Goldwater Institute

Last week, the Arizona House Judiciary Committee passed HB 2156, which would stop state and local governments from campaigning with taxpayer dollars. In Arizona, this practice is already supposed to be unlawful – state laws say that cities, counties, and schools can’t use public “resources” to “influenc[e] the outcomes of elections.” Unfortunately, courts have essentially read these laws to prohibit only electioneering that “unambiguously” urges a “yes” or “no” vote. As a result, government bodies often skirt the law and use public resources to broadcast one-sided messages about ballot measures.

Worse, many of these laws are virtually unenforceable against offending governments, because in many cases only the attorney general or county attorney may prosecute violations. And while school district officials can be held personally liable if they misuse public money, the law says nothing about penalties for city, county, or state officials. Most government officials who campaign with public resources have nothing to lose, so the laws provide little protection for taxpayers.

HB 2156 requires government bodies to be truly neutral with taxpayer dollars. Government may inform the public on ballot issues, but publicly sponsored forums or events must be purely educational, with an equal opportunity for the presentation of all viewpoints. The bill creates one consolidated ban that applies to all public entities and all public resources, which is the law in about a third of other states. And if HB 2156 becomes law, it will enable taxpayers to bring enforcement lawsuits when government officials campaign with public resources.

Taxpayers have urged public officials to stop campaigning with their money, but urging only goes so far. It’s time for state legislators to close the loopholes on public-resource electioneering bans.

Learn more:

Arizona State Legislature: HB 2156

Goldwater Institute: District needs schooling in election law

Arizona Republic: School projects to be built with $118M bond doubted

On Monday, Gov. Brewer released a legislative proposal to reform the state’s cumbersome and complex transaction privilege tax, commonly known as the sales tax. The plan is based on the recommendations of the governor’s Transaction Privilege Tax Simplification Task Force, convened last summer, which spent nearly six months looking to other states, hearing public comments, and receiving input from cities, towns, and state policymakers.

The plan is rightly aimed at Arizona’s long-term ability to compete economically with other states by targeting three main elements of the sales tax system:

1.) Stop multiple audits. Many cities have the ability to audit a business even if the state already has audited them on the same set of transactions. This incentive for multiple audits needs to stop, and this plan would institute a “single audit” requirement that would put Arizona on par with many states that don’t allow multiple audits.

2.) Standardize the collections of sales taxes. This reform would make the Arizona Department of Revenue the only collector of sales tax revenue in the state. This would free up resources at the local level and would eliminate confusion from businesses that are currently forced to deal with multiple tax collection bureaucracies.

3.) Goods will be taxed at the point-of-sale. The present system maintains a “prime contractor” category that requires construction companies to pay taxes to multiple jurisdictions when they buy their supplies in one tax jurisdiction but the job site is in other. The proposal eliminates that category and treats contractors like any other business and taxes their supply purchases at the point of sale.

Arizona is behind the curve on making our sales tax system simpler and saner. Getting us up to snuff with forty-six other states will finally clear a path for Arizona policymakers to enact the sorts of big-picture tax reform that can finally put us ahead of our competitor states on tax policy. Governor Brewer’s plan is a vital first-step in that very important direction and should be supported as proposed.

Learn more:

Office of Governor Brewer: Transaction Privilege Tax Simplification Task Force Final Report

Arizona State Legislature: Governor Brewer’s Proposal

Goldwater Institute: A New Tax Plan for a New Economy

Last week the Arizona Republic criticized SB 1285 and bill sponsor Sen. Kelli Ward for wanting to “reduce already-scarce resources for teaching poor kids to ensure parents know they can enroll their children in private schools.”

The bill would require the Arizona Department of Education to create a how-to guide for families on how to choose the best education for their child, either through open enrollment (another name for choosing a public school outside your home district), a public charter school, an education savings account, homeschooling, a virtual school, or a private school scholarship.

The Republic claims the estimated $1.5 million that would go to creating the handbook should be saved by taxpayers and used at public schools.

This analysis is backwards, and off by about $410 million.

In fact, school choice programs save the state money in a big way. Charter schools save the taxpayer $1,578 per child because charter schools receive less funding per student than traditional schools. With 142,386 charter school students, that means charters save the state $225 million each year over traditional schools.

In addition, the state’s innovative education savings accounts are funded at 90 percent of the state portion of student funding. With 302 savings account students and an average account of $13,600 (all current students are students with special needs), this program saves the state $500,000.

But wait, there’s more.

The Republic’s own analysis of Arizona’s private school scholarships funded by tax credit donations found that these scholarships saved the state $8.3 million over nine years, while a Baylor University professor puts the savings anywhere from $44 million to $186 million annually.

For those of you keeping score, that means, at a minimum, charter schools, education savings accounts, and private school scholarships save the state $226.5 million each year. At the top end, based on these figures, the state saves $411.5 million per year.

Yet the paper is grousing about $1.5 million to help parents find the best school for their child? We should make sure children get a great education—at their local school, another school across town, through an education savings account—whatever it takes. Letting parents know they have options is a critical first step.

Learn more:

Goldwater Institute: Education Savings Accounts: Questions and Answers

Goldwater Institute: Tax Credit Scholarships: Questions and Answers

Arizona Legislature: SB1285

Arizona Republic: Keep resources in needy schools

Arizona Republic: Professor puts savings for state at up to $186 million

East Valley Tribune: Program for special needs students expected to double

Representative Adam Kwasman is leading the charge in the Arizona House to pass the Compact for America (“HB2328”). HB2328 proposes an agreement among the states that would advance a powerful balanced budget amendment for the federal government. At its core, HB2328 requires state legislative approval for any increase in the federal debt. Some have expressed opposition to this concept because they are concerned about the lack of an explicit exemption to finance wars. The Compact for America furnishes plenty of flexibility to finance truly necessary wars—without allowing Washington to write itself a blank check.

Should this balanced budget amendment become part of the U.S. Constitution, all it would take is Congress to persuade 26 state legislatures to lift an initial debt limit. This role for the states is nothing new. It is essentially the same role state legislatures had before the 17th Amendment removed them from the role of appointing U.S. Senators. When state legislatures controlled the U.S. Senate by proxy that meant declarations of war, war spending, and the financing of wars—as well as all other federal policies—essentially required the concurrence of a majority of state legislatures.

By requiring state approval for an increase in the federal debt, the Compact for America returns to the states a modest portion of the same authority they had to influence federal policies under the Constitution’s original design. Based on the fact that numerous wars were authorized and financed when state legislatures controlled the U.S. Senate by proxy, there should be no concern about this restoration of power to state legislatures overly restricting the financing of wars. And with modern technology, the physical distance between state legislatures and the halls of Congress no longer justifies sending proxies to Washington, D.C.

Of course, the fundamental problem with writing a “war exception” into any balanced budget amendment is that the temptation to interpret the exception to allow for needless borrowing is just too great for Washington. It is like telling an alcoholic to avoid liquor–except for medicinal purposes. While not perfect, state legislatures are closer to the American people and less likely to be driven by a narrow agenda to abuse the power to incur debt—or to instigate unjustifiable wars. For this reason, HB2328 rightly puts state legislatures in the position of determining the legitimacy of any request to lift the federal debt limit.

Learn more:

Compact for America: Get Educated

Arizona State Legislature: HB2328

Maricopa Monitor: Kwasman's bill part of nat'l try for constitutional amendment