by AZ Free Enterprise Club | Jan 25, 2025 | Opinion
By the Arizona Free Enterprise Club |
As President Trump gets to work cleaning up Joe Biden’s failed economy, the last thing the people of Arizona need is to be sending their hard-earned dollars to woke Hollywood. But that’s exactly what’s happening.
Thanks to a law passed in 2022, movie companies that film in Arizona will begin receiving refundable tax credit subsidies this year—up to 15 percent if they spend up to $10 million in production costs, 17.5 percent if they spend between $10 million and $35 million, and 20 percent if they spend over $35 million. Then, to top it all off, these movie companies can get an additional 2.5 percent if they meet other criteria.
But here’s the real kicker. The keyword in all of this is “refundable.” This essentially means that if a movie company qualifies for more credits than they owe in taxes, the State of Arizona sends them a check!
So, how much does this outrageous tax scheme cost the people of Arizona?
Up to $125 million each year!
For that kind of money, there must be at least some kind of return on this investment, right? Nope.
If a company comes to Arizona, films a movie, mentions our state in the credits but decides not to release or distribute the film, it still receives the money.
Yes. You read that right. Arizona taxpayers could be funding Hollywood movies that won’t ever see the light of day…
>>> CONTINUE READING >>>
by AZ Free Enterprise Club | Jul 3, 2024 | Opinion
By the Arizona Free Enterprise Club |
After months of debate surrounding the controversial reauthorization of the Arizona Commerce Authority (ACA), the tension finally broke on the last day of session when HB2210 was raced through the House and Senate and signed by Governor Hobbs.
Everyone at the capitol was aware of the problems surrounding the Commerce Authority. Our elected officials were briefed on the innumerable deficiencies, questionable activities, and likely illegal behavior of the agency. Yet when it came time to act, the legislature capitulated to the special interest benefactors of the agency, passing a reauthorization with no real reforms. The included changes were so inconsequential that an agency dealing with months of negative press about illegal CEO junkets had nothing but accolades for legislative leadership.
What did the final ACA package look like? In exchange for a five-year reauthorization (one of the longest reauthorizations ever granted to the ACA), the agency agreed to add to their board an attorney practiced in litigating Gift Clause violations, a requirement that their board meetings be videoed and hosted online for public review, a cap of “only” 100 state-paid full-time employees, and some reporting requirements for permitting and approval times by local cities and towns.
So, what started out as a hopeful and robust opportunity for reform quickly disintegrated into window dressing changes…
>>> CONTINUE READING >>>
by AZ Free Enterprise Club | Jun 12, 2024 | Opinion
By the Arizona Free Enterprise Club |
There are plenty of problems with the Arizona Commerce Authority. Since its inception in 2011, criticisms were raised concerning its freewheeling powers to dole out taxpayer money with practically no legislative oversight and broad exemptions from important guardrails such as the prohibition of using outside counsel (rather than the Attorney General’s office.) These issues have resurfaced over the years in critical Auditor General reports that have highlighted the insufficient reporting and record keeping for the administration of grants and awards provided by the agency to private businesses. This led to a mere 2-year extension of the agency in 2016, and a controversial reauthorization in 2018 when Republicans and Democrats alike banged the table for reforms. And most recently, the agency has come under fire by the Attorney General herself, for unconstitutional gifts in the way of wining and dining and Super Bowl tickets for CEOs.
Despite consistent criticism across the aisle and over the years, the ACA has evaded any real substantial reforms. That could very well change this year.
There now seems to be bipartisan interest in reining in an unaccountable agency with a $226M budget and a multi-million-dollar slush fund…
>>> CONTINUE READING >>>
by AZ Free Enterprise Club | Jan 27, 2024 | Opinion
By the Arizona Free Enterprise Club |
A contentious fight is brewing in the Arizona legislature, the possible reauthorization of the Arizona Commerce Authority (ACA). Governor Hobbs has made the reauthorization a top priority of her administration this session, mentioning it in her State of the State address. But the debate has an ironic element considering the history of its inception.
In 2011, the state was crawling out of a crippling recession, having lost literally hundreds of thousands of jobs and even selling off the state Capitol buildings to dig out of a deficit. The legislature, in collaboration with the Brewer Administration, introduced an omnibus bill sold as a “jobs package” which refashioned the bureaucratic Department of Commerce into the Arizona Commerce Authority, and incorporated both new targeted tax credit programs and incentives, as well as phased in corporate income and commercial property tax cuts.
Democrats a Decade Ago Opposed the ACA
The bill at the time was uniformly opposed by Democrats, including then Representative Katie Hobbs. Republicans mostly coalesced around the bill, with a handful of key conservatives voting in opposition of the legislation, largely in protest of the corporate welfare and multi-million-dollar “deal closing” fund with no legislative oversight. For those unfamiliar with the deal closing fund, it is a large pot of money appropriated to the Director of the Commerce Authority to throw at corporations to convince them to relocate to Arizona.
After the ACA was passed and signed into law, it would seem that only a few conservative voices and the Club itself would prove prophetic at the lack of oversight and inevitable gift clause violations, which is a constitutional protection from the government subsidizing private industry…
>>> CONTINUE READING >>>
by Corinne Murdock | Jan 18, 2024 | News
By Corinne Murdock |
On Tuesday, Attorney General Kris Mayes announced that the Arizona Commerce Authority (ACA) violated the Arizona Constitution’s Gift Clause.
Mayes determined that the ACA’s high-dollar “CEO Forums” — in which ACA would court CEOs with accommodations, experiences, and refreshments — were unconstitutional, namely noting the massive expenditures without returns last year under Hobbs. In a letter to ACA general counsel, Mayes explained that the gifts corporate executives were impermissible because they didn’t create concomitant public value.
“The current structure of the CEO Forums confers significant value on invited private executives and their guests without obtaining any identifiable value for the state,” said Mayes.
ACA is a state agency dedicated to growing and diversifying the state economy by attracting, expanding, and retaining businesses. ACA is managed as a public-private partnership.
Mayes’ findings confirmed a report from the auditor general last September which determined that the ACA may have misspent about $2.4 million to court private CEOs between 2018 and 2023. A majority of that — over $2 million — occurred last year alone under Hobbs’ first year as governor.
From 2018 to 2022, ACA spent about $356,000 in total on forums for corporate executives: an average of $89,000 per year, about 4.5 percent of what ACA spent on last year’s forum.
Last year marked the most expensive CEO Forum under investigation. The forum was planned around the Super Bowl and Waste Management Phoenix Open; ACA spent over $2 million on corporate executives, and Gov. Katie Hobbs was one of the recurring featured experiences.
In Mayes’ decision on Tuesday, she pointed out last year’s forum specifically.
“While the ACA may hold forums that confer a nominal value on attendees, its past forums, including last year’s $2 million Super Bowl forum and its planned 2024 Forums, do not come close to meeting that requirement,” said Mayes.
As part of last year’s forum, ACA gifted corporate executives and their guests rooms; in-state transportation; event tickets to the Waste Management Phoenix Open VIP Skybox, an NFL Owners Party, a Super Bowl VIP Tailgate Party, the Super Bowl Experience, private viewing suite for the Super Bowl, and concerts associated with the Phoenix Open and Super Bowl; theater tickets; regular season football game tickets and parking passes; lunch invitations with NFL leadership; and Super Bowl Host Committee VIP Golf Tournament tickets.
ACA admitted in a December response to the attorney general that they couldn’t attribute direct causation between CEO Forum attendance and a decision to locate a project in Arizona. Mayes declared that the inability to show cognizable economic value received for their expenditures constituted a violation of the Gift Clause.
“ACA’s responses to our office’s inquiries demonstrate that it expends considerable funds on simply achieving attendance at the CEO Forums even though there is no public benefit from an executive’s private ‘changing perception and increasing sentiment’ about Arizona,” wrote Mayes. “ACA counts non-binding commitments to locate a project in Arizona as ‘project wins.’”
Up until the Tuesday determination by Mayes, ACA was planning on spending another million on corporate executives this year.
ACA planned to spend over $1 million on two forums this year for the NCAA Final Four Basketball tournament and the Waste Management Phoenix Open. If the costs were split evenly, each forum would cost around $400,000 more than the individual 2018-2022 forums held under former Gov. Doug Ducey.
Mayes pledged to prevent the ACA from issuing future gifts to private entities.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
