The Farley Report from Phoenix #220: 2-25-15

This week I will be telling you the story of a behind-the-scenes organization that wields tremendous clout here at the Capitol and is seeking to attack public education budgets across the state in the name of "tax fairness," and what you can do to stop them. Please read and pass along this week's report. I need your help.

Meanwhile, if you want to get a sense of the past week (hint- the Legislature has returned to form) please visit my Facebook page for a whole lot of legislative-related media reports, underreported news, and vibrant discussion on topics including:

--> The defeat of my ban on driving while texting bill (and my vulnerable user bill to protect cyclists, pedestrians, construction workers, first responders and more) on the floor Monday with all Republicans voting no, and all Democrats voting yes. Later during that floor session, also along party lines, the majority passed an amendment from Kelli Ward (R-Havasu City) to legalize the possession and use of sawed-off shotguns, silencers, and nunchucks without needing to get a federal permit. Presumably the answer to stopping texting drivers is taking nunchucks to them?

--> My visit to the TUSD school board meeting last night where I confronted rogue board member Michael Hicks for his earlier testimony asking the Senate to approve SB1371 which would eliminate $64 million a year in court-ordered desegregation funds from his own school district. I publicly asked him to resign. KOLD-13 reported that he responded by cursing out several of his constituents after he stalked out of the room.

--> The return of the Legal Tender bill, making gold and silver in any form legal for use as money in AZ, and exempting any gold or silver sales from any form of tax. 

--> News that the same dark money organization that helped elect Ducey is now paying for misleading robocalls against public school superintendents who dare to oppose Ducey's proposed cuts to education. They will not reveal their funders. Private prison corporations, anyone?

--> A Cronkite News investigative report showing that 44% of Democratic bills in the Senate were assigned to the difficult hurdle of having to pass 2 or more committees plus rules, but only 11% of Republican bills faced that fate. 

So you can see that my Facebook page is a great place to go for up-to-the-minute briefs and discussion on breaking legislative news between your Farley Report fixes. Check it out and engage!

--> In this week's Report, my focus is an organization called ATRA -- the Arizona Tax Research Association -- which is not well-known outside Capitol circles. Why should you care? For 70 years, they have advocated for reduced taxes for Arizona's largest corporations. This year they are the ones behind SB1371, which wants to take away $64 million from TUSD and $211 million from 19 school districts across the state by eliminating all desegregation funding, regardless of existing federal court orders. 

They are also behind HB2442, a bill that would cost Pima Community College $30 million a year (and increasing over time) by recalculating their expenditure limit. This would not reduce anyone's taxes, but simply leave PCC without the legal authority to spend that portion of the money that they collect. 

For decades, they have brought bills before the legislature -- most of them successful -- to reduce the funding sources of school districts, public health districts, library districts, fire districts, flood control districts, transportation districts, and much more. 

Why on earth are they doing this? And who is paying for it?  

ATRA is a 501c4 organization, which means it does not have to reveal its funders. However, analysis of their sponsorship materials and board of directors reveals something astonishing. 

Who funds them? 

You do.

The major players in ATRA are the major business property owners in the state, including all the major utilities. The money they are paying to ATRA to bankroll efforts like these to slash education and other vital pubic services comes from the money YOU pay them in your utility bills. 

When you pay your monthly bill to Tucson Electric Power (TEP), Salt River Project (SRP), American Public Service (APS), Southwest Gas, Cox Communications, CenturyLink, and AT&T, part of that money goes to help ATRA slash school funding. You can see the board of directors here.

I suggest you call them up, and let them know how you feel about your money going to such a purpose, and share that it undercuts their hard-earned image of community service. And you might suggest to them they can start to get on your good side again by telling them to tell ATRA to withdraw their support for SB1371 and HB2442, among other bills. You can find their contact info later in this email.

Why are they doing this? Read on for an ATRA primer.


The unassuming building to the left is ATRA headquarters. It is no accident that it is the closest non-governmental building to the Capitol. That closeness over the years has developed into a relationship wherein ATRA staff (who are in fact lobbyists) are treated by the legislative majority as if they were legislative staff. 

The omnipresent ATRA figure around here is Kevin McCarthy. I believe Kevin is a good man, a man of integrity. His knowledge of state finance issues is immense, and I have learned a lot from him over the years. He has a sincere desire to make state finances less messy and more rational and fair. 

I worked closely with him (and SB1371's sponsor Sen. Debbie Lesko) to reform the TPT sales tax collection and audit system in AZ to make it easier for businesses to pay their taxes with less hassle. I was invited to speak to the decidedly Republican audience at their annual conference last year where I told them that it is time to stop prioritizing tax cuts and start prioritizing education if we want our economy to thrive. 

The problem I have with Mr McCarthy is when he pushes for "fairness" without regard for the practical effects of his proposed changes on the services that our citizens need, particularly education. This is the case for SB1371. He believe is it a "fairness" issue that the desegregation districts get "extra" money that surrounding districts don't get. But his "fair and equitable" solution is not to raise the surrounding districts to the same level, it is to cut all districts to the lowest common denominator. 

Education gets cut even more in the name of "fairness" because the purpose of ATRA is to lower corporate (especially property) taxes. In ATRA's own words from their website, 

"Membership in ATRA is an investment toward the efficient and effective use of your taxpayer dollars, and therefore, an investment impacting every individual's and business' bottom line." 

It's about large corporate ATRA member's "bottom line". More money for the biggest utilities, mines, communications companies, and less for public schools. 

To be fair, Mr McCarthy has taken some gutsy positions over time that fit with his fairness doctrine. He opposed Prop 108, which requires a 2/3 majority to raise taxes, but only a simple majority to lower them. He remains firmly opposed to dramatic across-the-board property tax cuts like California's devastating Prop 13 because of the imbalance that brings to the system with owners of similar property paying wildly different rates. He is not simply a tool of his funders. 

But when he brings ideas for rebalancing the revenue picture to the Legislature, the majority eagerly approves tax cuts but refuses to even consider ideas about any revenue increases to offset those cuts, and we consequently end up in our structurally imbalanced situation today wherein we have cut $4 billion annually since 1990 from our revenues and face a $1 billion deficit this year as our education system reels from five straight years of slash-and-burn.

And his corporate backers like this just fine because it helps their "bottom line". Until you speak up, that is. 

Call the ATRA funders today -- the ones that you pay through your monthly bills -- and tell them since you help pay for ATRA, you would like them to tell ATRA to kill SB1371, HB2442, and any other bill that has the effect of cutting education funding. Here are some helpful numbers for you:

For all of these, please ask for the Government Relations department.

Tucson Electric Power (TEP): 520-571-4000

Salt River Project (SRP): 602-236-5900

American Public Service (APS): 602-250-1000

Southwest Gas: 602-395-4142

Cox Communications: 623-594-1000

CenturyLink: 520-838-3000

Let me know on my Facebook page how it goes.

Thanks for your continuing faith in me as your Senator. 


Steve Farley

Senator, District 9, Tucson