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Peoria calls a bully's bluff

November 5, 2014

With government at all levels routinely violating its own laws, it is a joy to write about one that is doing the right thing.

When developers approached Peoria, Ariz. about building a regional medical center, city officials were delighted—until the developers demanded a subsidy, initially a waiver and eventually a deferral of $1.2 million in fees and taxes.

No can do, the city responded, citing the Arizona Supreme Court’s “CityNorth” ruling that forbids tax-supported benefits to private entities unless tangible and roughly proportionate benefits are provided in turn. Vague promises of jobs and community benefits, which often fail to materialize, simply don’t suffice.

The developer was furious: “All we got from the city was ‘we can’t, we don’t, CityNorth won’t allow us’,” complained David Wanger, CEO of Peoria Regional Medical Center. In an angry letter, Mr. Wanger declared that he “will make a business decision to continue to pursue the Peoria site, but will do so with no assistance from the City of Peoria.”

Imagine that. A city abiding by its constitutional limits will end up with a nice new hospital after all; and without a penny from taxpayers, to boot.

If only this outbreak of common sense could pervade the border into Peoria’s next-door neighbor, Glendale. There city officials are scrambling to give $197 million to a Chicago businessman to buy the Phoenix Coyotes. The National Hockey League swore it would yank the team if the deal didn’t go through by February—or March, or April, or maybe after the playoffs. Now it’s sometime next year.

These stories offer a lesson for local governments everywhere: sometimes bullies bluff.

Our state constitution’s Gift Clause exists to help government officials do the right thing, and to hold them to account when they don’t.

Clint Bolick is director of the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation.

Learn More:

Goldwater Institute: Turken v. Gordon (CityNorth subsidy case)

Arizona Republic: Peoria response to hospital’s request for funds irks officials

Washington Post: George Will: An Arizona city’s sports mania encounters a hard check



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