Blog

In Arizona, A Tyranny of the Not-So-Super-Majority

bwilson — Wed, 26 Mar 2014 18:26:16 +0000

In Arizona, A Tyranny of the Not-So-Super-Majority

March 26, 2014 | By Christina Sandefur | email

Today, 36 legislators, their constituents, and a state taxpayer are asking the Arizona Court of Appeals to hear an accelerated appeal of a critical lawsuit that will have a significant impact on both the state budget and the integrity of the legislative process.

Recently, a lower court judge dealt an unfortunate blow to a significant state constitutional protection, ruling that the legislators who voted against a new tax to fund Arizona's Medicaid expansion cannot challenge it in court, even though their votes were sufficient to defeat the tax.

Over 20 years ago, Arizona voters enacted a constitutional protection known as Prop 108, which empowered a minority of legislators to block any "act that provides for a net increase in state revenues." In other words, enacting or increasing a tax or fee requires a two-thirds support in both houses of the legislature. The Medicaid tax became law with the approval of only a simple majority, nullifying the votes of those legislators who opposed it.

But when those legislators tried to defend their votes – and the system the voters put into place – they were turned away at the courthouse doors. Dismissing their lawsuit without deciding whether the Medicaid tax violates Prop 108, the Court instead ruled that the legislature itself gets to decide whether a tax should be subject to the Constitution. That can't be right.

When the voters enacted a supermajority requirement to "take back control from a run-away tax and spend state legislature," they couldn't have intended that it would apply only if that state legislature – by a simple majority – chose to comply!

If a bare legislative majority can disregard a constitutional provision designed to limit majority power, what effects will this have on budget measures, the legislative process, and the power of voters to curb government power? For now, the answers are unclear.

Whether it was wise to dramatically transform Arizona's Medicaid program is a policy question that is properly left to the political process. But that process must operate within the confines of the Constitution.

STAY CONNECTED

Christina Sandefur is an attorney at the Goldwater Institute

LEARN MORE

Biggs v. Brewer

Robert Robb, AZ Republic: Medicaid expansion enters legal chaos zone

Editorial: The real "sore losers" in Medicaid tax case

Mediocre may be closer than it appears

bwilson — Tue, 25 Mar 2014 16:15:01 +0000

Mediocre may be closer than it appears

March 25, 2014 | By Jonathan Butcher | email

When driving, if you look in your side-view mirror, you’re reminded that “objects in mirror are closer than they appear.” In Arizona, lawmakers, parents, and schools are struggling to gauge how close we are to high achievement levels in our state.

Since 2011, more and more schools earned higher scores on the state’s A-F report cards. Nearly 63 percent of schools in the state earned an A or a B on the most recent ratings. This might mean that the low performance we fear for students is quietly slipping behind us.

Or that Arizona has taken an exit off of the highway.

Last November, research from the Arizona Board of Regents revealed that half of Arizona’s high schools only had 5 percent or fewer of their graduates earn bachelor’s degrees within 6 years (the national average is 60 percent). Just 40 of the state’s high schools accounted for 62 percent of all of the Arizona high school graduates that finished college around the country.

Combining the Regents’ data with the A-F grades reveals that 3 out of 4 graduates from A-rated high schools—the best public schools Arizona has to offer according to the state report card system—did not finish college at a 4-year institution within 6 years after enrolling in college.

The Arizona Department of Education is now revising the A-F school grading scale in preparation for the switch to a new test aligned with the national Common Core academic standards. Parents, students, and schools need clear indicators about what high achievement looks like, even if that means revisions to the current formula to bring some schools back down to earth.

Grading schools with letter grades is a simple, direct way to help parents find a great school for their children—but only if the grades represent success.

STAY CONNECTED

Jonathan Butcher is the education director for the Goldwater Institute

LEARN MORE

The Goldwater Institute: A Vision for Education and the Future of Learning

The Arizona Republic: Arizona schools: Slight uptick in test scores, grades

The Arizona Republic: State’s high schools show huge disparity in college grad rates

National Center for Education Statistics: Fast Facts: Graduation Rates

When driving, if you look in your side-view mirror, you’re reminded that “objects in mirror are closer than they appear.” In Arizona, despite what state results show for our public schools, mediocrity may be closer than it appears.Tuesday, March 25, 2014 - 09:13NoEducation Reform BlogYesBy TopicsJonathan Butcher

The States Didn’t Start the Fire Sale—But They Can Put It Out.

bwilson — Tue, 18 Mar 2014 19:04:56 +0000

The States Didn’t Start the Fire Sale—But They Can Put It Out.

March 18, 2014 | By Nick Dranias | email

The writing is on the wall for Washington’s unsustainable debt-fueled fiscal policy. Just last week, the Telegraph reported that central banks commenced a worldwide “fire sale” of $106 billion in U.S. Treasuries. And yet, there is no leadership from the beltway to fix the national debt. Instead, last month, the federal statutory debt limit was suspended yet again.

That’s why the states must douse the flames of fiscal irresponsibility in Washington by joining the Compact for a Balanced Budget. Fortunately, Georgia, Alaska and Arizona are already sliding down the fire pole. In fact, Georgia’s Senate will be debating and voting on the Compact on the floor this week. Alaska’s House has moved the Compact through their subcommittees and it’s poised for the full floor. The Arizona House already passed sister legislation, and the bill was assigned to the Government, Judiciary and Rules Committees in the Senate.

Any day now, Georgia, Alaska or Arizona could become the founding member state of the Compact for a Balanced Budget.

Far from a mere “letter to Congress,” the Compact would create an institutional commitment to fiscal responsibility. Once two states join, the Compact will form a commission among the founding and future member states. Rather than jawboning and grandstanding the federal government’s national debt addiction, the Compact Commission will have a goal and a deadline—to organize and bind together thirty-eight states to advance and ratify a powerful Balanced Budget Amendment in seven years or less.

In short, the Compact for a Balanced Budget will create a persistent platform dedicated to extinguishing the debt profligacy of the federal government.

With leadership from Georgia, Alaska and Arizona, power politics in Washington could change forever.

STAY CONNECTED

Nick Dranias is Director of Policy Development and Constitutional Government for the Goldwater Institute.

LEARN MORE

Fire Sale of US Treasuries is a warning of acute stress around the world

Compact for a Balanced Budget

Education savings accounts and The Magnolia State

bwilson — Fri, 14 Mar 2014 21:13:34 +0000

Education savings accounts and The Magnolia State

March 14, 2014 | By Jonathan Butcher | email

Remember when you finished high school? The sheepskin you received at graduation was your ticket to either a job or college. Wherever you were going, that accomplishment would follow you and help you get started in adulthood.

For Nikki Mclendon, though, her diploma wasn’t what she thought it was, reported The Hechinger Report earlier this year. Nikki finished high school in Mississippi with an occupational diploma, having struggled with her final exams. She was diagnosed with special needs in elementary school but did not take separate classes for students with special needs. Still, based on this earlier diagnosis and the courses she had completed, she qualified for an alternate certificate.

In Mississippi last year, only 23 percent of special education students received a traditional diploma. For students like Nikki, however, most universities and many employers do not recognize their certificate of completion they receive after graduating.

“What happened to Nikki Mclendon is emblematic of a larger problem in Mississippi, where students are much less likely to graduate with a regular diploma after they are classified with a disability,” reported Hechinger, citing a series of articles from Mississippi’s Clarion-Ledger that described the limited opportunities for students with these certificates.

Education savings accounts are designed to give children like Nikki hope for the future—and the accounts may yet become a reality for Mississippi students. On Wednesday, the state senate voted in favor of the accounts, a critical step in the process of giving these students better opportunities to succeed. Similar to Arizona's education savings accounts, parents would have the flexibility to use an account to pay for education therapy, online classes, and private school tuition, to name a few. This would have helped Nikki find a personal tutor and get extra help before the exams became a problem.

Mississippi is one of a dozen states where parents and lawmakers have made inroads for education savings accounts in recent years.

The accounts’ significance is not lost on parents. Mandy Rogers, parent and advocate for students with special needs, wrote in the Clarion-Ledger, "As the parent of two children who received special education services, I know how meaningful the Equal Opportunity for All Students with Special Needs Act would be...countless more Mississippi parents are desperate to give their children a quality education."

STAY CONNECTED

Jonathan Butcher is education director for the Goldwater Institute.

LEARN MORE

Fox News: Unions on edge as Arizona Lawmakers weigh major expansion of education overhaul

The Clarion-Ledger: Parents with special needs need choices

The Hechinger Report: For special education students, diplomas, jobs, increasingly elusive

Get the federal government out of the business of setting the minimum wage for all the states

bwilson — Tue, 11 Mar 2014 22:24:22 +0000

Get the federal government out of the business of setting the minimum wage for all the states

March 11, 2014 | By Stephen Slivinski | email

Once again the president is proposing something that will not generate the job growth that America needs. His latest proposal is to raise the national minimum wage from its current $7.25 an hour to $10.10 – which would likely kill 500,000 jobs, according to the Congressional Budget Office, because it prices low-skilled laborers out of the labor market.

The minimum wage sets a floor for wages across the country, and like so many federal policies it treats all states as if they are the same. Yet no one thinks that a dollar buys the same amount of goods in Massachusetts as it does in Mississippi. Just as changes in the cost of living will be different in each state, changes in wage rates will be different too. But a federal minimum wage assumes that $7.25 (or if the Obama administration gets its way, $10.10) is the magic number that can be applied everywhere.

Nearly twice as many people work at the minimum wage in Mississippi as in Massachusetts even though the latter is a much larger state. Now imagine that the federal minimum wage rate is raised by the same amount for all states. You will see more dramatic economic impacts in the lower-cost-of-living states – many of which are among the poorer states in America – in the wake of a nearly $3 increase in the minimum wage because it's a much bigger hike in buying power than in the high cost-of-living states.

State policymakers and voters are in the best position to make these policy decisions. They already have the ability to raise the minimum wage above the federal minimum. In fact, 21 states and the District of Columbia already have minimum wages above the federal level. (However, none today are as high as Obama's proposed $10.10.) The majority of economic damage of a rise in the minimum wage would occur in a discriminatory fashion, hitting the poorest states the hardest.

The president and the federal government needs to quit trying to force one-size-fits-all "solutions" like this on our unique states. The federal government could help matters by simply allowing states to opt out of the federal minimum wage and set their own – or to allow them to avoid having a minimum wage altogether. Congress could even go so far as to keep a minimum wage target but adjust the minimum wage downward for states that have a lower cost of living or at least grant those states a waiver to do so.

In any case, a policy reform that allows variation between states would allow states to experiment with the best ways to help their poor workers, just as the federal government does in welfare policy as embodied in the federal welfare reform of the 1990s that allowed states to set their own limits on income transfer programs. There's no reason to think it won't help in this policy area, too. In an environment of high unemployment, tying the hands of the states on labor policy is bad economic policy.

STAY CONNECTED

Stephen Slivinski is an economist for the Goldwater Institute.

LEARN MORE

CBO report on the proposed federal minimum wage increase

Americans Must Converge on the Compact for a Balanced Budget

bwilson — Fri, 28 Feb 2014 05:23:32 +0000

Americans Must Converge on the Compact for a Balanced Budget

February 27, 2014 | By Nick Dranias | email

Last week, the Georgia House of Representatives passed the Compact for a Balanced Budget by a margin of 103-63. Alaska and Arizona are now poised to advance the same reform effort through their respective House Judiciary and Rules Committees.

We could be only weeks away from an interstate agreement that will advance a constitutional amendment to limit the federal government’s capacity to borrow.

Why should the American people want to bind the hands of their federal representatives with the chains of the Constitution rather than voting them out or waiting for the next “Clinton-Gingrich” deficit deal? Thomas Jefferson knew the answer to that question fewer than ten years after ratification.

Lamenting the growth of federal functions and spending in 1798, Jefferson wrote:

“I wish it were possible to obtain a single amendment to our constitution; I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its constitution. I mean an additional article taking from the federal government the power of borrowing.”

Jefferson knew that the political cause of the expansion of the federal government beyond its constitutional limits was the illusion of unlimited resources created by unlimited borrowing capacity. He also understood that without his “missing amendment,” there would not be enough of an incentive for most elected officials most of the time to stop borrowing from non-voting future generations.

Without tying the hands of elected officials, an unbound democratic process will inevitably trend towards the undemocratic and lawless outcome of mortgaging the future of future generations. A firm constitutional limit on debt is, therefore, not only required to maintain a republic of limited powers, it is also needed to ensure the democratic process genuinely reflects the will of the majorities—both present and future—who are impacted by governmental decisions. That’s why both Classical Liberals and Progressives of the late 19th Century and early 20th Century—the conservatives and liberals of their day—converged on the same policy solution for the abuse of debt at the state level.

With the gross federal debt exceeding 107% of the gross domestic product, state legislators must likewise set aside their partisan differences and converge on passing the Compact for a Balanced Budget to save our Republic.

Let’s make Thomas Jefferson proud.

STAY CONNECTED

Nick Dranias is a Director of Policy Development and Constitutional Government for the Goldwater Institute.

LEARN MORE

U.S. Debt Clock

NCSL underscoring that 49 states have some kind of balanced budget or debt limit requirement

The Works of Thomas Jefferson, Federal Edition (New York and London, G.P. Putnam’s Sons, 1904-5). Vol. 8

States don’t have to wait for Congress to act on pro-growth tax reform

bwilson — Thu, 20 Feb 2014 20:51:37 +0000

States don’t have to wait for Congress to act on pro-growth tax reform

February 20, 2014 | By Steve Slivinski | email

As 2013 drew to an end, so too did a number of key federal income tax provisions. Many of them were related to lightening the tax burden on businesses, and the ripple effects of these expirations could have real consequences throughout the country.

One of the main expiring federal provisions was the end of a simple and powerful tax reform called “instant expensing,” which previously allowed most businesses to write off up to $500,000 of the investment they make in their company for the year in which they make it.

This allowed the average small- and medium-sized businesses to expense all of the new investment they made each year.

For example, an owner of a small business may need to buy or rent office furniture, buy some new computers (or even some used ones), or invest in manufacturing technologies like a 3-D printer. Under current law, you’d have to write off that investment on your taxes over a long period of time – sometimes too long for you to recoup your investment. Under the instant expensing provisions, however, you would make those investments when it most benefited your business.

Reports across the country have indicated that over the past decade, provisions like instant expensing have led to businesses expanding and hiring more workers. But now that this federal tax law has expired, all businesses in states with expensing provisions tied to the federal tax code have seen it virtually disappear too. Federal lawmakers have yet to renew the now-lapsed provision as they have each year over the past decade, and it’s not clear when – or if – they will.

Luckily, states don’t have to wait for Congress to act. They can simply make this expensing provision – and the economic growth that comes from it – a permanent part of their tax code. All they need to do is embed in state tax law the $500,000 write-off previously prescribed by the IRS. The legislature in Arizona, for instance, is currently considering a tax reform bill that will do exactly that.

Instant expensing has the added advantage of being a tax provision that all businesses can take advantage of, unlike some tax credits that require jumping through government-constructed hoops or still others aimed at subsidizing a favored industry or activity.

This reform is arguably one of the most important supply-side tax reforms that the federal government has enacted since the Reagan administration. Congress isn’t moving to protect those small businesses and workers who benefit. At the moment, it’s up to the states to help safeguard that victory for their residents.

STAY CONNECTED

Steve Slivinski is a senior economist for the Goldwater Institute.

LEARN MORE

Section179.org

Goldwater Institute – Investing in Arizona

Unproven angel investment tax credits up for extension

bwilson — Wed, 19 Feb 2014 22:23:19 +0000

Unproven angel investment tax credits up for extension

February 19, 2014 | By Emily Gersema | email

Arizona is preparing to offer more tax credits to angel investors, although there is no evidence that these credits help the state attract and retain new businesses.

The House Ways and Means Committee voted 4-2 Monday for the House to consider HB 2272, which would add $20 million to the Arizona Commerce Authority program for angel investors who support startups. If approved, it also would delay the program’s 2016 sunset until June 30, 2021.

Arizona has authorized $16.4 million in tax credits since 2006 and has $1.5 million in credits left for “qualified investors.” Arizona law prohibits state officials from identifying investors who claimed the credits.

Scot Mussi, executive director of the Arizona Free Enterprise Club, said the program is problematic for several reasons.

“The problem with what we call the ‘economic development tax credits’ is they don’t lure new business in general. They pick winners and losers through the tax codes, and we don’t know what the benefits are of these programs,” Mussi said.

Mussi added that the Arizona Commerce Authority has not clearly defined who counts as a “qualified investor” for these credits.

Tax credits also don’t influence where entrepreneurs start their businesses. A majority of the 131 entrepreneurs nationwide interviewed for a recent survey by Endeavor Insight, a national business group, said tax incentives were not a consideration when they were deciding where to open their businesses. Entrepreneurs said they considered other priorities, including romantic relationships.

Arizona is one of 26 states that have angel investment incentive programs, according to the Angel Capital Association.

STAY CONNECTED

Emily Gersema is an investigative reporter for the Goldwater Institute.

LEARN MORE

Arizona House Bill 2272

Endeavor Insight survey

Arizona Commerce Authority

Arizona is preparing to offer more tax credits to angel investors, although there is no evidence that these credits help the state attract and retain new businesses.Wednesday, February 19, 2014 - 15:21NoBlogYesBy TopicsEmily Gersema

The Right to Try to Save Your Own Life

bwilson — Tue, 11 Feb 2014 21:31:57 +0000

The Right to Try to Save Your Own Life

February 11, 2014 | By Christina Corieri | email

Imagine you or someone you love has been diagnosed with a deadly disease. All the approved treatment options have proven unsuccessful. Luckily, another option may exist – an investigational medication that has been deemed safe for use but is still in the clinical trial process. Although there may be some unknown side effects, you decide you want to give it a try.

Unfortunately, it’s not that simple. Today, a lengthy and complex bureaucratic process stands between you and the medication that could potentially save the life of you or your loved one. And as you wind your way through that maze of government red tape to gain access, the medicine you desire barely inches toward the market, through an FDA process that takes an average of a billion dollars and more than a decade to reach even prescription sales. That’s time you don’t have to wait.

The Right to Try Act makes patients wait no longer.

Designed by the Goldwater Institute, this state legislative reform transforms the patient experience by removing federal bureaucrats from the decision-making process and putting medical decisions back where they belong – in the hands of patients and their doctors.

According to the Right to Try Act, if a patient has a terminal disease, has exhausted all approved treatment options, and a doctor recommends an experimental medication that has completed basic safety testing, then that patient is able to access the medication so long as the patient provides informed consent and the manufacturer is willing to make available the medication.

The Right to Try Act is already being heard by lawmakers in Arizona, Colorado, and Missouri. Meanwhile, Americans in all fifty states need this reform now more than ever.

From her sickbed, Edie Bacon wrote of the travails a terminal patient faces when trying to gain access to investigational treatments. “The government wants proof of efficacy before it will allow me to take this drug outside of an approved trial. But the ‘proof’ is years away, and I need the drug now….Without it, I’m a dead woman walking. Five kids are going to wonder why they’re left without a mother. Won’t somebody help me get this drug?” Edie died shortly thereafter, but there are thousands of patients who face an identical battle each day – patients who are pleading for the right to try to save their own lives.

Last year, more than half a million Americans just like Edie died of cancer, and thousands more died of other terminal diseases. These people aren’t just statistics—you probably know some of them, and a few may even be your own loved ones. Without a crystal ball, we can’t know with certainty if an investigational drug would have helped them, but we do know that they weren’t even given the chance to try.

The Right to Try Act restores basic medical freedoms to Americans at the most critical point possible—when their own mortality hangs in the balance. Please join the Goldwater Institute in rallying for this most basic freedom: the right to try to save one’s own life.

STAY CONNECTED

Christina Corieri is the Health Care Policy Analyst for the Goldwater Institute.

LEARN MORE

Goldwater Institute: Right to Try

Right to Try Arizona Legislation

Right to Try Missouri Legislation

Wall Street Journal: Sick Patients Need Access to Cutting-Edge Drugs

Pension Managers Among Top-Paid State Workers

bwilson — Thu, 30 Jan 2014 21:22:24 +0000

Pension Managers Among Top-Paid State Workers

January 29, 2014 | By Emily Gersema | email

The state’s 10 highest-paid agency employees work for a public pension fund that is reportedly under investigation by the U.S. Attorney’s Office and the FBI, new records show.

The highest-paid state employee in the Arizona Department of Administration’s database is the chief investment officer for Arizona PSPRS, Ryan Parham, who earns $254,000 a year – more than double Gov. Jan Brewer’s $95,000 annual salary. The third-highest paid employee is the retirement agency’s chief administrator, James Hacking, who earns $234,000 a year.

The Goldwater Institute obtained the salary information for 38,884 state employees last week through a public records request to the Arizona Department of Administration. The department’s database excludes state university employee salary information, which is maintained separately by the Arizona Board of Regents.

The Arizona Republic reported last week that the FBI has interviewed former employees of Arizona PSPRS, the investment trust which finances pensions for more than 52,000 workers, including police and fire department employees statewide, elected officials and state corrections officers. Separately, the U.S. Attorney’s Office is conducting a grand jury investigation of the agency’s real-estate investments.

The database shows the second-highest-paid state employee is Dr. Lauren Bonner, who earns $240,000 a year as a psychiatric medical administrator for the Arizona Department of Health Service’s Division of Behavioral Health Services. She had been the chief medical officer for the agency, which is under scrutiny for reports of violent patient incidents and escapes from the state mental hospital.

Other top earners in the database work for the state’s health care system for the poor and the Arizona State Retirement System, which invests retirement savings for more than 400,000 state employees, including university employees.

“This revelation just goes to show that taxpayers and employees are at the mercy of state pension systems and the people who run them,” said Byron Schlomach, director of the Goldwater Institute’s Center for Economic Prosperity. “This is obviously an abuse that deserves addressing.”

STAY CONNECTED

Emily Gersema is an investigative reporter for the Goldwater Institute.

LEARN MORE

ABC 15 investigation of the Arizona State Hospital

The 10 highest-paid government agency workers in the Arizona Department of Administration database

The state’s 10 highest-paid agency employees work for a public pension fund that is reportedly under investigation by the U.S. Attorney’s Office and the FBI, new records show.Thursday, January 30, 2014 - 14:20YesGovernment Accountability BlogYesBy TopicsEmily Gersema