Goldwater Institute: Who Is Really Responsible for Teacher Pay?

by Matthew Simon

West Virginia, Oklahoma, Kentucky, and Arizona have all been mired in a teacher pay debate, but one question is rarely asked or answered: Who is really responsible for teacher pay?

In states across the country, the clamoring for increased pay has been well-coordinated, and the demands are costly. Teachers in West Virginia left their classroom posts for nine days, and teachers in Oklahoma rounded out their first week out of the classroom. Teachers in West Virginia returned to their classrooms after receiving a 5 percent pay increase and teachers in Oklahoma still walked out of their classrooms after receiving an average increase in pay of $6,100, demanding that it be $10,000. In Arizona, this has been dubbed the #RedforED movement. Teachers in one school district shut down nine schools in a coordinated “sickout,” and more are purportedly planned to come. Arizona Educators United and the Arizona Education Association have outlined demands in order not to abandon their classrooms, which was agreed to under their contract. Among these demands include a 20 percent teacher pay raise, which could cost Arizona taxpayers approximately $680 million in the first year alone, not including the annual inflation adjustment. Their total funding demands, according to some estimates, reach into the $5 billion figure.

The debate over teacher pay reached new heights in Arizona when the Legislature passed a 2.12 percent teacher pay increase over two years on top of all of the other funding put into schools in 2017. This pay raise was outside the norm and is not how schools are funded in Arizona. It created cumbersome language to ensure that the dollars went to the intended recipient. Not only was this just bad policy because the state doesn’t fund teachers (it funds students), but also because it reinforced this idea that state lawmakers dictate what teachers’ salaries are.

What is far too often left out of the conversation are locally elected school district governing boards. These independently elected governing boards wield considerable power in their positions by creating policies, crafting school district budgets and setting teacher pay. Collectively, these school district governing boards allocated over $8.7 billion during the 2017 school year. Because of this local management of dollars, the Classroom Spending Report produced by the Auditor General becomes increasingly informative. The Auditor General puts school districts into operational efficiency peer groups by the size, type, and geographic location of school districts.

According to the 2017 report, Tempe Elementary School District (TESD) and Alhambra Elementary School District (AESD) were in the same operational peer group. Both served a similar number of students, and they are elementary districts in urban areas. However, when you look at teacher pay and revenues generated per student, it becomes clear how local decisions can have a huge impact on teacher pay. TESD received, on average, 25 percent more per pupil than AESD but paid its teachers almost 30 percent less, on average.

TESD AESD
Students 11,049 12,524
Schools 21 14
Per Pupil $11,512 $8,562
Teacher Ratio 15.1 20.6
Avg. Years 9.3 10.4
Teacher Pay $40,899 $58,362

This isn’t the only example. Paradise Valley Unified School District (PVUSD) has been the subject of much media attention. In fact, one of the teachers within the school district posted her pay stub on social media. Her annual salary: $35,490. How could a teacher with nearly 10 years of experience and a school district that receives $10,501 per pupil be paid so little? It becomes even harder to comprehend when compared to Gilbert Unified School District (GUSD). Again, the Auditor General put these two school districts in the same operational peer group. GUSD received 16.9 percent less per pupil than PVUSD, but it was able to pay its teachers 5.5 percent more.

PVUSD GUSD
Students 30,741 33,808
Schools 44 40
Per Pupil $10,501 $8,720
Teacher Ratio 17.4 17.8
Avg. Years 12.7 11.9
Teacher Pay $48,299 $51,125

And just to make the point abundantly clear, Balsz Elementary School District (Balsz) and Tolleson Elementary School District (Tolleson) show a similar trend. Tolleson receives 24.5 percent less than Balsz per pupil, but it is able to pay its teachers, on average, 13 percent more.

Balsz Tolleson
Students 2,315 2,980
Schools 5 4
Per Pupil $11,998 $9,049
Teacher Ratio 17.7 19.6
Avg. Years 8.9 9.6
Teacher Pay $44,954 $51,705

If Arizona teachers and the public have a gripe with elected officials, the elected officials they should be targeting with this anger need to be their locally elected school district governing boards. The comparisons make it clear: It’s about how those dollars are spent. When a school district governing board prioritizes teacher pay, teacher pay is higher. If the Legislature were to meet the multi-billion dollar demands of #RedforED, there is no guarantee that those dollars would get where they were intended to go. Instead, these teachers and the public should be attending their local school district governing board meetings, examining their budgets, and holding them accountable.

This article can be read here.

Matthew Simon is the director of education policy at the Goldwater Institute. 

Is Senator Kimberly Yee Feeling the Bern?

Is this GOP State Senator Feeling the Bern?

Source: American Action News

http://americanactionnews.com/articles/is-this-gop-state-senator-feeling-the-bern

An Arizona State Senator is pursuing a strange, populist course of action that puts her in camp with Bernie Sanders and Elizabeth Warren- the sort of interest rate voodoo that helped create the financial crisis:

Arizona State Senator Kimberly Yee is not making any new friends among the free-market Republican crowd in Arizona. In a recent Senate hearing, Yee, who has been touted as a rising star in the party, held her fire after a long debate until the voting opened on a financial services bill in her committee. She then unloaded with full ammunition on the financial services industry and their free market principles.

“This bill just doesn’t feel right,” Yee proclaimed. “I am standing with the poor,” while attacking the well-funded groups who were supportive and their consultant class.

Yee went on to explain she has a “strong moral compass” and wants to protect people – that she would possibly consider a bill capping interest rates on loans in Arizona, a position which is specifically prohibited under federal law by Dodd-Frank.  By promoting rate caps, Yew veers left of the Obama Administration.

The issue at hand in last month’s Senate Commerce committee hearing was a proposed consumer lending bill known as Flexible Credit Loans, which would create a new credit product for up to $2500 over the course of a two-year loan term. Yee emphatically stated she could not back the measure before teeing off on its supporters with a blistering rhetoric.

The bill (and ones like it across the country), however, is supported by a broad base from left of center to the far right.  In Arizona, leading free market groups, the Arizona Free Enterprise Club and the Goldwater Institute have spoken out in favor of the legislation.

One conservative Republican interviewed on the subject off the record stated that they were quite surprised at Yee’s comments and mini tirade.  “She sounded more like Bernie Sanders than an Arizona Republican.  I’m not quite sure where all of that came from.”

# # #

The Arizona Senate & Medicaid Expansion: A Lesson in Making a Bad Bill Worse

By Christina Corieri

Last week, the Arizona Senate passed Medicaid expansion. Sadly, the proponents were not satisfied with merely passing a program expansion we can’t afford; they actively worked together to kill a series of common sense amendments that would have prevented extra expense and abuse.

One amendment would have activated the circuit breaker if the federal government ever dropped its share of the cost below the promised 90 percent, but every senate Democrat and five Republicans voted the amendment down, signaling that the Feds should feel free to increase Arizona’s costs.

Another amendment would have required an independent audit to ensure hospitals don’t pass the provider tax on to patients. Expansion proponents voted the amendment down, making it easier for hospitals to illegally pass the cost along without fear of being caught.

An amendment was offered to require an annual report on the quality of care provided by AHCCCS, Arizona’s Medicaid program. Although taxpayers have a right to know whether their money is being put to good use, these same senators voted the amendment down. Without this transparency, proponents can continue to assert how well the program works without risking evidence to the contrary.

This coalition also voted down amendments designed to curtail non-emergency use of emergency rooms and ambulances, which result in high, unnecessary costs to the state. Likewise, they voted down amendments to require health professionals and pharmacists to check the prescription monitoring database before authorizing or filling a member’s prescription for a controlled substance such as Oxycodone, Percocet, or Vicodin. These amendments would have saved taxpayers from paying for and enabling addictions to these medications.

While the Medicaid expansion is a costly and misguided policy, these amendments were not poison pills but sensible ways to mitigate some of the costs and prevent abuse. The proponents, however, made a bad bill much worse by rejecting these amendments. Thankfully, the Senate does not have the last word. While we hope the House declines the Medicaid expansion, at a minimum, we hope it supports some common sense amendments that will help protect taxpayers.

Christina Corieri is a health care policy analyst with the Goldwater Institute.

 

Ten Reasons to Decline Medicaid Expansion in Arizona

By Christina Corieri, Heath Care Policy Analyst, Goldwater Institute

1. Expanding Medicaid will cost Arizona hundreds of millions of dollars.

For the first three years, the federal government has promised to cover 100% of the medical costs for the newly eligible Medicaid enrollees, and yet the cost to Arizona’s General Fund for the first year alone would be $154 million. The costs to the state are a result of the fact that the federal reimbursement rate of 100% applies only to the direct medical expenses of the newly eligible enrollees, not the additional administrative costs. Additionally, the 100% reimbursement rate does not apply to those new enrollees who were previously eligible but either did not know it or otherwise failed to enroll.

The true costs to Arizona have been hidden by projections that reflect only the first three years of the expansion, not the later years when the state’s share increases. The Kaiser Family Foundation estimates that the total cost to Arizona for 2014-2019 could be as high as $739 million depending on how many newly eligible people enroll.

2. A supermajority vote is required to authorize new taxes.

In 1992, Arizona voters passed Proposition 108, which requires approval of 2/3 of both chambers of the Legislature to impose a new tax or fee or to increase an existing tax or fee. There is a narrow exception for “fees and assessments that are authorized by statute, but are not prescribed by formula, amount, or limit, and are set by a state officer or agency.”

The proposed Medicaid expansion disregards the spirit and letter of the law. Because the Governor’s office has explicitly prescribed the assessment amount in the proposed budget, the tax increase doesn’t fall within the exception in the law.

If legislators authorize a provider tax by a simple majority vote, they will circumvent the will of the voters and will be vulnerable to a lawsuit that, if successful, will leave the legislature with an expensive Medicaid expansion that lacks a funding mechanism.

3. The federal government is unlikely to maintain promised funding rates.

President Obama has already proposed cutting the promised reimbursement rate to states in his last two budgets.

The Governor’s office has acknowledged that Washington will likely cut its promised funding level. A publication released from the Governor’s office in January entitled Difficult Choice: Expanding Adult Medicaid Coverage states “it is probable that, at some point, the federal government will choose to reduce reimbursements to the states as a consequence of its own fiscal challenges.” In fact, the circuit breaker, which is intended to protect Arizona from additional costs, is not activated until the federal government cuts the reimbursement rate for the newly eligible enrollees to less than 80% – effectively allowing the federal government to double Arizona’s share of the costs before the state would react.

4. The provider tax, which is the proposed funding mechanism for the expansion, could be limited or eliminated.

A provider tax is a scheme by which states tax healthcare providers in order to draw down additional federal matching dollars. The tax paid by healthcare providers is returned to them via increased Medicaid spending in the state or increased Medicaid reimbursement rates to providers.

There are growing calls from both sides of the aisle in Washington to limit or eliminate the ability to assess a provider tax. Attacks have come from President Obama, Majority Whip Durbin (D-IL), Senator Corker (R-TN), House Republicans, and the Simpson Bowles Commission. If the provider tax is limited or eliminated, Arizona will be left holding the bill.

Eliminating or limiting the provider tax will not trigger the circuit breaker despite the fact that it would leave the expansion in place with no funding source besides the general fund.

5. The circuit breaker may not be enforced by a future governor and future legislature.

The circuit breaker is designed to automatically abolish the Medicaid expansion if the federal reimbursement rate for the newly eligible enrollees ever falls below 80%.

If circuit breaker is triggered, the sitting governor and legislature would face a media storm as thousands of people who had become dependent on free government health care were removed from the Medicaid rolls. Arizona has already experienced such a media storm when the state did not drop coverage, but merely froze enrollment for childless adults up to 100% of the federal poverty level in 2011.

6. The Woodwork Effect is likely to be much larger than anticipated.

The federal health care law’s higher reimbursement rate does not apply to the costs associated with those individuals who are newly enrolled but who were previously eligible – this is referred to as the “woodwork effect.”

When Arizona passed Prop 204, it was estimated that roughly 129,000 people would fall into this category. But by 2003 it was approximately 250,000 – almost double the original estimate, costing the state hundreds of millions in unexpected money.

7. Uncompensated care is unlikely to decrease.

The Governor’s office has stated that uncompensated care results in a hidden tax of $2,000 per family per year that is reflected in the family’s insurance premium. Proponents of the expansion claim that it will solve the problem of uncompensated care and eliminate this hidden tax.

The same claims were made by proponents of Prop 204, but neither claim proved true. Uncompensated care increased by an average of 9% a year during the first seven years of the Prop 204 expansion according to a study by the Lewin Group. And the average family premium increased from $8,972 in 2003 to $14,854 in 2011 – a 66% increase. There is no reason to believe the results will be different this time.

8. Cost projections are likely incorrect, as Arizona’s last Medicaid expansion illustrates.

The Prop 204 expansion was four times more expensive than the projected cost each year. For example, in 2008, the cost of covering the Prop 204 population was projected to be $389 million, but the cost was actually $1.623 billion.

9. There is no rush because a state can choose to expand Medicaid at any time.

The Centers for Medicare and Medicaid have made it clear that states may opt into the Medicaid expansion at any time. It would be wise for Arizona to wait and see how the expansion plays out in other states before committing Arizona to an expansion that will be incredibly expensive and difficult to roll back.

10.There is no such thing as free federal money.

This “free federal money” is borrowed money which taxpayers must pay back.

By agreeing to the Medicaid expansion, Arizona legislators would be committing current and future Arizona taxpayers to billions of dollars in new federal debt, and each Arizona legislator who votes for the expansion will be complicit in Washington’s spending problem.

Click here to download “Ten Reasons to Decline Medicaid Expansion in Arizona.”

Proposition 116’s Fate Awaits Election Day

www.VoteYESon116.com

Facebook: Vote YES on 116

Twitter: @VoteYESon116

As the VoteYESon116 campaign heads into the home stretch, small business job creators are optimistic that Arizona’s voters will pass Proposition 116, the Small Business Job Creation Act. The unanimously-passed referendum would create new jobs in Arizona by rolling back the burdensome annual equipment and machinery tax that’s levied before a small business hires its first worker, makes its first sale or even turns a profit. To keep up on developments with the campaign, visit these sites and share them with your family, friends, neighbors and anyone who values your opinion: 

OFFICIAL RESOURCES

VoteYESon116 – visit the official “yes” campaign website to learn more about the referendum

“What’s on My Ballot? – Proposition 116, Arizona’s General Election Guide 2012” – an official publication of the Arizona Secretary of State’s Office

NEWS COVERAGE

“Voters to decide fate of tax exemption for businesses” – newspaper coverage by the Arizona Republic’s Ryan Randazzo

“Proposition 116 supporters say it would spur hiring” – Cronkite News’ Sarah Pringle explains Proposition 116’s impact on job creation

“Prop. 116 supporters: Lower business property taxes would spur hiring” – wire service coverage at KTAR radio’s website from the Associated Press

“Prop 116: Business tax exemption on ballot” – newspaper coverage in the Yuma Sun by Capitol Media Service’s Howard Fischer

NEWSPAPER EDITORIALS

“Our position… Proposition 116: Support”Arizona Republic, October 18, 2012

“Courier: Yes on Proposition 116”Prescott Daily Courier, October 20, 2012 

“Proposition 116 — Yes”Casa Grande Dispatch, October 24, 2012 

“Vote for the good of business”Inside Tucson Business, October 12, 2012

“Proposition 116 would stimulate state economy”Yuma Sun, October 4, 2012

 

VIDEOS

VoteYESon116 “I’ll Hire” Commercial

VoteYESon116 “Cupcake” Commercial

“Vote 2012: Proposition 116” – a 7 minute 23 second video from Eight, Arizona PBS’s Arizona Horizon program on Proposition 116 with NFIB’s Farrell Quinlan

“Arizona Secretary of State Ken Bennett’s 2012 Ballot Measure Town Hall. Proposition 116 – Taxes on Business Equipment & Machinery” – a two-minute video on why voters should pass Proposition 116 featuring NFIB/Arizona’s Farrell Quinlan

“Proposition 116 increases tax exemption for businesses” – a 1 minute 26 second video from Cronkite News reporter Mugo Odigwe features small-business-owner Margie Long of Hot Air Expeditions and NFIB’s Farrell Quinlan on the effects of Proposition 116 on job creation

ORGANIZATIONAL ENDORSEMENTS

Americans For Prosperity – Arizona
American Rental Association – Arizona
AMIGOS (Arizona Mining and Industry Gets Our Support)
Arizona Cattle Feeders’ Association
Arizona Cattle Grower’s Association
Arizona Chamber of Commerce and Industry
Arizona Farm Bureau Federation
Arizona Multihousing Association
Arizona Technology Council
Chandler Chamber of Commerce
Fountain Hills Chamber of Commerce
Goldwater Institute
Greater Phoenix Chamber of Commerce
National Federation of Independent Business – Arizona
Nogales-Santa Cruz County Chamber of Commerce
Printing Industries of Arizona
Tempe Chamber of Commerce
Tucson Hispanic Chamber of Commerce
Tucson Metro Chamber of Commerce
United Dairymen of Arizona
Western Growers

Arizona Proposition 204 is Bad Policy

Arizona Proposition 204

Arizona Proposition 204 is bad policy. A close look at the fine print in Proposition 204 reveals the true purpose of the initiative.

The measure creates 14 separate carve outs for special interest groups, creating a grab bag of taxpayer funded giveaways. While special interests are getting enriched, Arizona families will see a $1 Billion dollar PERMANENT tax increase. If passed, Arizona will become the second highest sales tax state in America, just behind Tennessee, a state with no income tax.

But, how does Proposition 204 reward politically connected groups? The device is a list of “designated funds” that would dictate how the money is spent. Students and teachers in the classroom are barely in the equation.

Arizonans need only to read the ballot language to see that Prop 204 is more about “pet projects” and less about improving the state’s education system.

CHAPTER 28

STATE INFRASTRUCTURE FUNDING 
ARTICLE 1. ADDITIONAL FUNDING FOR STATE INFRASTRUCTURE

28-9301. State infrastructure fund

A. THE STATE INFRASTRUCTURE FUND IS ESTABLISHED CONSISTING OF LEGISLATIVE APPROPRIATIONS, FEDERAL MONIES, PRIVATE GRANTS, GIFTS, CONTRIBUTIONS, DEVISES AND MONIES DEPOSITED IN THE FUND PURSUANT TO SECTION 42- 5029.02. MONIES IN THE FUND ARE CONTINUOUSLY APPROPRIATED TO THE DEPARTMENT FOR THE PURPOSES PRESCRIBED IN THIS SECTION AND ARE EXEMPT FROM THE PROVISIONS OF SECTION 35-190 RELATING TO LAPSING OF APPROPRIATIONS.

That’s why Doug Ducey, Arizona’s State Treasurer said, “Prop 204 is genuinely bad policy. It makes a permanent, billion-dollar-a-year spending commitment; it provides for no oversight as to how the money is spent; and it makes no reforms that actually improve accountability or the quality of education. Prop 204 amounts to just throwing money at a problem and hoping that somehow, magically, things will just get better.”

Out of the $1 billion collected every year, only $125 million would go to the state’s general fund for “inflation adjustments” for K-12 education. Then the spending begins to disburse $875 million to the initiative’s pet projects through the designated funds.

  • The largest share, $500 million, goes to something called the quality education and performance fund to assist K-12 schools with “assessment and accountability” rules. Sounds good right? But the ballot language specifically uses the word “may use the monies.” There is no guarantee that they will be used effectively, again no oversight or accountability, just words on a page.
  • The state infrastructure fund gets $100 million for road-building and public transportation.
  • The family stability and self-sufficiency fund receives $100 million to support families living below the poverty level.

That takes care of $700 million projected for the designated funds. The first fund feeds bureaucratic record keeping. The second supports contractors and transportation subsidies. The third funds a social services program outside the purview of education.

The rest of the money — $175 million – goes to fund areas that again lack accountability and oversight.

To fund the $1 billion a year initiative, taxpayers will be forced to pay a one-cent increase in the state’s sales tax rate. The initiative forbids the Governor and State Legislature from any participation in spending the funds.

In fact, Prop 204 prevents the Auditor General, the Joint Legislative Budget Committee or the Governor’s Office from doing any performance audits on how the money raised is to be spent. So much for sunshine and accountability.

If Arizona wants long-term education reform, Proposition 204 is not the answer. Proposition 204 is just too taxing on Arizona families.

To learn more, please visit VoteNoOn204.com or Vote No on 204’s Facebook Page.

OBAMACARE: A Panel Discussion at the Goldwater Institute

FOR IMMEDIATE PRESS RELEASE

A Panel Discussion: OBAMACARE

Phoenix, AZ – On Wednesday, February 8, 2012, Arizona Mainstream Project (AMP) will bring to the public a panel discussion on Obamacare.  Speaking on this panel will be Goldwater Institute’s Senior Attorney Diane Cohen and Director – Center for Economic Prosperity Byron Schlomach, Dr. Jeff Singer, and former AZ Congressman John Shadegg.  550 KFYI Talk Host Terry Gilberg will be the moderator for the discussion.

Each panel member will share their personal expertise and direct involvement with uncovering the facts about The Affordable Care Act and how it has begun and will continue to negatively impact the lives of ALL Americans.  You will gain a better understanding of this law and how it applies to your access to health care, the current legal battles, and how you can help stop this anti-American and socialistic agenda.

Diane Cohen:

The Affordable Care Act mandated states to establish insurance exchanges by 2014 or have exchanges set up by HHS. These exchanges are nothing more than invitation-only clubs where only government sanctioned insurers can play. They must meet all the federally mandated medical coverages/benefits specified by the Secretary of Health and Human Services. In an effort to preserve some sovereignty, states, even some who opposed the federal healthcare law, including Arizona, are rushing to get federal money to set up these exchanges. Diane Cohen, Senior Attorney, of the Goldwater Institute will refute this notion.  Ms. Cohen has testified before Congress on the Independent Payment Advisory Board (IPAB). She will explain what effect this fifteen-member board of political appointees will have in our future.

Dr. Byron Schlomach:

Byron will discuss how government is at the root of our problems in health care, making it the problem, not the solution. He will show you how our income tax system plays a major role in determining what our health care system looks like and how it operates.

Dr. Jeff Singer:

Dr. Singer will discuss the ways in which “Obamacare” will affect the patient doctor relationship, the relationship of the doctor with the state, the relationship of the patient with the state, the loss of personal autonomy, and the ultimate decrease in quality and rationing of heath care that will inevitably result from “Obamacare.”

John Shadegg:

President Obama promised that the cost of health care would go down and it hasn’t. A recent HHS press release acknowledged that premiums have gone up by as much as 12.8% in the last year after the rates were reviewed by state bureaucrats under the provisions of Obamacare. Obama has also promised that if you liked your health care plan, you could keep it. Yet, we now know that Obamacare mandates will not allow anyone to keep the plan they had. As the nation’s economy struggles, Obamacare increases taxes by 800 billion dollars and crushes jobs. Learn how free market solutions will reform health care in ways that promotes quality and reduces costs for all Americans.

Date: Wednesday, February 8, 2012
Location:  Goldwater Institute Auditorium
Address: 500 E. Coronado Road, Phoenix,  AZ

Time: 6:00 pm – 8:30 pm (doors open at 5:30)

Light snacks and beverages will be served

Cost:  $10.00 per person

To reserve your seat we encourage you to RSVP and purchase tickets in advance

Go to: http://www.arizonamainstreamproject.org/#q=Seminars-18

or send payment to:

Arizona Mainstream Project
15029 N. Thompson Peak Parkway
Suite B-111 Box 589
Scottsdale, AZ 85260

This panel discussion will be STREAMED LIVE from AMP’s website.

A “Live Stream” button will be available on our homepage www.ArizonaMainstreamProject.org on the day of the event.  Follow the instructions to access the live video stream.

Contact: Honey Marques, Executive Director, at 808-283-3661 or honey@arizonamainstreamproject.org

Arizona Mainstream Project is a 501 (c) 3 non-profit charitable grassroots organization whose mission is to attract, educate, and mobilize the people of Arizona around America’s founding principles and leadership. AMP believes in the principles of a constitutionally limited government, free markets, fiscal responsibility, and individual liberty to promote the common good and prosperity for the people of Arizona.

Wisconsin Governor Scott Walker Speech at 2011 Goldwater Institute Dinner

Wisconsin Governor Scott Walker recently spoke at the 2011 Goldwater Institute Dinner. Here is his speech including an introduction by former Congressman John Shadegg.

U.S. Supreme Court Strikes Down Arizona’s “Clean Elections” Act

FOR IMMEDIATE RELEASE: June 27, 2011
CONTACT: Christina Walsh

Court Protects Free Speech and Political Participation

Arlington, Va.—In a victory for free speech and political participation, today the U.S. Supreme Court ruled that the “matching funds” provision of Arizona’s so-called “Clean Elections” Act is unconstitutional. The landmark case is Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, argued by the Institute for Justice. Both IJ and the Goldwater Institute had challenged Arizona’s law in court.

“This case is a clear reminder to government officials that they may not coerce speakers to limit their own speech,” said Bill Maurer, an attorney with the Institute for Justice, who argued the case. “The Court’s decision today, like other recent decisions, makes clear that the First Amendment is not an exception to campaign finance laws; it is the rule.”

Maurer said, “As a result of today’s ruling, government can no longer use public funds to manipulate speech in campaigns to favor government-funded political candidates and turn the speech of traditionally funded candidates into the vehicle by which their entire political goals are undermined.”

Arizona’s “Clean Elections” Act manipulated election speech by favoring candidates who participated in the public funding system over those who chose to forego taxpayer dollars and instead raised funds through voluntary contributions. For every dollar a privately funded candidate spent above a government-dictated amount, the government gave additional funds to his opponent. The Act even matched funds spent by independent groups that supported privately funded candidates, thereby canceling out those independent groups’ speech.

According to the Court, “The direct result of the speech of privately financed candidates and independent expenditure groups is a state-provided monetary subsidy to a political rival. That cash subsidy, conferred in response to political speech, penalizes speech.”

The Court’s decision followed the reasoning of its 2008 decision in Davis v. FEC, in which it struck down unequal contribution limits for candidates. As the Court said in today’s decision, although the penalty imposed by Arizona’s law is different in some respects from the law in Davis “those differences make the Arizona law more constitutionally problematic, not less.”

For example, Arizona’s law matches not only candidate expenditures, but those of independent expenditure groups, such as the clients represented by the Institute for Justice. As the Court put it “the matching funds provision forces privately funded candidates to fight a political hyrdra of sorts. Each dollar they spend generates two adversarial dollars in response.”

At bottom, the matching funds provision was a bald attempt by the state to manipulate speech by forcing speakers to either trigger matching funds, change their message, or refrain from speaking. According to the Court, “forcing that choice . . . certainly contravenes ‘the fundamental rule of protection under the First Amendment, that a speaker has the autonomy to choose the content of his own message.’”

Moreover, the Court recognized that the end result of the matching funds was the total curtailment of political speech, for “If the matching funds provision achieves its professed goal and causes candidates to switch to public financing, . . . there will be less speech: no spending above the initial state-set amount by formerly privately financed candidates, and no associated matching funds for anyone. Not only that, the level of speech will depend on the State’s judgment of the desirable amount, an amount tethered to available (and often scarce) state resources.”

But as the Court strongly reiterated today, “the whole point of the First Amendment is to protect speakers against unjustified restrictions on speech, even when those restrictions reflect the will of the majority. When it comes to protected speech, the speaker is sovereign.”

In finding that matching funds substantially burden speech, Chief Justice Roberts pointed to research by University of Rochester political scientist David Primo, an expert in the case. Contrary to claims of Clean Elections’ backers, Dr. Primo’s original research “found that privately financed candidates facing the prospect of triggering matching funds changed the timing of their fundraising activities, the timing of their expenditures, and, thus, their overall campaign strategy” to avoid sending additional funds to opponents. The research is available at www.ij.org/images/pdf_folder/first_amendment/az_campaign_finance/expert-report-d_primo.pdf.

Today’s ruling is important not just for those states and municipalities that have similar “matching fund” systems. As Maurer explains, “The decision prohibits government from attempting to level the playing field among political speakers by creating disincentives for some and incentives for others. The clear message of the First Amendment to government is: Hands off!”

Although today’s ruling affects only the matching funds provision of the Clean Elections Act, there is a measure on the November 2012 Arizona ballot that would end the whole Clean Elections system by forbidding government support of candidate campaigns.

The Institute for Justice has litigated against this unconstitutional provision since 2004. IJ represents independent political groups the Arizona Free Enterprise Club’s Freedom Club PAC and the Arizona Taxpayers Action Committee as well as political candidates Senator Rick Murphy and former State Treasurer Dean Martin.

“Now that matching funds are no more, we do not have to censor our own speech,” said Steve Voeller of the Arizona Free Enterprise Club’s Freedom Club PAC. “As long as this law was in place, we knew that that speaking out in the election meant that our political opponents would be showered with government money. The more we spoke, the more politicians we opposed benefitted. Now we can actually speak freely.”

Shane Wikfors of the Arizona Taxpayers Action Committee said, “We have always believed that this law was meant to corral not only candidates but also voters by limiting political speech, intimidating organizations like ours and ultimately leading to a political outcome that was tainted by the state’s involvement. We are grateful that the Court protected political expression and struck down this unconstitutional state intervention.”

Rick Murphy said, “I’m grateful a majority of the justices recognized that the government shouldn’t try to ‘level the playing field’ of free speech with public money.”

Dean Martin said, “After nearly a decade, justice has prevailed. Now I am looking forward to November 2012, when the voters have a chance to get rid of the rest of taxpayer money that support politicians.”

Many observers anticipated the Court would strike down the matching funds program. IJ-Arizona Staff Attorney Paul Avelar explained, “It was pretty clear that matching funds violate the First Amendment rights of candidates, citizens and independent groups. The Ninth Circuit’s decision, now overturned, was so inconsistent with protections for free speech in campaigns that two other federal appellate courts almost immediately refused to follow it. In those cases, the courts struck down matching funds systems in Connecticut and Florida.”

“This is yet another example of an important judicial trend the Institute for Justice has advocated since our founding—that of judicial engagement,” said Institute for Justice President and General Counsel Chip Mellor. “The Court looked beyond the state’s claims about Clean Elections to its substance. It recognized that the real purpose of the law was not to eliminate corruption, but to level the playing field by manipulating speech. In the past, the courts have all too often rubberstamped the government’s claims about corruption in elections and upheld campaign finance laws that violated First Amendment rights. The Court seems to be moving in the other direction in campaign finance, and as a result, we are all freer.”

Arizona Free Enterprise Club’s Freedom Club PAC is just one of several challenges the Institute for Justice is litigating against restrictions on free speech by campaign finance laws. Mellor promised that “IJ will continue to fight against laws that reduce speech, silence disfavored speakers and viewpoints, and allow government to manipulate the marketplace of ideas thereby stripping away people’s right to govern themselves.”

Social science research shows that the purported benefits of public funding programs rarely materialize, while the costs to candidates and independent groups are real. Dr. Primo summed up the findings of the best available research in a paper for the Institute for Justice (available at http://www.ij.org/about/3466), and concluded, “Public funding is a program that promises much and delivers little.”

IJ recently won a landmark victory for free speech in federal court on behalf of SpeechNow.org, an independent group that opposes or supports candidates on the basis of their stance on free speech. IJ also won on behalf of a group of neighbors who were prosecuted by their political opponents under Colorado’s byzantine campaign finance laws merely for speaking out against the annexation of their neighborhood to a nearby town. In addition, IJ won recent victories for free speech in Florida when a federal judge struck down the state’s broadest-in-the-nation “electioneering communications” law and in Washington when it stopped an attempt to use the state’s campaign finance laws to regulate talk-radio commentary about a ballot issue.

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Arizona Free Enterprise Club
Arizona Taxpayers Action Committee
Institute for Justice – Arizona Chapter
Goldwater Institute

 

Clint Bolick on Freedom Watch

Goldwater Institute litigation director Clint Bolick joined Judge Andrew Napolitano on Fox Business Network’s Freedom Watch to discuss his new book Death Grip, about the need for more economic liberty.