Posts Tagged ‘State Legislature’
PHOENIX — Funding for Tucson’s Rio Nuevo Downtown redevelopment project could be gone by July 1.
Skeptical members of the Senate Finance Committee said they didn’t get the answers they wanted from Rio Nuevo’s project director at a hearing Wednesday.
Some said not only did Rio Nuevo Director Greg Shelko fail to outline how the city has spent $60 million in state money, but they said the project seems to have drifted from its original purpose.
As the state faces a $2.4 billion shortfall next year, several committee members said they are interested in possibly cutting off the state dollars to avoid deeper cuts to K-12 education and state agencies when the new fiscal year begins July 1. An estimated $600 million in state money would flow to Rio Nuevo over the 22-year life of the project.
“When you come down here, you better have your ‘A’ game, because we are doing a lot of things we don’t want to do,” said Sen. Jim Waring, R-Phoenix, the committee chairman. “I just think we had to pull teeth to get answers.
“I thought that presentation hurt them a little bit today — I really do,” Waring added.
Some members said they’d like to see the funding cut off next year to help balance the state budget, especially after renewed concerns about a lack of accountability.
Shelko said pulling the state dollars would spell disaster for Rio Nuevo.
“If they want to sink Tucson, I suppose that’s a choice,” Shelko said. “Where would we have the ability to do these kinds of things? We wouldn’t.”
In his testimony, Shelko painted a bright picture of Downtown and argued that it just needs more time, pointing to projects in other cities that have taken 30 years to succeed.
“Downtown is not going to grow in five years; it’s not going to grow overnight,” Shelko said. “It’s going to take a long time.”
But senators were not impressed by the city’s list of Downtown accomplishments, which included a planned city-court complex and a Burger King. And Shelko had trouble citing specific dollar figures the committee requested.
“What we’ve done is allowed this entity to take state dollars at their will, and of course the people of Tucson are going to vote for it because it’s not their money,” said Sen. Ken Cheuvront, D-Phoenix.
The committee took no action, but city officials could find themselves in a position of having to better defend Rio Nuevo. The GOP committee members, in a position to negotiate the budget, are likely to discuss their impressions with colleagues in a Republican caucus meeting today.
“My concern with Rio Nuevo has been that’s it’s very difficult to get a straight answer on anything,” said Sen. Barbara Leff, R-Paradise Valley. “If the city of Tucson wants to use its own sales-tax revenue and put it into Downtown projects, they should be able to do that, but I think the state general fund money should be returned.”
Rio Nuevo is funded through a tax incentive financing district that redirects state sales tax dollars to Tucson for use in the district. Originally approved by voters in 1999, lawmakers extended it in 2006.
But the project and its organizers have faced criticism over the years for what’s been perceived as a lack of progress.
A Star investigation last October, referenced by several committee members, found that of the $63 million in taxpayer dollars spent over the past 10 years, much of the money has gone to plan projects that stalled, including studies, consultants and public relations.
Shelko questioned the “motives” of the Star for running that story and said the city has made all its expenses public, even though it stalled releasing documents to the Star for months.
At times sarcastic, lawmakers grilled Shelko on projects that never developed. In particular, they questioned studying the construction of a Rainbow Bridge over Interstate 10 that would house the University of Arizona science center.
“So, you were going to build a building that was a bridge that sat on top of the freeway?” said Sen. Ron Gould, R-Lake Havasu.
“It was a very unique concept,” Shelko responded. “Unfortunately it costs somewhere well over $300 million and it was an infeasible project.”
Laughing, Waring asked: “So, Mr. Shelko, just to be clear, you spent $9 million and have built nothing? It’s a yes or no.”
“Right,” Shelko replied. In actuality, $13 million was spent studying the science center.
Glenn Lyons, CEO of the Downtown Tucson Partnership, testified he was pleased legislators extended the district in 2006 and that continuing it is important to private-sector growth.
“I’m pleased you’re pleased,” Warring said. “You may be the only one in the state.”
Shelko said after the meeting that the mistake the city made was in “managing the public’s expectations.” And he said he was “proud” of progress so far.
“We’d all like a do-over on some things,” he said. “I don’t think, in a general sense, that the city has mismanaged Rio Nuevo.”
Contact reporter Daniel Scarpinato at 307-4339 or email@example.com.
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A Regional New Year’s Resolution, By Bill Dodge, Regional Excellence: HERE
Regional cooperation has had some incredible successes, but it continues to fail to address the tough challenges in most regions. And the challenges are getting tougher, from decaying infrastructure to declining air and water quality, increasing natural and terrorist threats, accelerating climate change, volatile energy costs, and profligate growth. Without success in addressing the toughest challenges — the true test for governing regions — “bottom-up” regional cooperation will die, and along with it the ability of individual citizens and their local governments to shape their own futures.
Unless regional cooperation provides an effective tool to address tough challenges, and quickly, it will be displaced by “top down” state and national government actions in response to public frustration. And there is no guarantee that higher levels of government will do better. (We are starting to see this here in Tucson with proposals for NON PARTISAN ELECTIONS)
I draw this conclusion, reluctantly. Have I, and the many colleagues I respect, been wasting our working years practicing regional cooperation? Were our efforts to educate individuals, establish regional mechanisms, share public services, and design compacts to address timely challenges all for naught?
A resounding no! Our efforts have resulted in building some amazing regional cooperation mechanisms — from regional councils of governments to regional chambers of commerce, academic institutes, citizens leagues, and sewer and transit authorities. It has resulted in addressing pressing regional challenges in every region across the country — especially transportation challenges. Maybe, most importantly it has resulted in educating individuals on the importance of regional cooperation and engaging them in cooperative efforts.
But, alas, regional cooperation increasingly appears to be bumping up against an impenetrable governance ceiling. Whereas regional mechanisms have nurtured more sophisticated visioning, problem-solving, service-delivery, and even performance auditing capacities, most lack the powers, resources, and especially public support to address the increasingly tougher regional challenges. And the gap between the capacity of these mechanisms and the emerging challenges appears to be growing.
The “Achilles Heel” of the best of regional cooperation efforts has been the lack of “clout” commensurate with the challenges being addressed. My fear is that asking weak regional cooperation mechanisms to take on more, and more demanding challenges, will not only result in fewer successes but mortally weaken the very places that drive our and the global economy. Citizens need to break out of their “local” mindsets, consider the regional “unthinkable”, and advocate for the regional “unheard-of”, if regional cooperation is to have the powers and tools to make regions work. With the support of, not the displacement by, state and national governments. And now! …….
Stateside regions tend to quickly dismiss most options for strengthening regional cooperation. They mask their objections in our tradition of independent local governments; that government closest to the people is the best. Less frequently voiced is that weak regional cooperation reinforces the tyranny of individual local governments, especially those that are affluent, think they can take care of their own needs, and are unwilling to cast their lot with the regional hoi polloi. Some of these objections have merit in that many of the overseas actions are “top-down”, limiting local government and citizen involvement in designing regional cooperation models or participating in their activities. But, thus far, few regions stateside have been inspired to pursue “bottom-up” models that provide real powers and resources to regional cooperation, in spite of national government transportation and other funding incentives, unless mandated by the random acts of state governments, such as in California, Minnesota, and Oregon.
Goldwater Institute separates budget myths from reality as lawmakers grapple with billion-dollar budget shortfall
Phoenix–Arizona faces one of the largest budget deficits in the nation and lawmakers are struggling to close the gap. Because half of all General Fund spending goes toward education, schools and universities will necessarily be affected by the state’s across-the-board belt tightening.
While some school administrators and special interest groups have referred to the potential budget cuts “slashing education” and “shortsighted and borderline malicious,” the Goldwater Institute would like to separate the reality of education funding in Arizona from several often publicized myths.
Myth #1: Schools simply cannot afford the budget reductions being proposed by the legislature.
Fact: The budget cuts proposed by the State House leadership amounts to a 2.5 percent reduction. Over the last five years, K-12 funding has increased by 40 percent. Reducing funding by 2.5 percent will still leave schools with more money than they had in 2008 adjusted for inflation.
Myth #2: Schools have tightened their belts as much as possible. There’s simply nothing left to cut.
Fact: Last year Tucson Unified School District lost track of millions of dollars in equipment. With similar highly publicized stories frequently surfacing, there’s room to tighten up. In addition to implementing better controls on equipment and supplies, the Goldwater Institute recommends three more ways schools and school districts can cut their budgets without eliminating teaching positions: 1.) Ban teachers from having non-classroom assignments; 2.) Ban teacher’s union employees from conducting union work on district payroll; 3.) Cut administrative bloat at the district level. Arizona has an unusually large share of non-teaching public school employees. Teachers make up slightly less than half of on-site staff in public schools, placing Arizona fourth worst among the 50 states and the District of Columbia in teachers as a share of on-site public school staff.
Myth #3: Arizona already ranks 49th in the nation in education funding and we don’t want to be number 50.
Fact: When all of Arizona’s funding streams are added up, Arizona school funding ranks in the middle of the states at more than $9,000 per student per year.
Myth #4: Suspending the tax credit for donations toward private school tuition will save money and mitigate the need for education budget cuts.
Fact: Getting children into private schools with $1,000 of foregone tax revenue costs less than the $9,000 spent on a child in the public school system. To save money, the legislature should expand the private school scholarship tax credit and move more children from public to private schools. Suspending it will disrupt these students’ educations and increase costs to the state as children return to public schools.
Myth #5: Student success will suffer if budget cuts lead to increased class size.
Fact: Research shows that students would be much better off if schools did let their most ineffective teachers go, and redistributed the students to more effective instructors. Teacher quality has been found to be 10- to 20-times more important than class size in achieving student learning gains. Schools could thereby cut their spending and improve student learning simultaneously.
Myth #6: All-day kindergarten is essential to successful child development and should not be eliminated by budget cuts.
Fact: Studies have consistently shown that any benefit from all-day kindergarten disappears by the time a child reaches the third grade, a phenomenon termed “fade out.” Also, all-day kindergarten was widespread in Arizona public schools before a specified state funding stream was created two years ago, districts can continue all-day kindergarten if it is a priority.
Myth #7: Individual districts and schools are reluctant to cut their own budgets, so the legislature should direct where cuts will be made.
Fact: Individual districts and schools will be far more effective in determining how to cut their budgets while protecting their students and employees and should be given the flexibility to set their own budget priorities.
To that point, Madison Elementary School District Superintendent Dr. Tim Ham said on January 26, 2009:
“The Madison School District understands the crisis the State of Arizona is in economically and knows reductions in education funding will be required. We would ask that districts be allowed to use any of their funding sources to meet their obligations. This would require a temporary suspension of current legal requirements. However, it would provide flexibility, local control, and equality among districts.”
Myth #8: Cuts in university funding will drive Arizona into “Third World” status.
Fact: Statewide, higher education budgets have increased by $332 million since 2004. If the full proposed FY 2009 cut of $80.5 million to ASU’s budget were enacted, it would still receive more state funding than in 2006. Northern Arizona University would lose $31 million in FY 2009, but still receive more state funds than in 2007. The University of Arizona faces a proposed $103 million cut in FY 2009, which would take it back to 2004 state funding levels.
Myth #9: Investment in higher education is critical to the future success of Arizona’s economy.
Fact: Comparing states’ higher-education appropriations and gross state products yields no evidence that spending drives economic growth. From 1991 to 2000, none of the top 10 states in greatest higher-education appropriations were among the top 10 in economic growth.
Myth #10: Cuts to university budgets will make it necessary to double tuition thereby violating the Arizona Constitution’s clause to make higher education “nearly as free as possible.”
Fact: Legal precedent has determined that “nearly as free as possible” means tuition for Arizona public universities must remain in the bottom-third of the nation. Any increase in university tuition is required to meet that standard. As it stands, tuition at Arizona public universities is very low compared to national averages.
The Goldwater Institute is a nonprofit public policy research and litigation organization whose work is made possible by the generosity of its supporters.
SACCA unveils 2009 legislative agenda
The Southern Arizona Chamber of Commerce Alliance (SACCA) unveiled its 2009 legislative agenda, introducing the issues it will look to address with the Arizona Legislature when the new session begins in January.
Some issues were addressed in the last legislative session, with bills getting through the state houses but vetoed by Gov. Janet Napolitano. The agenda is sweeping, from reform of the state’s ballot-initiative process to tort reform to immigration. Following are some highlights of the business-related issues of interest in southern Arizona:
Initiative Reform: Permit legislative changes to voter-approved initiatives with voter ratification. Support a review of initiatives prior to implementation to determine fiscal or other implications.
Tort Reform: Seek legislation to remove incentives to file frivolous lawsuits.
Taxation/Budget: Support permanent repeal of the state property tax. Seek elimination of business personal property tax or raising threshold to exempt more small businesses.
Education: Oppose efforts to lower or eliminate AIMS standards. Support strategic spending proposals for K-12 and higher education. Support efforts to make higher education more accessible.
Labor/Workforce Management: Support a thorough review of workers’ compensation laws, especially as they relate to impact on premiums. Oppose repeal of the state “Right to Work” law.
Immigration: Oppose unfunded mandates regarding local enforcement of federal laws. Support reimbursement of all local immigration-related expenses (law enforcement, education, health care).
Environment/Natural Resources: Support legislation that allows counties to pass ordinances against water waste.
Economic Development: Support the military in our region and oppose efforts to reduce operations. Support the timely completion of a statewide study of home affordability. Support statewide economic-development strategies to encourage business attraction and expansion.
Healthcare: Support reinstatement of coverage for groups of one. Support tort reform that would lower health insurance costs. Oppose legislation that would require employer-provided benefits.
Transportation: Support multi-modal transportation options through the state’s growth corridors, which may include high-speed rail from Phoenix to Tucson. Support Congressional delegation’s efforts to procure federal transportation money for the state.
The Southern Arizona Chamber of Commerce Alliance (SACCA) is a group of eight southern Arizona chambers of commerce, representing more than 4,500 member businesses and 200,000 employees, serving as an advocate for common business interests in the region. Member chambers are the Tucson Metropolitan, Tucson Hispanic, Tucson GLBT, Northern Pima County, Marana, Sierra Vista, Rio Rico and Nogales-Santa Cruz County.
Anti-Business States Awash In Red Ink
Shortly after he was confirmed as governor of New York earlier this year, David Paterson told a group of business executives that when he received congratulations from old friends he hadn’t heard from in years, he was surprised how many no longer lived in New York. “All of them basically said the same thing,” Paterson told the group. “‘Good luck in New York state, but we can’t pay the taxes. The opportunities aren’t there.’”
After that experience, Paterson presumably can understand the complaints of corporate executives recently surveyed by Development Counsellors International, which advises companies on where to locate their facilities. More than four in ten of them have ranked New York as the worst state to do business in–second only to California in unfavorable mentions. The most common gripes included high taxes and anti-business regulations. Joining New York and California on the list of most unpopular states were New Jersey, Michigan and Massachusetts.
The DCI study, coming as it did amidst growing talk of state fiscal crises around the country, is particularly revealing. Of the approximately $48 billion in accumulated budget shortfalls that the 29 states with projected deficits are facing, $33 billion, or two-thirds of the gap, is concentrated in those five states considered by corporate executives to be the least friendly to business. Meanwhile, among the five states ranked as having the best business environment, Texas and North Carolina have no projected budget gaps, and Georgia, Tennessee and Florida are facing shortfalls amounting to about $4.1 billion, or less than one-tenth of the states’ total.
An idealist would assume that those stark numbers would jump out at legislators in the most anti-business states and prompt a bracing re-evaluation of their spending, tax and regulatory regimes, as Paterson advocates. But no such luck. Paterson’s former colleagues in the state legislature are lobbying for a new tax on millionaires, while across the country California’s legislators have called for boosting the state’s top tax rate from 9.3 percent to 11 percent. Since many firms, especially small ones, are organized corporately in such a way that they pay taxes on profits at their owners’ personal income tax rate, any increase in the top rate of income taxes will hit small firms hard, to say nothing of the impact on the personal taxes of executives at big firms.
I’ve often heard people around the country say that voters in places like California, New York and New Jersey (which instituted its own ‘millionaires’ tax on those earning $500,000 or more a year several years ago) get what they deserve. But beware. States that have taxed and spent themselves into a bind want everyone else to pay for their excesses. Even as Gov. Paterson excoriated his former colleagues in the state legislature for failing to recognize the magnitude of New York’s budget problems, last week he traveled to Washington, D.C., to urge the federal government to help bail out the state. Paterson argued creatively that the rest of the country should come to his aid because the Empire State is home to the country’s financial markets and thereby contributes disproportionately to the America economy–although I can imagine that there are many states that would gladly take those financial institutions off of New York’s hands if the governor considers them such a burden.
Paterson also contended that states like New York deserve aid because they send more in taxes to the federal government than they receive in return in spending. This is an old argument that one often hears from pols not only in New York, but in New Jersey, California and Massachusetts. Based on an annual ‘balance of payments’ study sponsored by former Sen. Daniel Patrick Moynihan from 1977 through 1999, the study found that certain states were always big losers. But even Moynihan realized that those states were mostly responsible for their own plight, because their federal legislators had led the way in constructing a tax system that not only redistributed income from the rich to others, but also redistributed income regionally.
For instance, a study of the 1993 Clinton tax increase, which included a sharp rise in top income tax rates, found that the legislation cost the residents of California and New York $60 billion in additional taxes in the first year, mostly because of all those rich Wall Street and Hollywood types who got hit harder. Residents of one New York congressional district alone, on the East Side of Manhattan, paid more in additional taxes than taxpayers in any other district in the country—an increase of $3.4 billion, or 700 percent, in one year. And yet the congresswoman representing that district, Carolyn Maloney, and the majority of California’s and New York’s congressional delegations, voted in favor of the tax increase, which had been heavily advocated by economic advisor to the president and New Yorker Robert Rubin.
By contrast, most of the New York congressional delegation voted against the 2003 Bush tax cuts that saved New Yorkers $36 billion in federal taxes in the first year alone, according to a study by the Manhattan Institute’s E.J. McMahon. The difference, of course, is that the tax cuts left money in the private economy, not in the coffers of government, where the likes of Maloney could get their hands on it.
As the fiscal problems of some states increase, we are likely to hear more about how the federal government must bail them out. It’s the failings of the federal government (that is, the Bush administration), that are responsible for state budget woes, so the argument goes. But any look at the states with the biggest deficits reminds us that governors and legislatures are largely the authors of their own problems, and that the biggest trouble some of them seem to have is that their taxing and chronic overspending have made them toxic to the business community. Don’t ask the feds to fix that.
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