Christmas is a time for giving. Unfortunately, some government officials believe that means they can hand out public tax dollars to special interests at year’s end. That needs to stop.
Earlier this year, the Goldwater Institute raised concerns that the city of Phoenix illegally spent millions of dollars to subsidize a number of private organizations, some of which promote controversial and ideological causes. Several city departments treated budget categories like “Sponsorships,” “Miscellaneous,” “Grants and Subsidies,” and “Emerg[ency] Assist[ance]” as slush funds for preferred groups. Arizona Attorney General Kris Mayes’ investigation into those payments is ongoing more than seven months after Goldwater submitted a formal complaint.
So, what does Christmas have to do with it?
In July, Goldwater sent a follow-up letter to the attorney general highlighting several specific organizations and expenditures that likely violated Arizona law. One of these flagged expenditures raises eyebrows not only due to its amount and budget category, but also for its timing.
On Christmas Eve last year, the city’s Office of Arts and Culture sent $24,815.64 to the Sagrado art gallery in South Phoenix as an “Emerg[ency] Assist[ance]” payment.
Why did the city send nearly $25,000 in taxpayer dollars to a private art gallery without consulting the Phoenix City Council? Why did the Sagrado need emergency assistance on Christmas Eve? And why should taxpayers be on the hook for it?
Most of the answers remain unclear. What we do know is that in 2023, the city began allowing its departments to spend up to $32,000 at a time without seeking council approval. That’s nearly four times the previous limit of $8,600.
We also know that year-end spending sprees are not a problem unique to Phoenix.
For example, our friends at Open The Books have long documented the problem of “Use-It-Or-Lose-It” spending sprees that occur at the federal level at the end of the federal fiscal year in September. That recurring problem has led Open The Books to declare that “Christmas comes in September, not December, for federal contractors.”
Similarly, the Arizona Commerce Authority, which administers a film subsidy program being challenged by the Goldwater Institute, approved more than $750,000 in refundable tax credits during the final three weeks of 2024, more than 83% of the total amount approved for that entire year.
And just last week, the Governor of Wyoming and the Wyoming Energy Authority announced a $100 million “award” (i.e. taxpayer-funded subsidy) for a new nuclear facility, arguing in a public statement that such handouts “are not about government picking winners,” even though that’s exactly what these types of expenditures do.
Not only is government picking winners and losers when it gives tax dollars to private organizations wrapped in ribbons and bows—it’s doing so with your money.
Renowned economist and Nobel laureate Milton Friedman explained that one problem with public officials spending tax dollars on various projects and causes arises from the fact that when spending someone else’s money, concerns about cost are diminished. And when money is spent on someone else, rather than on oneself, less care is taken as to the quality of goods and services. That’s one reason why government spending at most levels is so out of control, and why the public is generally dissatisfied with the results.
Generosity and philanthropy—especially at year’s end—are best accomplished by private individuals and organizations, not bureaucrats and politicians. Government entities everywhere should refrain from burning through piles of public cash during the holiday season on pet projects or causes, however deserving they might seem. That’s as true for art galleries and film production as it is for nuclear facilities and other private projects.
The Goldwater Institute will continue to fight these and other abuses of taxpayer money across the country. Maybe next year, tax dollars won’t be given to special interests.
Parker Jackson is a Staff Attorney at the Goldwater Institute.
