Goldwater Goes to the AZ Supreme Court—Twice

December 10, 2020

This week, the Goldwater Institute stood up for Arizona taxpayers in front of the Arizona Supreme Court—not once, but twice.

On Tuesday, the court heard argument in our case challenging the constitutionality of subsidies that the city of Peoria gave to a private university. Although the Arizona Constitution’s “Gift Clause” prohibits government from giving or lending money to private businesses, city officials gave $2.6 million of taxpayer money to two private companies: Huntington University and its landlord Arrowhead Properties LLC, in exchange for nothing more than the agreement to run their own private businesses. What’s the difference between that and giving taxpayer money to McDonald’s to sell hamburgers or Starbucks to sell coffee? None—they’re private companies and should be run with private money. That, at least, is what the Arizona Constitution requires. You can read more about that case, Schires v. City of Peoria, here, and you can watch the oral argument here.

Then on Thursday, we were back before the court challenging Pinal County’s illegal tax on retail sales known as Proposition 417. Although state law specifies how counties are supposed to adopt taxes to fix roads, officials with the Pinal Regional Transportation Agency decided to do it a different way—imposing the tax specifically on retail sales (which is not allowed) and then dividing up the tax so that it applies to the first $10,000 of a purchase but not at amounts above that. In other words, buy two $5,000 industrial air conditioners and the tax applies. Buy one $15,000 piece of farm equipment, and you get a discount. State law doesn’t allow that—that would create a labyrinth of different tax rules in Arizona’s 15 counties—which is why the state Department of Revenue agrees with us that the county broke the law. You can read more about that case, Vangilder v. Arizona Department of Revenue, here, and you can watch the oral argument here.

This week’s oral arguments are just the latest examples of how the Goldwater Institute is working to protect taxpayers’ rights. In several states, Goldwater is challenging the practice of release time, by which government employees are “released” from the jobs they were hired to do and instead work full-time for their respective unions, while still receiving their full salary and benefits paid for by taxpayers. And in our home city of Phoenix, we’ve challenged the city’s awarding of sweetheart deals to private developers the city favors. This violates the state’s Constitution, which says that public resources must be utilized for public purposes, not to disproportionately enrich private, special interests.