Phoenix on Way to Becoming Valley of Corporate Handouts

Posted on June 16, 2004 | Type: Press Release
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PHOENIX - The Phoenix city council will vote this afternoon on whether to build a 1,000-room downtown hotel at public expense. If approved, Phoenix residents will foot the bill for the estimated $350 million project.

 As Goldwater Institute fiscal policy analyst Satya Thallam wrote last year, "If Phoenix were really keen on improving its appeal to convention planners, it would push to lower the room tax on hotels." Instead, the project would force taxpayers to assume the risk of a private business venture. Other cities around the nation that have undertaken similar projects have done so to their financial peril. A Myrtle Beach, S.C. hotel that opened in January 2003 has created a fiscal crisis for the city, and led mayor Mark McBride to caution, "My only advice to the city of Phoenix would be to stay out of the hotel business."

 

The project is also constitutionally suspect. Article IX, section 7 of the Arizona Constitution, commonly referred to as the "gift clause," was designed to ensure that the public treasury would not be depleted by such speculative adventures.  Mark Brnovich, director of the Goldwater Institute Center for Constitutional Government, says, "The city council is gambling with taxpayer dollars to benefit a single corporation. The proper role of city government is to level the playing field and let others build."

 

Contacts:         

Mark Brnovich, Director, Goldwater Institute Center for Constitutional Government, (602) 462-5000 x 232, mbrnovich@goldwaterinstitute.org

 

Andrea Woodmansee, Director of Communications, Goldwater Institute, (602) 462-5000 x 226, awood@goldwaterinstitute.org

 

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