Like most Arizona cities, Phoenix is in desperate financial shape, faced with severe cuts in essential public services. But somehow it found the money to pay tens of thousands of dollars to a private law firm to appeal the CityNorth decision to the Arizona Supreme Court--which, if it "wins," will cost the taxpayers $97.4 million in subsidies to the developer. No wonder the City is in such a financial mess.
What's worse, the voters had a referendum of sorts in the last City Council election, when every single candidate in a contested race opposed the CityNorth deal. But the three who won--Thelda Williams, Michael Nowakowski, and Maria Baier--all voted to appeal the decision to save the corporate welfare they opposed at election time. Only Council member Tom Simplot, who opposed the original deal, voted against an appeal.
Mayor Phil Gordon, who used to oppose such subsidies before he embraced them, offered feeble justifications for the appeal. The ruling might affect the City's support of Boys' and Girls' Clubs, he said. Nonsense: the Arizona Supreme Court already has addressed such issues in the context of government support of nonprofit hospitals and K-12 scholarships.
Nor does the Court of Appeals decision striking down CityNorth affect economic development agreements in which cities reimburse developers for public infrastructure or maintain ownership of the property. All it does is hold that subsidies that go into a developer's pocket to build a project for the benefit of the developer violate the Arizona Constitution's ban on gifts of taxpayer money.
It is a decision worth applauding, not appealing. In times when taxpayers and their governments are strapped for cash, the last thing we need is to lavish subsidies on a luxury shopping mall.
Clint Bolick is the director of the Goldwater Institute's Scharf-Norton Center for Constitutional Litigation.
Goldwater Institute: Turken v. Gordon (CityNorth subsidy case)
Phoenix Business Journal: Phoenix to challenge appeals court on CityNorth subsidy