Stopping a giveaway of taxpayer dollars in Phoenix

by Kileen Lindgren
September 20, 2018

Most people complain about paying taxes, but few people pay attention to what the government does with those taxes—with their money.  In America, government is supposed to be of, by, and for the people.  Therefore, any money in the government’s possession is the people’s money.  But, if the people don’t pay attention to where their money goes, the government overspends, wastes, and even gives it away.

For years, the Goldwater Institute has been at the forefront of protecting taxpayer dollars from things like stadium subsidies to union release time. The American Freedom Network—the Institute’s pro-bono, nationwide team of attorneys—is playing an integral role in moving this forward.

In Phoenix, the city’s latest illegal attempt to give away taxpayer dollars has drawn a response from Network attorney members at local firm Wilenchik & Bartness PC—who have sent a letter to the city demanding that it stop making deals with private entities in violation of the state’s gift clause.

In this egregious government giveaway, the city of Phoenix entered into an agreement with Trellis, a private developer, allowing it to buy ten city-owned lots for $50,000—even though these lots had been independently appraised at $668,000. That’s approximately a 92-percent discount. The city has justified this gift by claiming that things like “affordable” housing, aesthetics, and temporary construction jobs are compensation enough for the taxpayer-owned property. On top of that, Phoenix defines the low-income threshold for the affordable housing as $83,000 a year—hardly indigent.

“This is a plain violation of Arizona’s gift clause, which forbids government from giving public money to private parties unless the expenditures are for public purposes and taxpayers receive adequate value in return,” said Network attorney Dennis Wilenchik. “The city shouldn’t pick and choose favorites to receive your tax dollars.” According to the appraisal report commissioned by the city, each property is worth more than what the city is selling all ten of them for.”

In response, Wilenchik and some colleagues have sent a letter to the city of Phoenix seeking an immediate end to this agreement. “We’re asking the Phoenix City Council to terminate this deal and to not enter into such agreements in the future,” he said.

“We hope that this letter sent to the city of Phoenix will result in the end of deals that rob from taxpayers to benefit private, special interests,” said Jon Riches, director of national litigation for the Goldwater Institute. “Standing up on behalf of individual rights is at the core of the American Freedom Network’s mission, and we will continue to work with attorneys from around the country to fight the government overreach that puts these rights in jeopardy.”

Read the full demand letter here. Know of a gift clause violation in your city or state? Contact Kileen Lindgren at klindgren@goldwaterinstitute.org to discuss.

Kileen Lindgren is the Legal Programs Coordinator for the Goldwater Institute.