The Farley Report from Phoenix #257: 10-10-16

This is the last monthly Farley Report before the November election. Early ballots will be in your mailboxes this week. 

While much public attention has been given to the utterly foul would-be dictator at the top of the Republican ticket (when was the last time an American — not Russian — presidential candidate promised to jail his chief political rival once in office?), we need to focus a good portion of our action on creating positive change in Arizona.

After the Farley Report Pledge Break, I’ll be sharing with you the latest developments that underline why we need to flip the Arizona Senate RIGHT NOW to stop the ongoing plans of Governor Ducey to dismantle our state’s ability to function. I need your help.



If you have been waiting to contribute to our efforts to elect a new majority to the Arizona Legislature, NOW IS THE TIME TO ACT!

—> Please contribute to the ADLCC (Arizona Democratic Legislative Campaign Committee) and your investment will be spent in the most effective manner that will get us the majority. National groups have stated that the legislative chamber most likely in the country to flip red to blue is the Arizona Senate; we need the resources to help make that happen. Gov. Ducey is spending more than $300,000 in anonymous dark money to keep his current majority in the Senate. 

Counter his private corporate money with your public individual contributions.Contribute what you can to the ADLCC right now to give our candidates what they need to be part of a new dawn for Arizona. 


—> While all eyes are on elections, Arizona state agencies and departments are looking toward the upcoming legislative session by submitting their budget requests to the Governor’s office. 

After years of devastating cuts to education, childcare, child safety, environmental protection, transportation, and much more, one would expect some effort on the part of department heads to ask for restoration of programs that are vital to the citizens of our state, especially now that we have a bit of surplus in the bank. 

But we are seeing further reductions coming from these departments in their initial requests. Why?

I have heard from insiders that Governor Ducey has instructed all department heads to cut back everywhere so that he can have more money available to eliminate the state income tax.  

Yes, that’s right. Governor Ducey wants to slash state services further in order to eliminate the one piece of our revenue structure that is progressive (those who earn more pay more) — and eliminate approximately $4,000,000,000 from state revenues each year.

Perhaps the Governor does not believe that’s a problem, despite the desperate needs of our schools, transportation, and child welfare systems. In fact, the current majority has already slashed $4 billion from our annual revenues in tax cuts enacted since 1996. What’s $4 billion more? Answer: A whole lot when we are already last in the nation in state support for K-12 public education, more than 18,000 kids are in the care of the state, and our transportation finance picture is in freefall.

What’s more, state income tax is currently being paid primarily by the 12% of Arizonans earning more than $100,000 a year. The governor would effectively slash the taxes paid by the richest Arizonans while increasing the taxes paid by the rest of us and gutting the services we need. 

What have we received for all the tax cuts previously enacted by this group of tax-the-poor supply-siders? Not a whole lot. We are one of the slowest growing economies in the country and wages and job growth are stagnant. There is no accountability for existing corporate handouts, but evidence points to the only effect being a loss of revenues for the state. In fact, the Joint Legislative Budget Committee (JLBC) just projected that we will lose another $796 million from the general fund over the next three years. 

This is money that could be invested accountably in our schools and community colleges and universities. This would give all of our citizens the education they need to be able to better both themselves and our economy at the same time. Education is the best way we have ever discovered to lift our most vulnerable citizens out of poverty. In the long run, that dramatically reduces government spending as well.

If you give away the store to the richest Arizonans, Governor, how will you pay for that education Step Two that you promised you would support?

—> While Governor Ducey is pursuing this massive tax break for the richest among us, he is also trying to make the state safe for corporate tax cheats. Behind our backs, he effectively eliminated corporate taxes by firing all but four of the corporate tax auditors at the Department of Revenue. Four auditors for all the businesses in Arizona. 

JLBC — the nonpartisan group of economists who advise the Legislature on budget issues — look at an auditor hire as a net positive for the state. They may cost around $80-100,000 to hire, but each new auditor is estimated to bring in an additional $720,000 in revenue for Arizona. So why fire them unless you are pursuing an economic development strategy of attracting corporate fraudsters to the Grand Canyon State? Perhaps we can convince Enron to try again in AZ? 

This is utterly astonishing, especially right on the heels of a more-or-less permanent tax amnesty for Arizona corporations who had already been caught and were in the audit process. This gubernatorial green-light for folks considering tax fraud will cost us millions and millions of dollars each year that could be going to our schools. 

Here is last Wednesday’s story from the Arizona Capitol Times. It’s worth quoting at length:

Are the wheels coming off of the Dept of Revenue? Georganna Meyer, the agency’s former chief economist who is now a senior economist at the Maguire Company, said historically, DOR would have about 30 corporate auditors monitoring between 50,000 and 60,000 companies. She just learned that the auditors are down to only four, and that’s a problem, she said during a meeting of budget analysts and economists this morning. The department laid off 52 staffers in June, and a majority of them were collectors and auditors in DOR’s education and compliance division. Meyer said she doesn’t know exactly how much the auditors, when they are at their historical staffing levels, contribute to revenue collections, but she attributed between $50 million and $100 million to their enforcement activity. Meyer fears that’s how much the state might be losing after DOR let go of so many auditors and collectors. “Yesterday, I got a response that they’re down to four corporate income tax auditors, which says to me that basically, there is no corporate income tax auditing occurring,” she said. Meyer said the auditors exist to keep corporations, particularly the larger ones, honest about their tax filings. Every few years, those companies – the “really, really big guys” – get audited, she said. “That can’t possibly be happening now due to the limited staff,” she told reporters. But what makes her think folks aren’t being honest? After all, the state has a voluntary system of reporting tax obligations? “I worked for the Department Of Revenue for 30 years,” she said. “There’s a population out there that it is important to monitor because what they can get away with, they will. Human nature, right?” she quipped. 

When Governor Ducey told us he wanted to run Arizona like a business, perhaps he meant like one of Donald Trump's businesses?

Governor Ducey needs a check on his power. A new majority in the Arizona Senate would stop these raids on the state treasury. We all should benefit from the actions of our government, not simply the Governor’s friends. 


—> There is one department that asked for a new line item, the Department of Water Resources. They are seeking $80,000 for a PR effort to convince Arizonans that we have plenty of water, so we shouldn’t worry about conservation. 

Here’s how they justify it:  “Because of Arizona’s arid climate, the state is often perceived as ‘running out of water.’ This perception causes concern for many Arizona residents and businesses looking to locate to the State.” 


This seems to sum up the governing philosophy of the Ducey administration. If you face an inconvenient truth, tell people it’s not true. 

A couple of weeks ago, he crowed in a press release about the federal government approving a new waiver for the Arizona Medicaid program which he proclaimed as nation-leading “reform” to help people in poverty with healthcare. Problem was, none of that was true. In fact, the Feds had rejected the most important parts of his waiver — his attempts to kick people in poverty off healthcare after five years, and require them to work in order to have coverage. 

I just wish Governor Ducey would spend more time trying to help reduce the pain of poverty and eliminate its root causes instead of punishing people for being poor. 

—> Good governance involves coming to agreement on the identity of our problems while fashioning good solutions out of ideas from both sides of the aisle. We cannot continue to deny the existence of problems while plowing on ahead without including the public and all legislators in the agenda-setting and the solution.  

If we elect a different legislative majority in November, good governance will make a comeback. A Democratic Senate — achievable with only three more seats — means that all sides will have to work with one another to get anything done, and that is a best-case scenario for all Arizonans, no matter what your political leanings.  

That’s why this legislative election is so important. If you haven’t yet registered, or want to check your registration, today is the last day. You can do this online here.

I was honored yesterday to be endorsed by the Arizona Daily Star for re-election for the District 9 Senate seat, and grateful they also endorsed my House teammates Randy Friese and Pamela Powers Hannley. Please tell your friends and family to vote for the whole LD9 team so we can move our state forward at last.

It’s time. 

Thanks for your continuing faith in me as your Senator. 


Steve Farley

Senator, District 9, Tucson

If you like my representation and want to keep me in office, CONTRIBUTE TODAY!