Arizona Voter’s Guide To The 2018 Ballot Measures

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Arizona Voter’s Guide to the2018 Ballot MeasuresPresented byThe Arizona Advocacy Network Foundation&The League of Women Voters Education Fund

ABOUT THIS VOTER’S GUIDEThe Arizona Advocacy Network Foundation and the League of Women Voters of Arizona EducationFund have jointly prepared this guide to Arizona’s 2018 ballot measures.Voters will be deciding five ballot measures this November. We hope the guide helps you understandthem and reach an informed decision about how you wish to vote on each one.For each measure we have provided: a non-partisan, unbiased summary and background;a summary of arguments made in support and opposition;names of major supporters and opponents;major financial contributors and what they have spent**All statements, pro and con, that were submitted to the Secretary of State for its publicity pamphletcan be read at and-recall.The Joint Legislative Budget Committee has complete information about the fiscal impact of eachmeasure at https://www.azleg.gov/jlbc/18ballot.htm.If you are interested in having a speaker talk to your group about the ballot issues, or to obtaincopies of the guide, please contact [email protected] or [email protected] of ContentsYESNOPAGEProp 125 – Related to Public Retirement System . . . . 5Prop 126 – Protect Arizona Taxpayer’s Act . . . 7Prop 127 – Clean Energy for Healthy Arizona Act . . . 9Prop 305 – Save Our Schools Arizona . 12Prop 306 – Related to the Citizens’ Clean Elections Commission . . 14**IMPORTANT NOTE: Throughout this booklet we have indicated the amount of moneycontributed in support of or opposition to each measure. This information was obtainedfrom the Secretary of State’s website as of September 15, 2018 and is subject to change asnew reports are filed or previous reports are amended.All amounts indicated are rounded. If2no amount is listed, no expenditures have been reported to the Secretary of State. **

ABOUT USAt Arizona Advocacy Network Foundation (AZANF), our vision is a truly representative politicalsystem in which all Arizonans make their voices heard. We believe the cornerstones of such ademocracy are meaningful voting rights and access to the ballot, political decisions driven by votersinstead of money, and a fair and independent judiciary. We work to educate Arizonans about ourpolitical system, and the ways they can make their voices heard, including via ballot measures. Formore information, please visit azadvocacy.org.The League of Women Voters, founded in 1920 as a result of the Suffrage movement, is a nonpartisan political organization that envisions and encourages a democracy where every person hasthe desire, right, knowledge and confidence to participate. We have an advocacy arm and aneducation arm, which NEVER support or oppose any political party or candidate. As an advocacyorganization, the League takes a stand on issues. Our current focus on “Making Democracy Work”consists of protecting voting rights, supporting fair and independent redistricting, disclosing moneyin politics, and passing the National Popular Vote Compact (NPVC). We strive to educate on theissues as fairly and factually as possible, providing all viewpoints. If we have taken a position on aparticular ballot measure in this guide, that position is disclosed in the listing of supporters oropponents. For more information about the League of Women Voters of Arizona (LWVAZ), pleasevisit lwvaz.org.Both AZANF and the LWV Education Fund know that too often the difference between a passivecitizen and an engaged activist is simply lack of information. A core component of our work iseducating voters across the state on issues affecting the integrity and vibrancy of Arizona’sdemocracy.WE NEED YOUR SUPPORT FOR THIS WORK!The Arizona Advocacy Network Foundation and the League of Women Voters Education Fundrely on donations from supporters like you to produce and distribute materials such as thisguide. With your support, we can distribute this information as widely as possible acrossArizona.The AZAN Foundation and League of Women Voters Education Fund are both 501(c)(3)organizations.Contributions are tax deductible!3Online donations are gratefully acceptedat azballotguide.com/donate

WHAT ARE INITIATIVES AND REFERENDUMS?Since 1912, when Arizona became a state, our constitution has guaranteed the right of everydaycitizens to pass laws, veto laws and amend the constitution through ballot measures, orpropositions. Initiatives and referendums are the processes by which these efforts can qualify for avote.A proposition initiated by citizens is known as a citizens’ initiative. To change existing law or enacta new law, supporters must gather valid signatures equal to 10% of votes cast for governor in the lastgubernatorial election. For a constitutional amendment, supporters must gather valid signaturesequal to 15% of votes cast for governor in the last gubernatorial election.A challenge by citizens to a newly-enacted law before it becomes effective is called a vetoreferendum. The challengers must gather valid signatures equal to 5% of votes cast for governor inthe last gubernatorial election. And the signatures must be collected within 90 days of the end of thelegislative session when the law was passed.A majority of the legislature can refer a new law to voters for approval through a referendum, ratherthan sending it to the Governor for his approval. Any constitutional amendment they propose mustalso be submitted to voters as a referendum. No petitions are circulated when the legislature refersnew laws to the voters.Initiatives and referendums from each of these categories appear on this year’s ballot.IMPORTAN T VOTING DATESOctober 9thLast day to register for the November 6th electionOctober 10 thEarly voting beginsOctober 26 thLast day to request a vote by mail ballotOctober 30 thLast day to put your early ballot in the mailNovember 2 n dLast day to vote earlyNovember 6 thGENERAL ELECTION DAY(Polls are open from 6:00am - 7:00pm. You must be allowed to vote if you are in line atthe polling place by 7:00pm.)4

Proposition 125 - Related to Public Retirement Systems - Legislative ReferralWhat is the ballot measure? Proposition 125 will ask voters to approve measures affecting theCorrection Officer Retirement Plan (CORP) and Elected Officials Retirement Plan (EORP) by changingthe formula for determining annual increases.Background: The Arizona Constitution states that “public retirement system benefits shall not bediminished or impaired,” except that the legislature may alter benefits for “prospective members ofpublic retirement systems.” Voters can revise the system, by exercising their power to amend theConstitution.Under current law, CORP and EORP retirees are entitled to permanent annual benefit increases(PBIs) that are tied to returns on investments. Those PBIs may not exceed 4% in any one year.Provisions: Prop 125 would replace the return-on-investments plan with a plan based on an annual costof-living adjustment (COLA) determined by changes in the Phoenix-Mesa Consumer PriceIndex. Those increases cannot exceed 2% in any one year. This change would apply to all members of CORP and EORP, including those who havealready retired and their survivors.Impact:The Joint Legislative Budget Committee estimates that Prop 125 will reduce existing liabilities ofthese retirement plans by 275 million, as current debt is paid off in the next 20-30 years, and as theCOLA change reduces the cost of future benefits.This measure would make the Elected Officials' and the Correction Officers’ Retirement Plan thesame as the Public Safety Personnel Retirement System (PSPRS), which was amended by the votersin 2016.Arguments For: The Act stabilizes and improves Arizona’s underfunded pension system. The Act replaces a faulty pension formula dependent on market returns with a guaranteedcost-of-living-adjustment that is common to most public pension systems.5

In 2016 voters overwhelmingly approved a similar measure reforming the pension system forpolice, sheriff’s deputies and firefighters. This Act brings consistency to the public pensionsystem. Without this measure, state and local governments may have to cut basic services or raisetaxes to cover escalating pension costs, which would harm the state’s economy and futuregrowth. Savings under Prop 125 will accrue to all CORP and EORP employers, which include the state,counties and cities and towns. Savings can be used to fund community services families relyon, like public safety, education, parks and libraries, safer roads and infrastructure.Arguments Against: Retirees and their beneficiaries are entitled to benefits that were promised and earned. Thesebenefits were part of a compensation package that recognized difficult working conditionsand offset lower salaries. It is unfair to reduce benefits retroactively, particularly for retirees on fixed incomes whodepend on these payments. Qualified candidates will be discouraged from applying for jobs if they lack confidence thatfuture benefits will be paid as agreed. Arizona has sufficient revenue to pay the benefits, but would prefer to spend the monies onother programs.Supporters:Arizona Chamber of CommerceOpponents:One person submitted an opposing statement tothe Secretary of StatePublic Safety Personnel RetirementSystem Board of Trustees6

Proposition 126 - Protect Arizona Taxpayers Act - Citizens’ InitiativeWhat is the ballot measure?: The Protect Arizona Taxpayers Act would amend the ArizonaConstitution to prohibit state or local governments from imposing any new tax on “services” orincreasing any existing tax on “services”.Background: Arizona does not impose a true sales tax on businesses or individuals, but rather aTransaction Privilege Tax (TPT). A TPT differs from a true sales tax because it is imposed on theseller, rather than the buyer. This tax often gets passed on to the buyer as a “sales” tax. Certainbusinesses such as retail, construction, professional services, and restaurants are required to paythese taxes. Under current law, a portion of state TPT is distributed to cities and counties and is amajor source of local government revenue.Most businesses that provide services (except utilities, telecommunications, lodging) do not pay theTPT, although there is no formal definition of what constitutes a “service” in state law. The Dept. ofRevenue has considered health care, education, finance and personal care as “services” whenanalyzing how much potential tax revenue is “lost” by not taxing them.Provisions: The state, counties, cities, towns, and other local governments could not increase any currenttax rate being applied to services as of December 2017, and could not add any new tax onservices. The amendment applies to all local governments including charter cities.Impact: There is no way to estimate the amount of revenue that would be lost to the state/localgovernments because of this ballot measure, because at present there are no proposed measureswith any details about what services would be taxed and at what rate.However, in 2017 the Department of Revenue estimated the state could be missing out on 5.2billion by not taxing services. Furthermore the state is currently imposing sales taxes on somebusinesses that could be considered services (i.e utilities, telecommunications, lodging). It is unclearhow these businesses would be impacted by Prop 126.Arguments For: Sales taxes on services are regressive and would hit low-and middle-income families (toinclude senior citizens, the disabled and others on fixed incomes) the hardest. It is almost7

impossible for families not to use services such as haircuts, doctor visits, child care, vetservices, car repairs, etc. A service tax makes Arizona less appealing for commercial recruitment. Low taxation hasallowed Arizona to maintain a competitive advantage over other states, creating more jobopportunities. Prop 126 would preserve the status quo on service taxes - so there would be no impact onArizona’s consumers and businesses.Arguments Against: The state has a significant revenue challenge. Elected officials and policymakers needflexibility to evaluate revenue options in order to meet the needs of our state, counties andcities. Therefore, tax policy should not be written into the Constitution, which is very difficultand time consuming to change. Tax policy should be created by laws. Arizona already has adequate safeguards to prevent a rush to impose sales taxes on services.Raising taxes requires a two-thirds vote from both chambers of the legislature and thegovernor’s signature OR a legislative referral or citizen initiative sent to voters. When the government decides that certain businesses don’t need to pay taxes for any reason,winners and losers are often chosen based on their political power and influence. Our modern economy is becoming a service-based economy, meaning there are fewer andfewer “goods” to tax. So unless we allow the possibility of taxing at least some servicecategories to raise additional revenue as sales taxes on “goods” decline, governments won’tbe able to pay for many things we now take for granted such as transportation, police, fire,public schools, etc. By taxing some services it will be possible to lower the state’s sales tax rate. Otherwise, therewill be ever-increasing sales taxes on life’s necessities (goods) while services for middle classand working families are cut. This amendment is primarily being funded by an association of realtors, trying to getthemselves a permanent exemption from taxation, at the expense of the rest of us.Supporters:Opponents:Relators Issues Mobilization Fund - 5.1 MillionNational Association of Realtors - 1 MillionGrand Canyon InstituteArizona Chapter, Americans for ProsperityArizona Retailers AssociationNational Federation of Independent Busines