Goldwater Institute

The federal health care law included a provision asking all states to expand their Medicaid programs to cover all adults and children up to 133% of the federal poverty level. Right now, a little less than a fifth of the state’s population is given free healthcare through Medicaid; if the state expands Medicaid nearly a fourth of Arizona’s population would be covered.

This expansion would cost a lot of money we don’t have. Even with the federal government picking up most of the tab, estimates put the cost of expansion for Arizona at $125 million in 2016 alone. The yearly cost would rise as the federal share of the cost ratchets down to 90 percent. As the federal government’s financial condition worsens, states will likely have to pick up even more of the cost.

Governor Brewer wants a “circuit breaker” that will turn off the expanded program if the federal share ever fell below 80 percent. While the Supreme Court said states can’t be compelled to expand Medicaid, it’s an open question whether they can be compelled to continue an expansion once agreed to. If, in the future, the federal government insists that we keep expanded Medicaid coverage as a condition of keeping any Medicaid funds, we cannot count on our own state leaders to challenge that in court. After all, the Obama administration takes the position that Obamacare’s expanded coverage of children is a valid mandate, in clear contradiction to the Supreme Court’s decision. Still, state policymakers are doing nothing to challenge this position.

But there’s more at stake than dollars and cents. Expanding Medicaid means the state will participate in enforcing the health insurance mandate. After all, everybody is required to have health insurance, including Medicaid recipients, and the state will be put in a position of reporting when recipients drop off the Medicaid rolls. Legislators who value fiscal prudence, the health of the state’s future economy, and individual liberty should not support the expansion of Medicaid.

Learn more:

The Hill: White House drops support for major Medicaid cut

The Advisory Board Company: Where each state stands on ACA's Medicaid Expansion

Forbes: Why States Have a Huge Fiscal Incentive to Opt Out of Obamacare's Medicaid Expansion

Secret government union collective bargaining is the law in eleven states, including Alaska, Connecticut, Illinois, Iowa, Kentucky, Maine, Nevada, New Hampshire, New Jersey, New Mexico, and Wisconsin. In Arizona, at least eight major cities keep collective bargaining with government unions in the dark. The secrecy imposed by towns like Avondale, Chandler and Maricopa even expressly prohibits any city employee from sharing records of negotiations with the news media and their own city council members.

Why does this matter? First, elected officials and the public cannot meaningfully check and balance collective bargaining negotiations when the law keeps them blind, deaf and dumb during the process. Second, when secrecy in negotiations is combined with laws forcing Arizona cities to engage in collective bargaining—called “meet and confer” in Arizona—unions can exert tremendous political pressure on government officials; and both unions and government officials are able to hide from any meaningful oversight.

That leverage has a price. The Bureau of Labor Statistics has most recently reported that state and local government employees make nearly 43 percent more per hour on average in total compensation than private sector workers. Even when controlling for similar occupations and skills, a study commissioned by Citizens Against Government Waste found that Arizona pays its employees nearly 20 percent more per hour on average than comparable private sector employees.

The presence of government unions and the strength of collective bargaining laws explain a large portion of the pay gap observed between state and local government employees and private sector employees. Arizona could save $550 million every year in excessive pay to public employees simply by banning government union collective bargaining. But the next best reform is to shine a light on the backroom deal making.

Arizona lawmakers will have the opportunity to do just that this legislative session. Rep. Steve Montenegro has introduced a bill to make collective bargaining negotiations subject to open meetings and public records law. This is a terrific government transparency reform. Here’s hoping he’s successful.

Learn more:

Goldwater Institute: Airing Out the Smoke-filled Rooms: Bringing Transparency to Public Union Collective Bargaining

Goldwater Institute: Save Taxpayers Tens of Billions of Dollars: End Government-Sector Collective Bargaining

Bureau of Labor Statistics: Employer Costs for Employee Compensation

Citizens Against Government Waste: Public Servants or Privileged Class

After years of pursuing a command-and-control approach to energy regulation and providing massive corporate welfare to the solar industry, the Arizona Corporation Commission has signaled a possible shift in approach.

In his first comments as the ACC’s new chairman, Bob Stump promised to champion “the cleanest AND most affordable forms of energy.” Renewable energy is clean—though it often uses copious amounts of water, a rather scarce commodity in these parts—it is emphatically not cheap.

“I refuse to bet on, or chearlead for, any one form of technology,” Stump declared, saying that he chooses instead “to pursue a path in which adequate, reliable service is ensured and rates are just and reasonable.”

This is particularly refreshing in light of past ACC decrees. The Commission’s renewable energy standards mandate that 15 percent of all energy come from prescribed renewable sources, with every penny of added costs tacked onto utility bills as surcharges. Add to that a plethora of solar subsidies granted by both the state and the Commission, and we are awash in high-cost energy.

Energy sources should be prescribed by the market laws of supply and demand, not by government dictate. Chairman Stump holds that out as a possibility. “We should examine carefully how other states have fared under retail competition,” Stump remarked, “and ponder whether the time is right for Arizona to ponder a similar path.”

It is. With taxes and healthcare costs rising and the economy still in a slump, Arizona should lead the way in allowing all forms of energy to compete, rather than favoring one particular type of energy with cost as no object. The solar industry competes especially well in the political arena. Let them compete as well in the energy market—and may the best and most efficient form of energy prevail.

Learn more:

Goldwater Institute: Put energy policymaking decisions back where they belong

Did you know that you may be able to use IRA funds to make a tax-free gift to the Goldwater Institute? If you’re over 70 ½ years old, you are eligible to donate up to $100,000 from your IRA tax-free! If you donate by January 31, 2013, your contribution can be reported as part of your 2012 IRA distribution without being taxed! For more information, call Le Templar at the Goldwater Institute at (602) 633-8974.