Goldwater Institute

In an Arizona Republic article, reporter Justin Juozapavicius explains how the Mormon Church and Dennis Barney, a private developer, are slowing turning around a drug-infested Mesa neighborhood.

Proponents of eminent domain have long argued that the power to seize private land is necessary in order to rid cities of blight. But the Founders of the nation designed eminent domain to allow the government to build roads, bridges, and other improvements for "public use."

As Mr. Barney is demonstrating, revitalization of blighted areas need not require the government to forcibly seize and evict private property owners. Such improvements can be made voluntarily, as developers negotiate with landowners to purchase and redevelop property.

The U.S. Supreme Court is expected to issue a decision this June in the case of Kelo v. City of New London, which, with any luck, will clarify and constrain local governments' authority to use eminent domain as a tool to help developers.

A front page story in the Arizona Republic discusses the possibility of a state trust land proposal making it to the ballot in 2006. The proposal would amend Article X of the Arizona Constitution, which requires that state trust land be sold to the highest bidder for the benefit of public schools, and add provisions for various aspects of land management, including designating lands for conservation, determining how and which lands will be brought to market for development, and providing for managing long-term leases for farmers and ranchers.

But a recent Arizona Supreme Court decision opens the possibility that such an initiative will be removed from the ballot.  In  Clean Elections Institute v. Jan Brewer,  the Arizona Supreme Court removed an initiative from the ballot that had been signed by over 200,000 voters, saying that the initiative violated the so-called single-subject rule.  In thwarting the will of the people, the court established a dangerous precedent.  Any constitutional proposal that uses "and" in linking sections or clauses may not withstand constitutional scrutiny.  Those who cheered the Court's action in removing the initiative aimed at eliminating public subsidies for political campaigns would be wise to remember that those who foolishly sought power by riding the back of the tiger ended up inside.

Arizona Republic columnist E.J. Montini wants to call a spade a spade, but instead of unearthing the facts, his analysis throws up a lot of dirt about Arizona private schools.

Montini likens the proposed "parental educational choice grant program" to "robbing the public schools." The reality is the typical public school district spends between $8,500 and $9,000 per student on average-twice the price of a typical Arizona private school. Letting parents use just half of what we'd spend anyway to educate children in a traditional public school would therefore yield a savings. For example, if just five percent of Arizona public school students, about 40,000, used K-8 grants worth $3,500 and high school grants worth $4,500, the total savings to the state and local school districts would amount to $32 million. (See A Guide to Understanding State Funding of Arizona Public School Students)

Montini also alleges that there are only "so many private schools available. Usually in the nicer parts of town. Which perhaps indicates who may benefit from this program."

The fact is there are approximately 400 private schools statewide, from Apache Junction to Yuma. Based on National Center for Educational Statistics data, in each of Arizona's 30 legislative districts, there are an average of 12 private schools, educating anywhere from 375 to 7,500 students. Absent private schools, taxpayers in each legislative district would have to pay an additional $20 million annually on average to educate those children in public schools.

Key findings from the Goldwater Institute's 2004 survey also show that among Arizona private schools:

- 89 percent offer financial aid 
- 93 percent require annual standardized testing
- 13 percent of staff is in administration, compared to 50 percent in public schools 
- Student/teacher ratios average 14:1, compared to 18:1 in public schools 
- 43 percent of Arizona private schools surveyed serve special needs students, and nearly half have room for more 
- Special needs students constitute an average 11 percent of total private school enrollment-the same average percentage of Arizona public school students enrolled in Individualized Education Programs

To learn more about admissions practices, enrollment, standardized testing practices, tuition, financial aid, school size, and growth potential of Arizona private schools, see the Goldwater Institute's first annual survey of Arizona private schools, Survey of Arizona Private Schools: Tuition, Testing and Curricula.

Entrepreneurs are a hardy bunch. They may start their own businesses for a variety of reasons, weathering any number of adverse conditions to make it work. One thing they have in common is a willingness to take risks. Lots of people have good ideas, but how exactly do we encourage people to turn those ideas into businesses? One way is to cut taxes.

According to a recent study, "a reduction in the marginal tax rate on entrepreneurial income of one percentage point would increase probability of entry into entrepreneurial activity by 1.42 percentage points for single filers and 2.0 percentage points for married filers." Perhaps more interesting however, are what tax burdens do to active entrepreneurs. "A marginal tax rate reduction of one percentage point on entrepreneurial income reduces the probability of exiting entrepreneurial activity by 17.32 percentage points for single filers and by 7.81 percentage points for married filers."

The study, Taxes and Entrepreneurial Activity: An Empirical Investigation Using Longitudinal Tax Return Data, released by the U.S. Small Business Administration's Office of Advocacy, examines the relationship between marginal tax rates and individuals' decisions to start their own businesses and. It shows that even minor increases in tax burdens can suppress a significant amount of entrepreneurial activity.

Entrepreneurship is an inherently risky endeavor, and people willing to go into business for themselves discover a variety of innovative ways to both mitigate those risks and accept them. As we all know, however, taxes are an unavoidable dampener on the incentive to engage in self-employed activity even the best new product will be disincentivized by taxes. So it behooves policymakers to consider all the would-be start-ups they are forgoing when they increase tax burdens. Moreover, they should consider the liberating effect of decreasing tax burdens, unleashing latent entrepreneurial talent.

That a person can have a great idea, the ingenuity to turn it into a business idea, and the drive to put in the hard work to get it done, only to be foiled by the marginal tax rate, it's enough to "make a grown man cry."