Hotel and rental car taxes are like the sunburn after a vacation, reminding tourists that the fun is over and there's a price to pay.
While a little aloe vera helps a painful sunburn, there's not much relief for tourists suffering vacation bills made more expensive by local governments seeking more tax revenue.
But Michael Devine, a tourist from Michigan, is suing for relief after being hit with a one percent levy on his hotel room and a 3.5 percent levy on his rental car. Maricopa County voters adopted both taxes five years ago as part of a plan to finance Glendale's football stadium. Devine contends that taxes targeting out-of-state residents violate the U.S. Constitution, which reserves to Congress the power to "regulate Commerce among the several States."
Devine argues that the rental car tax also violates the Arizona Constitution, which requires taxes on the registration, operation, or use of vehicles on public roads to be used for highway and street projects, not stadiums.
Whatever the merits of Devine's legal arguments, such taxes are simply poor economic policy. Despite promises of economic growth, the consensus among economists is that publicly subsidized stadiums do not improve the local economy.
Taxpayers could use a vacation from bad economic policy.
-Arizona Daily Sun: "Tax for stadium sparks lawsuit"
-Cato Institute: Debunking the Economic Case for D.C. Baseball
-Cato Institute: "The Stadium Gambit and Local Economic Development"
-Arizona Constitution, Article 9, Section 14
Enter the Vikings, those marauders coming to attack your home. At the last moment, you flash your low-interest credit card and the villains stop dead in their tracks. You've likely seen the Capital One bank ads claiming that their credit cards will just as effectively stop high interest rates. The commercial ends with a defeated Viking menacingly asking, "What's in your wallet?"
But a more important question for Arizonans may be "What's not in your wallet?"
As of 2:21 p.m. tomorrow, July 16, the Arizona state government will have already spent $1 billion since the start of the fiscal year on July 1.
That's $1 billion that taxpayers won't be able to spend on things like down-payments on a home, investments in college savings accounts, or just that long-awaited retirement. Instead, the money will go toward expanding state bureaucracies, among other items. For instance, 2006 budgets at the Department of Health Services and the State Land Department are growing by almost 30 percent.
Keeping marauders out of the public treasury may take some doing, but a structural limit such as the Taxpayer's Bill of Rights holds promise. If implemented, the initiative would force policymakers to prioritize spending, reduce the power of special interests, and protect taxpayers.
Visit the Arizona Spending Watch on the Goldwater Institute website to see a running count of how much of the state's $23.4 billion budget has been spent.
Yesterday, the Arizona Department of Education released the 2005 AIMS results. Scores went up across the board-way up in some cases, with districts reporting increases of 30 and even 50 points.
But are these gains the result of student learning or lowering the bar? Every year since 1999, the state has lowered AIMS passing scores or made content easier. Despite those efforts, about 60 percent of high school students taking AIMS for the first time failed in 2002, 2003, and 2004.
After those exams, the state completely overhauled AIMS to make it easier to pass. In 2005 the failure rate was almost halved: about 30 percent of high school students taking AIMS for the first time failed. According to Monty Neill, co-director of the National Center for Fair and Open Testing, "This certainly reeks of manipulating the exam and cutoff scores to come up with the desired results."
Furthering the trend, new legislation adopted this spring lets students use qualifying class grades to raise their AIMS scores, meaning students can pass the test and receive their high school diplomas even if they get half of the questions wrong.
At this rate, everyone will be passing, but will anyone be learning?
Source: Arizona Department of Education
1. Failing percentages represent the combined percentages for the "Falls Far Below" and "Approaches" performance level categories.
2. An average of 47,000 10th graders in district and charter public schools were tested in 2002; 49,000 in 2003; 64,000 in 2004; and 63,000 in 2005. Tenth grade results for 1999, 2000, and 2001 were unavailable
3. These results are for "Category 1" students who are fully English proficient and did not require special accommodations.
-Arizona Department of Education: AIMS Results
- Arizona Republic: "More Kids pass '05 AIMS"
- Arizona Daily Star: "AIMS Scores Improve Significantly Statewide"
- East Valley Tribune: "Whew! AIMS Test Finally Conquered"
A new national analysis of fiscal responsibility among the states gives Arizona state government a "D-." The Fiscal Discipline Report Card, published by Americans for Prosperity Foundation, grades the states' tax and expenditure limits on five objective criteria.
Tax and expenditure limits emerged after the tax revolt of the late 1970s. California governor Ronald Reagan endorsed the first state tax and spending limit, Proposition 1, for California in 1973. Although Proposition 1 failed, it set a precedent for tax and spending limits across the nation. Since then, 28 states have enacted some form of tax and expenditure limit, including Arizona in 1978.
Unfortunately, these tax and spending limits have failed to adequately instill fiscal discipline. According to the report card, 36 states scored D's or F's. Colorado earned the highest grade, an A-, thanks to its Taxpayer's Bill of Rights (TABOR) amendment.
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