Goldwater Institute Sues Payson For “Emergency Clause” In Bond Measure

Goldwater Institute Sues Payson For “Emergency Clause” In Bond Measure

By Matthew Holloway |

The Payson Town Council’s August decision to incur a $70 million debt via a bond measure approved without a public referendum has triggered a lawsuit from concerned residents with the assistance of the Goldwater Institute. Goldwater is assisting resident Deborah Rose to challenge the measure despite the Town’s claimed legal pretext of an “emergency” to counter efforts from the public to stop it.

John Thorpe, a Goldwater attorney representing Deborah explained, “Our leaders want our money, but not our vote. They’re trying to take advantage of legal loopholes to saddle their own constituents with tens of millions of dollars of debt, systematically stripping power from the people by ignoring laws and twisting their truths.”

As noted by the Payson Roundup, the lawsuit seeks to block the bond resolution by arguing that no legal emergency actually exists. However, the outlet reported Payson Town Attorney Jon Paladini scoffed at the lawsuit as “specious,” and claimed it would be dismissed quickly. He told the outlet, “Bottom line is that the courts are prohibited from second guessing a legislative body like the council — a slew of cases tell us that. It’s about as close to being frivolous as we’ve seen.”

The use of the city’s emergency clause with a 6-1 vote forced the bond sale into immediate effect and brushed aside the typical 30-day period voters would have to gather signatures to force a vote.

The alleged justification for the “emergency” comes from speculation that at an upcoming meeting of the Federal Reserve, the Fed is expected to reduce interest rates by a quarter or half-point which would lower the interest rates the town would pay. 

Thorpe argued that, “Government officials’ efforts to time the market, based on pure speculation about financial trends, is not an ‘emergency,’” and added that this use of the “emergency clause” violates the Arizona constitutional right to organize a referendum and vote on it.

“The so-called ‘emergency’ here is nothing more than town officials’ apparent belief that interest rates might rise in coming months, and that they’ll secure slightly better municipal bond terms now than they could in 30 days if they gave residents the opportunity to organize a referendum,” 

He wrote, “When the council approved the bond measure, it slipped in an ’emergency clause,’ stating that the measure would go into effect immediately, without letting residents who might oppose the measure organize a referendum and put the issue to a vote. But the Arizona Constitution guarantees the right of referendum: the right of Arizonans to circulate petitions and refer bills, ordinances, and resolutions for a popular vote. It’s a cornerstone of democratic accountability in Arizona, and it means that the people—not politicians—have the last word in state and local government.

The Payson Town Council is trying to bypass that safeguard and short-circuit the democratic process using a legal loophole: a narrow exception allowing cities and towns to enact emergency measures without waiting for a referendum when such measures are ‘necessary for the immediate preservation of the peace, health or safety of the city or town.’ The so-called ’emergency’ here is nothing more than town officials’ apparent belief that interest rates might rise in coming months, and that they’ll secure slightly better municipal bond terms now than they could in 30 days if they gave residents the opportunity to organize a referendum.”

Paladini maintains that the bond sale measure meets the emergency clause designation and therefore the bonds for such general town projects as “a community and swim center, hiking trails and trailheads, covered event center to lure conventions,” and “upgrades to Main Street to create a business and entertainment district,” “improvements to streets and to public facilities like the police station and fire stations,” according to the Roundup, all constitute “emergency” spending. As noted in the Roundup, nearly all bond sales rely upon the “emergency clause” to sidestep the possibility of blocking them through referendum.

Should the Goldwater lawsuit succeed, it would enforce the standard that voters can in fact challenge bond measures as intended under the Arizona Constitution.

Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.

Bonds And Overrides Elections Offer Mixed Bag Of Results

Bonds And Overrides Elections Offer Mixed Bag Of Results

By Daniel Stefanski |

While the contests weren’t as significant as in other states , last Tuesday, Arizonans concluded a month of elections, which largely took place via absentee ballots.

The majority of races across the state, primarily in Maricopa County, were for bond approvals. Flagstaff voters made decisions on almost two dozen questions, while Tucson voters considered mayoral and city council selections.

Opponents of municipal bonds had a decent night of results. On the Arizona Republic’s Election Tracker page, twelve of forty-four of those questions appeared to be rejected by voters. Many of those results came in the west and east regions of Maricopa County.

In the lead-up to the election, both the Arizona Free Enterprise Club and the Arizona Tax Research Association (ATRA) shed light on the spending requests up for adjudication by the voters. ATRA wrote in September that the “$3.5 billion in bonds is easily the largest statewide K12 bond request in history.” The Arizona Free Enterprise Club added, “This level of borrowing being sought by local school districts is both unwise and unnecessary, especially given the large amounts of money that have been pumped into the system.”

Most of the bond questions were approved, however, with several of those results occurring in Glendale and Phoenix. Glendale had five successful bond outcomes and Phoenix had four.

Jeff Barton, the City of Phoenix’s Manager thanked his municipality’s voters for their positive support for the bonds, saying, “Thank you, Phoenix residents, for supporting the 2023 General Obligation Bond Program. Because of your support, we will be able to fund critical infrastructure and rehabilitation needs of both aging City facilities and areas of rapid growth, with new and enhanced parks, libraries, fire and police stations, affordable housing, street improvements and more.”

In 2024, Arizona voters will have higher-profile races to make determinations on, including a President of the United States, a U.S. Senator, and a bulging list of initiatives with critical implications for the future of the state. Although elections in even years have both mail-in and in-person components, most of the voting is still done via absentee opportunities, making the return of those ballots critical to candidates’ and propositions’ successes.

Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.

Voters Should Think Twice Before Approving Billions In Unwise And Unnecessary K-12 Bonds

Voters Should Think Twice Before Approving Billions In Unwise And Unnecessary K-12 Bonds

By the Arizona Free Enterprise Club |

K-12 schools in Arizona are currently flush with cash. Between billions in increased state spending from the legislature, COVID cash from the feds, and declining student populations, district school spending is at an all time high. But next week, voters across Arizona will decide the fate of 23 bond requests from schools that total a historic $3.5 billion.

This level of borrowing being sought by local school districts is both unwise and unnecessary, especially given the large amounts of money that have been pumped into the system. State funding has increased so quickly in the last 36 months that the legislature decided to override the constitutional spending limit the last two fiscal years. This is funding over and above the formulaic cap in the constitution that exists to protect taxpayers from runaway and unaccountable spending.

And contrary to what you probably hear from teachers’ unions and their sycophant friends in the media, lawmakers continue to increase school spending with every state budget. With all this new spending, district schools receive more money per student than ever before, and it’s not even close.

Not included in the state spending cap, however, are federal funds. And when schools were shut down during COVID, the federal government poured trillions of dollars into them. Many of the school districts asking their taxpayers to hand over hundreds of millions of dollars in bonds next week are still sitting on a pile of unspent COVID cash…

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Yee Takes A Stand For Israel, Plans To Increase Investments

Yee Takes A Stand For Israel, Plans To Increase Investments

By Daniel Stefanski |

One Arizona leader is using her statewide office to support Israel at a time when that nation faces tremendous threats to its security.

Arizona State Treasurer Kimberly Yee recently announced that her office “plans to increase Israel bond holdings to support Israel during this time of crisis.” Yee’s press release shared that the State Treasurer’s Office “has been investing in Israel bonds since 2013 and currently has $15 million in holdings.”

Treasurer Yee issued a statement in conjunction with her announcement, saying, “In the wake of the distressing news of the horrific terrorist attacks in Israel, I promptly directed my investment team to contact our esteemed partners in Israel to increase our Israel bond holdings as we continue to stand firmly with Israel. The state of Arizona is a friend and ally of Israel, and it is imperative that we support them through our actions, and not just our words.”

Yee also took an opportunity to highlight the importance of her action and encourage her colleagues around the country to follow suit. She said, “Israel bonds are a secure and reliable investment option that not only contributes to the Arizona Treasury’s diversified investment portfolio, but also strengthens our support and partnership with the State of Israel. Investing in Israel bonds is something that I not only support, but also urge my fellow state financial officers to do as well, especially in this time of crisis. In this time of adversity, it is our duty to stand resolute and support Israel as a nation.”

The Treasurer’s Office noted that “Israel bonds serve as an investment option for individuals, institutions and nations worldwide to support the economic growth and stability of the State of Israel,” adding that “investments in Israeli bonds offer both reliable financial returns and contribute to Israel’s economic and strategic well-being.”

According to Yee’s office, “the Israeli government will be issuing new bonds and Arizona has been placed at the forefront of the list of institutional buyers.”

The second-term Republican Treasurer has been a staunch supporter of Israel throughout her time in public service, using her platform and her office to stand with the American ally to the full extent of her authority. During her first term, Yee led the efforts to become “the first state in the country to enforce Anti-BDS laws (Boycotts of Israel) by divesting $143 million from Unilever, the parent company of Ben & Jerry’s, in response to the company ending distribution of its products in parts of Israel.”

In 2022, Treasurer Yee also notified Morningstar Inc. that they were at risk of being placed on the Arizona Treasury’s prohibited investment list for violating Arizona law by actively boycotting the State of Israel. Yee said, “It is my duty to defend Arizona’s anti-BDS law and I will ensure that Arizona does not do business with companies that are attempting to undermine Israel’s economy.”

Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.