pocket…

Let’s make sure we support real conservatives, this August and November. Not union lackeys.

Here is a video clip from January 8, 2009, long before State Treasurer ever thought about seeking the Office of Governor with Napolitano on her way out.

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Observe the two styles of leadership exhibited here. Treasurer Martin is calm cool and collective but definitely firm in his warning to Governor Napolitano that the State of Arizona is going broke. Napolitano is clearly shaken, grabs her things and storms off.

Shortly thereafter, Governor Napolitano departed the State of Arizona leaving Secretary of State Jan Brewer to succeed her. With a Republican Governor at the helm, one would think that Brewer would have taken the Chris Christie approach to the state budget and cut, cut, cut spending. Instead we got a Governor who hiked, hiked, hiked the sales tax 18%. (Incidentally, the last Governor to do this was another Republican, Jane Hull.)

Now the State still finds itself in a budget crisis with no sign of closing the deficit and a recession that will likely double-dip.

If only Governor Jan Brewer could take the same approach to cutting spending, cutting taxes and reducing the size of government.

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Calculating how much he can spend

According to his campaign brochure, “Konopnicki opposes bigger government and party politics at taxpayer expenses” … Bill has “listened to your concerns … represented YOU and your issues…”  And finally, Bill Supports “… solving the budget problem.” [that he helped create]

The following oldie but goodie from the vault clearly illustrates where this term limited House member’s heart is – and just when Arizona’s economy was beginning to show signs of what was to come.

No wonder your county officials love him, they’re underpaid.

Az House-Senate panel clears way for county officials’ pay
Arizona Capitol Times, May 18, 2007 | by Luige del Puerto

A group of Arizona lawmakers stripped off an amendment to a proposal that would have required elected county officials to vote to accept a pay hike.

The current version of H2102, sponsored by Rep. William Konopnicki, R-5, seeks to raise the annual salary of seven county officials by approximately 13 percent. Affected officials include the county
attorney, assessor, recorder, sheriff, superintendent of schools, supervisors and treasurer.

In the original bill, the county attorney, for example, is guaranteed an increase to $123,678 from $109,450, and the sheriff, an increase to $100,824 from $89,225, beginning January 2009.
On May 15, six lawmakers – three members from each chamber – met in a conference committee and
adopted the House version of H2102. That version, which contains the sponsor’s original intent, now

goes back to the Senate and the House for final votes.
Konopnicki was opposed to the Senate amendment, offered by Sen. Ron Gould, R-3. His intent was to
remove the amendment in the conference.

Gould, who represented the Senate side together with Senators Jake Flake, R-5, and Rebecca Rios, D-23, anticipated the move.  Immediately after the House side voted to adopt the House version, Gould offered a verbal amendment to the Senate version of the bill.  The gist of his verbal motion was to require the county board of supervisors to take a majority vote to accept all or part of the proposed pay raise.

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I tried to find the Yes on 100 video the governor appears on TV on to include in this post.

But after watching this, I’m amazed.  Who does she really work for?

Well, if you are stumping for left wing unions and PACs, who are the major funders for this effort, well then, you’re working for left wing unions and PACs.

The ads are clever and list the most inane sounding unions and PACs as “major donors”, like the fire union and the Arizona Chamber of Commerce, but dig into the donor list and see who you find.  The ultra-left wing AEA, among other more notorious liberals.

Does Jan Brewer believe that one of these left wingers will EVER vote for her?  They wont.  Not until heck freezes over.

Jan Brewer and those Republicans who support her, in the true spirit of Orwellian doublethink and doublespeak, purport to be Reagan conservatives while simultaneously proclaiming that prosperity will only come via a tax increase.

They attempt to provide themselves with political cover by saying that Reagan raised taxes to close deficits.  Did he?  Arguable.  What is unarguable is that Reagan NEVER argued that you can tax yourself into prosperity.  But that is precisely the type of “leadership” Ms. Brewer would have us believe is Republican leadership.

It’s a farce.  They are trying to turn the world upsidedown and then say it’s right side up.  They are being left wing liberals and supporting left wing liberal agendas while trying to claim to be conservative Republicans and doing so in the midst of the TeaParty revolution.

Could the governor do anything MORE to hurt the Arizona Republican Party at this point in time?  I don’t think so.

This little gem is the best though.  See this video below, in it you will hear the standard tax and spend mantra:

Unless you vote to increase taxes, the prison doors will open, the school doors will close, children will die and ambulances will stop running.

Anytime you hear that, you are hearing a tax-and-spend liberal speaking about their issue. 

If the governor had any shame whatsoever, she would be embarassed by this.  I’m sorry, Governor, you cannot tax yourself into prosperity, no matter how you spin it.  Also, conservatives don’t advocate for tax increases, no matter how you spin it. 

If you’re going to argue that she’s pro-life, therefore she’s conservative?  Well there are pro-life democrats too.  Just being pro-life does not a conservative make.

Anyway, here goes…..  Jan Brewer: People are Going to Die Unless Prop 100 Passes

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I don’t know whether to laugh or cry.  But I’m mad.

 

by Byron Schlomach, Ph.D.
Goldwater Institute
 
Proposition 100 supporters are touting estimates from economists at the University of Arizona and Arizona State University. They claim an 18 percent increase in the state’s sales tax would cost fewer jobs than the number of jobs that otherwise may be lost due to reductions in the government spending.

Let’s think about this. If the state economists are right, it means the more we tax and let government spend, the more jobs we’ll have. Well, let me get on that bandwagon! Let’s not stop at an 18 percent tax hike; let’s double the tax rate and government spending along with it. We’d get a whole lot more economic growth.

The absurdity of this tortured economic reasoning, based on a popular Depression-era theory, can be illustrated by looking at a photo of earth taken at night. If the state economists were right, North Korea would be more than a big, dark blot. North Korea and Cuba would outshine the world with their prosperity.

Last year the Goldwater Institute asked the independent Beacon Hill Institute at Suffolk University to estimate the economic impact if the state raised the sales tax. They found the state will lose 14,000 private sector jobs. 

So which should you believe, the models of the university economists or the Beacon Hill model?

Beacon Hill’s model is consistent with real world evidence, like North Korea and Cuba. New research based on real-world experience in the United States by eminent Harvard University economist Robert Barro indicates that reducing government spending does not hurt the economy but tax increases do. Current research highlighted by the San Francisco Federal Reserve Bank comes to a similar conclusion.

Arizonans have a choice. They can choose to believe Beacon Hill’s economic estimates, which is consistent with real world evidence, or they can choose to believe a prediction based on a theory that evidence contradicts. Modern empirical results make it clear that a tax increase will damage our economic growth.

Dr. Byron Schlomach is an economist and the director of the Center for Economic Prosperity at the Goldwater Institute.

by Le Templar
Goldwater Institute

Tax Day is here, and even after everyone has finished paying Uncle Sam, the people of Arizona will be asked to pay even more.

Early voting starts in one week for the proposed 18 percent increase in the state sales tax. Champions of this tax hike claim the state budget has been cut to the bone. But did policymakers really get rid of all of the fat before asking for another $400 per family each year?

The Goldwater Institute has been explaining since January 2009 that the state of Arizona should fix its spending priorities first, instead of demanding that taxpayers sacrifice even more. This video illustrates how the state budget still has plenty of places to cut:

Click here to watch video

Le Templar is Communications Director for the Goldwater Institute

Alberta H. Charney, in the Eller College of Management Spring economic report, wrote an  article, “What Will It Cost If Voters Reject the One-Cent Sales Tax Hike?” The article is a textbook piece propaganda.

 Charney stated that passing the sales tax will raise about $1 billion annually (taking it from the private sector) But, she goes on to state, the government spends those dollars, pumping money back into the economy: “That spending by the public sector adds to aggregate demand just as private sector spending does.” 

My analysis: taking money from the private sector to pass through government to prime the pump of the private sector is not only inefficient but also ineffective:  government has to spend part of that tax money on its own operation. For example, the government tax removes $1 billion from the private sector but returns, for example, only $800 million to the private sector. In effect, government is always less efficient because it has to use part of the tax revenue to tax, collect and spend.

 Then she works her way through an analysis that the cost of the sales tax increase will cost Arizona only 7,400 jobs. Failing to approve the sales tax increase will cost Arizona 20,500 jobs. What she doesn’t say is the 7,400 jobs are in the private sector; the 20,500 jobs are in the public sector. Ergo, approving the sales tax increase will save over 13,000 jobs.

 As I read it, saying no to a sales tax increase reduces the size of government not the private sector. Saying yes to the sales tax increase reduces the size of the private sector by eliminating 7,400 private sector jobs, saves 13,000 plus public sector jobs, does not reduce the size of government and increases taxes by $1 billion during a recession.

 I know how I’m voting.

 

Arizona State Seal

For Immediate Release: April 1, 2010

PHOENIX – Citing the need for more jobs and to attract more businesses to the state, more than two dozen Arizona-based business and civic groups showed their support for HB 2250, the Economic and Jobs Recovery Bill, by signing a joint letter to Governor Brewer, Senate President Bob Burns and House Speaker Kirk Adams urging them to advance the bill.

“In this current fiscal crisis, no one knows better than Arizona’s business community how important retaining existing businesses and attracting new businesses are to our state,” said Speaker Kirk Adams. “The support of the business community for HB 2250 demonstrates the commitment they have to taking bold actions to ensure Arizona enjoys a prosperous future.”

HB2250 was developed in conjunction with leading economist Elliott Pollack to attract and retain industries that provide high wage jobs. The bill was passed out of the House of Representatives and is awaiting action by the Senate.

To view the letter, please visit this site.

For more information on HB 2250, please visit www.AZHouseRepublicans.com

by Clint Bolick
Goldwater Institute
 
It was like a scene from Atlas Shrugged: Polly Shaw of China-based Suntech told an Arizona House Government Committee hearing that massive solar production subsidies and even bigger consumer subsidies were not enough. If the Legislature passed House Bill 2701 and repealed the Arizona Corporation Commission’s rules that require utility companies to purchase increasing amounts of solar energy over the next 15 years regardless of the projected $1.2 billion cost to consumers, her company would pull its operations and a few dozen jobs from the state.

The Committee rejected her threat, approving the bill 5-2. But the next day, Governor Jan Brewer and Speaker of the House Kirk Adams, who co-sponsored the bill before deciding to kill it, successfully pressured the primary sponsor, Representative Debbie Lesko, to withdraw it.

Solar may be the most-subsidized industry in America, and is perhaps the only product that the Arizona government forces people to buy regardless of cost or technological feasibility. Solar doesn’t yet make sense as a wide-spread energy policy, and the mandates vastly exceed the Commission’s rate-making authority. That is why the Goldwater Institute is challenging the rules in court and 51 legislators co-sponsored the bill that would repeal them.

So, the solar lobby invoked the one word that will make normally sensible elected officials do crazy things: jobs. Yes, Suntech will employ 75 people. But between the lavish subsidies and costly mandates these may be the most expensive jobs ever created. Nevertheless, the strategy eventually worked; the bill is dead for now.

Suntech’s Shaw claimed the bill would “obliterate the demand for solar,” which may be true if that demand primarily is government-created. Mandate-based industrial policy didn’t work out well in the Soviet Union and it won’t work in Arizona. What’s especially perplexing, though, are the supposedly “pro-market” politicians who think its time has come.

Arizona should stop spending more and more in a frenzied competition with other states over who can give the biggest subsidies to solar and instead create a favorable tax and regulatory climate for all businesses, large and small, in any industry.

Clint Bolick is director of the Goldwater Institute Scharf-Norton Center for Constitutional Litigation.

by Byron Schlomach, Ph.D.
Goldwater Institute
 
Last week, the House Committee on Natural Resources and Rural Affairs approved HCR 2040, a measure that would refer yet another tax increase to Arizona voters. The proposal would require every Arizonan to pay an additional $12 for each license plate registration. The money would be directed to the state parks agency in an attempt to reopen some sites and to fund improvements at others.

HCR 2040 would establish this new tax at a time when few can afford the luxury of paying for other peoples’ recreation. Not everyone benefits from the state parks any more than everyone benefits when my family dines at a restaurant.

This new funding mechanism would place state parks in a position of unaccountable financial independence somewhat similar to the state transportation department and the new Early Childhood Development & Health Board. Self-funded agencies often are not particularly responsive to those they are supposed to serve.

One of the biggest complaints from legislators as they work on the state budget this week revolves around Proposition 105, the 1998 initiative that protects voter-approved spending. The repeated excuse for failing to respond to falling tax revenues has been that much of the spending is off-limits to legislators.

HCR 2040 would make this problem worse, placing more of a financial burden on Arizonans that cannot be easily offset and would further erode our tax-paying capacity. Tax revenues should be spent according to current circumstances and constitutional limits, not momentary whims that later become inflexible mandates.

There is another solution on the table to keep parks open: let private companies manage them and pay the state for the privilege. Last week Fox News commentator Glenn Beck interviewed a local business owner who wants the opportunity to keep our parks open. Until the legislature gives this idea a fair shake, a tax increase shouldn’t even be discussed.

Dr. Byron Schlomach is an economist and the director of the Center for Economic Prosperity at the Goldwater Institute.

The deadline for filing a ballot argument against the Brewer Tax is TOMORROW, Thursday, February 25, at 5:00 p.m.  For $75, you can tell three million of your fellow voters why an 18-percent increase in state sales taxes will be bad for you, your family, and your business.  Your argument will appear in the ballot pamphlet that goes out to voters before the May 18 election.

PLEASE ACT QUICKLY:  Your words could STOP a billion-dollar sales tax hike!

Here’s the order of operations:

1) Write up a Word document with an argument that is less than 300 words, including your name.  (Don’t cut it close to 300 words—leave room for a bad word count.)  Include the words “Argument Against Proposition 100” at the top. Put your address at the bottom.

I’m sure you have plenty of ideas, but here are more:

http://www.americansforprosperity.org/022310-some-arguments-against-prop-100-aka-brewer-tax

Here is a link to my personal argument against Prop 100:

http://www.americansforprosperity.org/files/jenneyargumentagainst100.pdf

If those links don’t work, go to www.aztaxpayers.org and Scroll down to What’s New.

Note that I filed it as an individual (with an individual check, and my individual address listed), rather than as the officer of an organization. Technically, they want two signatures, if your letter is supposed to represent an organization.

2) Print it out, but wait to sign and date it until you get to a notary (there is a notary at the Elections office of the AZ Secretary of State, and YOU HAVE TO GO TO THEIR OFFICE, so that is a more efficient way to do it).

3) Email the finished Word document (the exact version you printed) to elections@azsos.gov

4) Bring the printed copy and a check for $75 (made to “Arizona Secretary of State”) to the AZ SOS office before 5:00 pm today or tomorrow (Thursday, February 25).

How to get to the AZ SOS office in downtown Phoenix:

From the East or from Routes 51, 60 or 202: Get on I-10 westbound. Get off of I-10 at 19th Avenue, go south past Adams and make a left on Washington, then make a right into the big parking lot. If you get to the light at Jefferson, you’ll have to go left, and then make a left into the big parking lot. The AZ SOS office is in the nine-story tower building east of the parking lot. If you have any weapons, leave them in your car, because you’ll have to go through security. Go through security and go up in one of the elevators to the right (south). The SOS phone number is (602) 542-8683.

From the west and from I-17 north: At the I-10/I-17 interchange, take I-17 southbound. Get off of I-17 at Jefferson Avenue, and go east. After the light at 19th Avenue, make your first left into the big parking lot. The AZ SOS office is in the nine-story tower building east of the parking lot. If you have any weapons, leave them in your car, because you’ll have to go through security. Go through security and go up in one of the elevators to the right (south). The SOS phone number is (602) 542-8683.

Map: http://www.mapquest.com/maps?city=Phoenix&state=AZ&address=1900+W+Adams+St&zipcode=85009-5241&country=US&latitude=33.449199&longitude=-112.100298&geocode=ADDRESS

5) Get off on the 7th Floor, and go to the window. The friendly and courteous SOS staff will assist you with getting your signature notarized. They will also do a word count. When your argument is approved, they will give you a photocopy of your signed and notarized argument and your check.

I’m sorry about the late notice, and like you, I am annoyed that people have to file the arguments in person, in downtown Phoenix (makes it easy for the lobbyists and state workers to file, but hard for the average Joe).

For Liberty, Tom

Tom Jenney
Arizona Director
Americans for Prosperity
(Arizona Federation of Taxpayers)
www.aztaxpayers.org
tjenney@afphq.org
(602) 478-0146

To: poster #2 on the Konopnicki swap with Allen story (PCbutnotPC). Since you said Konopnicki has something to offer it got us to wondering and we found this little gem. What we really thought was interesting was the food tax proposal and in the video, a hospital bed tax proposal. Yes, Konopnicki does have something to offer … but isn’t leadership putting your name on your work?

Arizona lawmakers review Mystery Alternative Budget Proposal

By Paul Davenport

PHOENIX (AP) – Arizona legislators are examining and debating an alternative budget-balancing proposal whose origin remains somewhat murky.

The proposal widely circulating at the Capitol in recent weeks has been called a bipartisan alternative to Republican Gov. Jan Brewer’s budget proposal, skipping her spending cuts while using significantly more tax increases and borrowing.

Brewer’s plan is the basis for a legislative budget proposal that majority Republicans are drafting behind closed doors.

Several legislators have voiced support for parts of the alternative while acknowledging involvement in 2009 discussions leading to its preparation.

Republican Rep. Bill Konopnicki of Safford has told The Associated Press he personally paid $2,000 to a retired California university economist to help compile the proposal.

However, none of those lawmakers accepted invitations to discuss the proposal Thursday during a joint House-Senate briefing to compare it with Brewer’s offering, said House Appropriations Committee Chairman John Kavanagh, R-Fountain Hills.

That left Kavanagh and several other senior Republicans complaining they don’t know the alternative proposal’s true origins and couldn’t ask questions to its drafter or drafters about its revenue assumptions and specific provisions.

“If they can’t put on their big-boy pants … and take responsibility for the plan they’re trying to implement, then they must not really believe in them,” said Rep. Rick Murphy, R-Glendale.

http://www.azpbs.org/horizon/play.php?vidId=1704

[does anyone remember watching Horizon on PBS on Feb. 2, 2010?]

Kavanagh said he won’t spend more time on the alternative because issues as important as the budget require more transparency.

“It’s a real threat to the institutional process. This committee is not a hotel where you book a room and bring in whoever you want,” he said.

However, several other lawmakers, including Democrats and at least one Republican, said their colleagues should keep the door open and not reject the alternative proposal out of hand.

“We have a culture that doesn’t encourage people to step out and try to find ideas that are out of the box,” said Rep. Vic Williams, R-Tucson.

Responded Senate Appropriations Chairman Russell Pearce: “I’m not sure I’m finding any gems here. It’s $3 billion of taxing.”  Pearce, R-Mesa, at one point said parts of the alternative proposal mirrored a budget spreadsheet linked to an Arizona State University administrator.

But ASU officials have denied involvement, Pearce said.  The university official named by Pearce, Richard Stanley, did not immediately respond to a query e-mailed to him by the AP.

By raising your automobile license fees by $9 per vehicle per year… from the Payson Round-Up:

… state Rep. Bill Konopnicki and others have introduced a bill that would add $9 to the vehicle license fees to fund state parks.  The surcharge on license fees would also give state drivers free entrance to the state park system, prevent the Legislature from diverting entrance fees and provide enough money to keep the state parks system operating.

Konopnicki’s vehicle license fee charge could provide a long-term solution to the problems of the whole system, if it makes it through the Legislature.  “The parks system is currently operating on about $21 million,” said Konopnicki, “but they really need about $30 million. This should generate better than that.”  Konopnicki said it would be foolish to shut down the state parks system for lack of operating funds, considering the economic benefits the system yields —

So were local public and private solutions entertained by the State Parks Administration?  What do you think?  Payson offered to take over operation of the local state park and were shut down when the counter offer from Parks included an up front charge of over $1,000,000.

Imagine the economic boost locally if a state park was partially privatized and partially operated locally?  Guess they’ll never find out.

Bottom Line?  The state agency wasn’t interested in finding solutions and used the “scare and squeeze” tradition preached by Representative Konopnicki as a ploy to increase fee revenues to continue spending.

Scare and Squeeze … just what the Phoenix Police Union is doing to get the 2% tax on your food, and Mr. Konopnicki is the King of Welfare for failing local governments and state agencies.

By Byron Schlomach, Ph.D.
Goldwater Institute
 
I recently attended a meeting with Maurice McTigue, director of the Mercatus Center at George Mason University, a former member of the New Zealand Parliament, and a man with wide experience in government reform. Attendance at the meeting, arranged by State Senator Sylvia Allen, should have been required for everyone in our state government.

Prior to comprehensive reforms 20 years ago, New Zealand was an economic mess, suffering from debt, continual deficits, and a stagnating economy. Out of desperation, New Zealand’s political leaders reduced government spending and enacted fundamental, wide-ranging reform. Since then, New Zealand’s national government has seen a single deficit; it was this year and due to the worldwide recession.

One instructive example given by Mr. McTigue concerned agriculture subsidies, which, among other things, were artificially inflating land prices. Everybody knew land prices would collapse when those subsidies ended. Some estimated 31 percent of farmers and at least seven major banks would go bankrupt. Yet, with no bailout or any other government involvement, only one-half of 1 percent of farmers went bankrupt. And not a single bank went under.

An outbreak of “spontaneous economic order,” as Mr. McTigue described it, resulted. Banks re-valued loans to avoid defaults. Farmers renegotiated payment schedules. People figured out how to navigate the changing economy without government intervention.

This example may seem most applicable to federal financial policies in response to the U.S. real estate meltdown; but, the lesson is broader. We commonly hear stories that if Arizona cuts spending on parks or education or health care, our economy will collapse. Yet New Zealand’s experience illustrates that fundamental reform, rethinking, and shrinking of government should be welcomed, not feared.

Byron Schlomach, Ph.D., is the director of the Goldwater Institute’s Center for Economic Prosperity.

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