December 13, 2017

Howdy, Friends O’Farley…

One quick editorial statement: Victory in Virginia and Alabama has paved the way for victory in Arizona next year.

This Farley Report will include lots of discussion of public finance. There’s even a bar chart. I am well aware that many folks tune out when numbers come up. But I believe Farley Report readers pay attention.

Which is important, because the corporate lobbyists who pick our pockets in the Senate Finance committee each week depend upon folks ignoring what they are doing with our state revenues. But It’s time for change, so I’m laying it out for you.

But first, the Pledge Break…

—> I am doing everything I can to be your next governor. This election offers the best opportunity in years to create real change in Arizona. Imagine our state as a light unto the nation, not a joke on late-night television. A place where public education is fully funded and everyone has quality, affordable healthcare and the opportunity to work at a livable wage. This future is within our reach, but I need your help in two ways:

1) Please contribute what you can. We are up against the Koch Brothers’ favorite son and we will need thousands of small donations to defeat Ducey’s few huge ones. December 31 is the deadline for our first reporting period, so your contributions NOW will be leveraged and multiplied in strength because the first fundraising number we show publicly in January will help national donors in their funding decisions for the rest of the campaign. With your help, we win. This is our time.

2) Please sign my nominating petition to help me qualify for the ballot in November 2018. Please tell your friends and ask them to sign my petition. The first step to bringing change to Arizona is to put me on the ballot! The only way we win this is together, and I am honored to have your support. You can find my petition here.

—> Our efforts to stop the rise of economic inequality in our state got a lot tougher with the passage of the federal tax bill through the US Senate last week, which will help the rich get dramatically richer at the expense of the rest of us.

Former “deficit hawks” voted to increase the national deficit by $1.5 trillion in next ten years. It’s only a matter of time before the same folks claim there is no money for education, transportation, healthcare, or other programs to help middle class folks and small business.

When a right-wing interest group brought their tax bill roadshow to Arizona, Governor Ducey gave a full-throated endorsement of the bill on the Capitol lawn with TV cameras rolling.

Members of the media challenged the Governor on whether that meant he supported items in the bill like the elimination of deductions for adopting a child, student loan interest, and teacher supplies. He replied that his endorsement of the bill was not meant to be an endorsement of the contents of the bill.

Like his endorsement for the Graham-Cassidy Affordable Care Act repeal, he urged passage of the bill without knowing what was in it, or how badly it will hurt Arizona. What mattered was that the Koch Network of funders had publicly announced last June that they would not hand out their promised $400 million in campaign help for Republican candidates until those candidates repealed the Affordable Care Act and enacted huge tax cuts for corporations and the rich. The facts of the bill didn’t matter to Governor Ducey. All that mattered was that his big out-of-state donors got what they wanted.

His fundraising goals aside, it’s also no coincidence that Governor Ducey was one of the tax bill’s greatest cheerleaders given that he is a master of this flavor of fiscal flimflam here in Arizona.

He has continued along a pathway well-trodden by previous governors and legislative majorities who have given away our money in tax cuts for special interests, out-of-state corporations, and the rich for decades now, then claimed they had no choice but to cut the programs and services we all need to thrive.

We have reduced corporate income and property taxes by billions since 2009. While we were insisting that there was not enough money to fund basic inflation and enrollment growth costs for our public schools during the Great Recession, the legislative majority used those education cuts to fund unprecedented corporate tax breaks that have done nothing to increase jobs or raise wages.

Thanks to the federal tax bill, what we have already seen in Arizona is what we will face across the nation. Vital services for our people will be cut to reduce a deficit that was intentionally created to benefit political donors and create a fiscal crisis. Our society cannot function on this trajectory, so we must vote for change in 2018.

—> I have an update on the scandal I shared last week wherein Governor Ducey created an artificial deficit by firing most of our corporate tax auditors — the folks at the Department of Revenue who collect taxes owed by corporate tax cheats.

Most of us play by the rules and pay our fair share. Those who don’t need to be caught and made to pay up to keep the system fair for us all, and to maintain the revenues we need to fund schools, roads, healthcare, and public safety.

I just received a briefing from the Joint Legislative Budget Committee nonpartisan economists that showed a new deficit projected for the current and upcoming fiscal years, created in large part by the drop in audits and resulting in corporate tax collections at their lowest level since 1993.

Here’s a graphic I created from public data of corporate tax collections over the last ten years — yes, that little stub of collections for 2017 represents a full year— Ducey’s first year in office. That’s an 82% drop. It’s hard to avoid the conclusion that Governor Ducey is following his DC conservative friends’ playbook for “starving the beast” while rewarding corporate tax cheats.

But it’s the rest of us Arizonans that get hurt when 52.8% of Arizona teaching positions are now vacant or held by someone without proper training, because credentialed teachers can’t afford to teach in our state anymore. Or by the roads that aren’t being resurfaced. Or by the jobs being lost when companies look elsewhere to locate their businesses because they can’t find trained workers. It’s time we put Arizonans first.

—> Another way revenues to public education have been reduced is the growth of tax credits. There is a statutorily required Joint Legislative Income Tax Credit Review Committee, on which I have been the only appointed member over the past two years. In previous years we met to review and sometimes recommend the elimination of tax credits that were not widely used or not demonstrating a public benefit. This is an important oversight role.

In each of the last two years, the controversial tax credits for private school tuition were due up for review. In each of those years, the committee did not meet — a report was issued to “members” (only me) but not reviewed in a public hearing.

A new committee membership was appointed by Senate and House leadership last week after an article pointed out that I was the only member remaining. Sadly, the newly constituted committee will also not meet.

Luckily, I can provide you with a public link to the report that would have been reviewed in the committee. You will note that JLBC makes clear in this report that the private school tax credits need legislative changes to allow more data collection in order to prove or disprove the assertions of the proponents that these credits save the state money rather than bleed money from our public school system. I’m hoping this session we can enact new legislation to collect that data and call their bluff.

—> Speaking of lack of oversight, Director Greg McKay of the Department of Child Safety (DCS) announced last week that he is eliminating citizen oversight boards that have increased accountability for the last 21 years as a “streamlining effort”

In general, I had been impressed of late by Director McKay’s leadership in appearing to turn the corner on administering an agency that has struggled with large caseloads and too many children in the care of the state. The numbers have indeed looked better, although there is still a major problem with caseworker turnover.

But this move raises major alarm bells. The improvement in DCS metrics has resulted directly from increased public accountability. Eliminating public oversight is a terrible move that threatens to put kids at risk.

Illustrating the importance of transparency and the tendency of DCS to slide back into secrecy, the Republic revealed today in an article that a 7-year-old girl from Goodyear was killed while she was subject to multiple DCS reports. Reporters had asked about the details of this case in early fall, but were told the agency could not comment. DCS only revealed the details two hours before a press conference designed to promote improvements in child welfare over the last two years.

Citizens need to know if we are succeeding or failing in protecting our kids. Secrecy fails us all. Director McKay and Governor Ducey should immediately rescind this terrible move to eliminate citizen oversight.

—> In case you missed it, I was prominently featured in the Washington Post Sunday front page lead story above the fold on November 25, as the reasonable voice of reason defending higher education in America against attacks by President Trump and his supporters, personified in the article by our old friend and former senator Frank Antenori.

The article is well worth reading — it effectively sets out the threats we face from those who would tear down some of the most important resources we have to rebuild a faltering middle class and create the industries of the future right here in Arizona.
—> I keep sweeping the state on a nonstop road trip to spread our message of hope for Arizona!

In the last month I have held events in Goodyear, Surprise, Tucson, Flagstaff, Winslow, Show Low, Gilbert, Phoenix, Green Valley, Sedona, Paradise Valley, Tempe, and Saddlebrooke, and have made thousands of phone calls around the state. The energy for change is sweeping every place I visit, and I am inspired by the commitment of all those I meet to work as hard as we can to harvest that energy to create a better future for us all.

Please join our campaign so we can finally get the leadership we deserve right here in the state we love.

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!

December 13, 2017