A new report released by the taxpayer-watchdog group Goldwater Institute is calling on the Arizona Legislature to address the use of public money by the League of Arizona Cities and Towns for purposes which go against the public’s interest.
“Taxpayer-Funded League Lobbies Against Taxpayer Interests,” the report by Jon Riches and Jenna Bentley, details the use of taxpayer funds by the League of Arizona Cities and Towns in ways which represent the interests of public officials and government bureaucrats rather than the interests of the taxpaying public.
“The League uses taxpayer dollars to help fund its political efforts, frequently lobbying in favor of or against proposed legislation at the Arizona Legislature,” according to Riches, the Goldwater Institute Director of National Litigation, and Bentley, the Goldwater Institute Director of Government Affairs. “While the League supports and opposes bills sponsored by members of both political parties, its agenda is decidedly anti-freedom, pro-government, and partisan.”
The situation can easily be addressed if state lawmakers approve three reforms, the report states.
“It is time to protect taxpayers by prohibiting taxpayer-funded lobbying activities while also increasing transparency and accountability when local governments advocate at the legislature through membership organization,” Riches and Bentley assert.
To start, the report recommends extending the current ban enacted in 2017 on using taxpayer funds to pay for lobbyists who represent the state government. The ban should also apply to local government governments and the League, Riches and Bentley propose.
“Cities and towns could still voluntarily join together to discuss issues of mutual concern—but do so without expending taxpayer resources on lobbying,” they say.
Then, there needs to be state legislation passed to address the disproportionate rate of dues paid to the League by smaller municipalities. This occurs because overall dues are capped for Arizona’s larger cities, resulting in a higher per capita rate for citizens of smaller communities.
“Residents of small cities and towns should not bear a disproportionate burden in financing the League and its activities,” the report states. “After all, larger cities receive the same services from the League that smaller cities do.”
The third recommendation put forth by Riches and Bentley calls on lawmakers to ensure better transparency by the League, which is a nonprofit organization comprised exclusively of local governments. In fact, more than a dozen League employees are currently active in the Arizona State Retirement System (ASRS) and several retired League employees receive ASRS pensions.
“League employees themselves are technically private employees, but in many ways they enjoy the benefits of government employment,” the report notes. “Given that the League’s membership is comprised solely of public bodies and its employees receive government perks, one would expect the League to be subject to the same transparency and accountability measures that apply to other public entities.”
These reforms, according to Riches and Bentley, would go a long way toward ensuring tax dollars are used to advance the public’s business, not to amplify the voice of special interest lobbyists.
“The Arizona Legislature can protect municipal taxpayers from the abuses that occur when local governments use taxpayer resources to lobby state government and blur the line between public and private activities,” the report recommends. “It is time to protect taxpayers by prohibiting taxpayer-funded lobbying activities while also increasing transparency and accountability when local governments advocate at the legislature through membership organizations.”
Flagstaff City Council voted last Tuesday to waive its land use restriction for property owners who submitted around $50 million in legal claims under the Arizona Private Property Rights Protection Act.
The Goldwater Institute submitted a demand letter on behalf of property owners in July. At the time, claims amounted to over $23 million for over 50 property owners.
Under the city’s High Occupancy Housing (HOH) Plan, residential and mixed-use properties faced restrictions such as a limit on the density and number of bedrooms and units, and additional requirements for automobile and bicycle parking standards. The HOH Plan would affect buildings with more than 75 bedrooms or 30 units per acre in dormitory or apartment-style units.
In part, the Private Property Rights Protection Act, or Prop 207, requires government to compensate property owners for any land use laws that restrict the right to “use, divide, sell, or possess” a property and thereby reduce its fair market value.
“If the existing rights to use, divide, sell or possess private real property are reduced by the enactment or applicability of any land use law enacted after the date the property is transferred to the owner and such action reduces the fair market value of the property the owner is entitled to just compensation from this state or the political subdivision of this state that enacted the land use law.“
Under Prop 207, individuals that believe a land use law impacts their property’s fair market value must submit a demand letter to the government who enacted the law. The government must then choose to either compensate the property owner, waive the law for that property, or amend the law entirely.
Prop 207 also doubles down on private property protections within the state and federal constitutions, adding further measures to define and restrict eminent domain.
The Goldwater Institute confirmed with AZ Free News that even more property owners have contacted them about claims.
This Tuesday, the Flagstaff City Council discussed the HOH Plan again during a work session. A presentation on the subject noted that there were 87 Prop 207 claims in all, totaling over $50 million. In reviewing the plan, the presentation asked the council if it would like to maintain the plan, modify certain aspects of it, or scrap it entirely.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
Division One of the Arizona Court of Appeals will soon determine whether the city of Scottsdale violated the state’s gift clause law by awarding one swim team public pool discounted access at the expense of another – for over 10 years. Court of appeals judges Jennifer Perkins, Cynthia Bailey, and Maria Elena Cruz heard the case, Neptune v. Scottsdale, on Wednesday.
As reported previously, swim coach Joe Zemaitis had attempted for 13 years to gain access to Scottsdale’s public pools for his team, Swim Neptune. The city continually rebuffed Zemaitis’s attempts, instead granting access at discounted rates to another team, the Scottsdale Aquatic Club.
In a press release, Zemaitis explained that their efforts over the years were met with bureaucratic inconsistencies.
“Since 2007, we’ve been aggressively pursuing space in the Scottsdale pools,” said Zemaitis. “They seem to reinterpret the rules and rewrite the rules every time we are eligible under the criteria, they change them again to try to freeze us and our residents out, and it’s simply not
fair.”
Initially, Zemaitis apprised the Goldwater Institute of the situation. Their legal team roped in the American Freedom Network (AFN) – the institute’s network of pro-bono attorneys. AFN counsel sent the city of Scottsdale a letter to allow swim teams to bid on the pool space. This prompted the city to open up the pool space for a request for proposal (RFP): a formal solicitation bid.
However, the city of Scottsdale cancelled the RFP after it was apparent that the Scottsdale Aquatic Club would lose the bid. That was the final straw for Zemaitis. This past February, the Goldwater Institute filed suit against the city.
In a statement, the Goldwater Institute asserted that the city of Scottsdale had created a monopoly – giving gifts of discounted rates and pool access to the Scottsdale Aquatic Club in violation of the state’s gift clause – then violated their own procurement code in their handling of
the RFP.
“This monopoly violates Arizona’s Gift Clause, which prohibits government from giving gifts to private entities. That’s exactly what the city of Scottsdale is doing here,” asserted the Goldwater Institute. “The deal was also done in violation of the city’s own procurement code. Scottsdale’s unlawful actions against Swim Neptune Foundation are preventing the swim club’s Scottsdale families from using facilities that they’re already paying for with their taxes.”
During Wednesday’s hearing, the city’s attorney, Eric Anderson, challenged that no city actions constituted a gift clause violation. Anderson argued that cancellation of the RFP contract and the lane fees weren’t gift clause violations.
“What is the claim here? What is Neptune asking this court to do? Are they asking for an injunction, a mandamus?” questioned Anderson.
Anderson argued further that the issues of procurement and gift clause abuses are separate.
Even so, Anderson claimed that the city hadn’t violated any procurement processes. He said that the acting procurement director merely noticed that the process had an error – that the committee should’ve scored the procurement bids entirely and not partially.
The panel of judges appeared confused by Anderson’s arguments. They wondered at the apparent conflicting language between the city’s method for scoring and the RFP (request for proposal).
Judge Perkins stopped Anderson multiple times to note that the court wasn’t so much concerned about the why behind the RFP cancellation, but the fact that it occurred at all.
“Isn’t Neptune saying this cancellation of the RFP worked to give a special advantage to a private interest, and that is why the city cancelled the RFP because if it hadn’t cancelled the RFP then the winning bidder would’ve been the non-preferred entity […] You know, this looks hinky,” said Perkins. “You had a relationship with one entity, you thought that entity was going to win the bid, when it turned out that – at least in the back and forth that we see according to the record – that the math was wrong, and when the math was correct and somebody else was going to get the bid, then we cut off the process. That the big picture is the articulated violation. The question of how we calculate consideration and everything tells us whether or not they’re correct about the violation. That’s not what is the violation.”
As a rebuttal, Riches clarified that the gift clause violation at hand is the city’s subsidization of one private entity. He called for declaratory relief, and a mandamus on the city.
He emphasized the fact that Swim Neptune was the mathematical winner of the city’s procurement evaluation – not Scottsdale Aquatic Club. This would’ve been cause to award Swim Neptune the bid, yet Scottsdale didn’t. Instead, they threw out the RFP.
Riches warned that this case would prove to be the basis for other cases around the state concerning government’s preferential treatment and relationships with private entities.
“If the city of Scottsdale can do this with public resources – [then] they can do this throughout the state,” asserted Riches.
After the hearing, Riches told AZ Free News in a statement that they were pleased with the court’s handling of the case.
“The Gift Clause prohibits the use of public resources by private parties unless certain protections are met. Here, the City of Scottsdale set up a public procurement process for a valued public asset – public swimming lanes – but then arbitrarily tossed the results when it did not like the outcome. That is unlawful and costs Scottsdale citizens $284,000 every year,” explained Riches. “We were glad to see the court of appeals grapple intelligently with these serious questions, and we are hopeful the court will stop the city’s taxpayer abuse in this case, and discourage future abuse going forward.”
The judges indicated that they would publish their ruling soon.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
The National Education Association’s state affiliate tried to harass and intimidate Rhode Island mom Nicole Solas into silence just for trying to find out what her daughter would be taught in kindergarten by filing a legally baseless lawsuit against her. The union even went so far as to seek emergency relief from the court to circumvent the public records law and prevent Nicole from receiving public information.
Today, the union withdrew its baseless request for emergency relief. Nicole has contended since the union first filed this case that the union has no standing and no legal right to bring the action. The union’s voluntary withdraw of its motion appears to recognize the union’s flimsy legal standing.
Earlier this year, Nicole began making public records requests to find out her daughter’s kindergarten curriculum—doing just as her school district asked her to do. But for making these requests, she was stonewalled and even threatened with legal action. The Goldwater Institute made an additional records request on her behalf—and in response, the South Kingstown School Committee hit her with a $74,000 bill to get the information she sought.
The NEA had asked for a preliminary order from the court that would direct the South Kingstown School Committee to stop responding to Nicole’s public records requests. But today, the union withdrew its extraordinary request, and the School Committee now must still meet its statutory deadlines and other requirements to respond to Nicole’s public records requests.
“Nicole and every parent has every right to know what is being taught in their children’s classrooms,” said Goldwater Institute Director of National Litigation Jon Riches, who represents Nicole. “The union’s reprehensible attempt to harass and intimate Nicole and other parents was seen today for what it is—a legally baseless assault that will not stand.”
On Thursday, the Arizona Supreme Court ruled that Proposition 208 (Prop 208), the voter-approved increase on income taxes to fund public education, was unconstitutional and remanded to lower court. If that trial court determines that Prop 208 exceeds the constitutional spending limit, then Prop 208 would be killed. Chief Justice Brutinel authored the opinion.
The case, Fann, et al. v. State of Arizona, et al., challenged one major provision of Prop 208 and the circumstances of its approval.
First, the case questioned how Prop 208 exempted itself from the Arizona Constitution’s provisions on tax revenue spending caps, or the Education Expenditure Clause.
Brutinel ruled this aspect of Prop 208 unconstitutional. The chief justice made sure to note that this ruling rendered the other aspects of Prop 208 unworkable and unseverable. Meaning, no part of Prop 208 is enforceable if the trial court concurs with the Arizona Supreme Court’s opinion.
“We hold that the direct funding provision does not fall within the constitutional definition of grants in article 9, section 21 of the Arizona Constitution, and Prop. 208 is therefore unconstitutional to the extent it mandates expending tax revenues in violation of the Education Expenditure Clause,” wrote Brutinel. “Likewise, the remaining non-revenue related provisions of Prop. 208 are not separately workable and thus not severable.”
Second, the case challenged tax impositions made by voter initiative. The plaintiffs cited the Arizona Constitution’s Tax Enactment Clause, which stipulates that tax changes must be approved through a two-thirds vote by the state legislature.
The court disagreed with this assessment.
“Additionally, we hold that Prop. 208 does not violate article 9, section 22 of the Arizona Constitution (‘Tax Enactment Clause’), because that clause does not apply to voter initiatives,” wrote Brutinel. “Therefore, the bicameralism, presentment, and supermajority requirements found therein are inapplicable to Prop. 208.”
The Goldwater Institute, Snell & Wilmer, and Greenberg Traurig filed the lawsuit on behalf of the 11 plaintiffs: State Senate President Karen Fann (R-Prescott); State Senators David Gowan (R-Sierra Vista) and Vince Leach (R-Tucson); Arizona House Speaker Russell Bowers (R-Mesa); State Representatives Regina Cobb (R-Kingman), John Kavanaugh (R-Fountain Hills), Steve Pierce (R-Prescott); Montie Lee of Lee Farms; Dr. Francis Surdakowski; NO on 208; and Arizona Free Enterprise Club.
In a statement, Goldwater Institute Vice President for Litigation Timothy Sandefur classified the ruling as a win.
“Today represents a major victory for the hardworking taxpayers of Arizona,” said Sandefur. “The justices made clear that the state constitution’s limits on spending—which were added to the Constitution by the voters themselves—cannot be simply ignored, as Prop. 208’s funders attempted.”
Governor Doug Ducey concurred that this ruling signaled that the end was near for Prop 208.
“There is a clear legal path to Prop 208 being knocked down entirely, it’s only a matter of time,” tweeted Ducey. “The out-of-state proponents of this measure drafted bad language, and now they are paying the price.”
Proposition 208 (Prop 208) tacked on 3.5 percent to the existing 4.5 percent income tax for individuals making over $250,000 or couples making over $500,000. Previously, Arizona’s income tax rate was capped at 4.5 percent for individual incomes above $159,000 or joint incomes above $318,000. The revenue from the income tax increase would fund a wide variety of educator salaries and programs.
About 52 percent of Arizonans voted in favor of Prop 208 last November, and about 48 percent voted against it.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
