Let's let voters decide whether public funds should bankroll political campaigns

The case against matching funds under the state’s publicly funded elections scheme received a hearing in the U.S. Supreme Court yesterday. The justices asked poignant questions that demonstrated that matching funds actually suppresses free political speech rather than amplify it.

On a state level, SCR 1025 continues to make its way through the legislative process, and I’m hopeful voters in 2012 will get the opportunity to pull the plug on publicly funded elections altogether.

But there’s an argument floating around making the claim that backers of the SCR are somehow not shooting straight with voters by not explicitly using the term “clean elections” in the proposed ballot language.

Please. If there was ever an electoral misdirection play, it was by using the moniker “clean elections” in the first place when the scheme came to Arizona in 1998.

If the advocates of the status quo were so concerned about calling the election scheme for what it is, they could have come up with host of other names for it when the scheme was designed over a decade ago. Besides accurately calling the system Publicly Funded Elections, they could have also used:

• Less-than-free speech campaigns
• Fund-your-opponent elections
• Use public dollars to buy a margarita machine elections
• Game the system by running traditional to trigger matching funds for your friends elections

Let’s pass the SCR and let the voters decide whether they want public dollars to continue to be used for junk mail and yard signs.

S.B. 1070 losing popularity...with Swedes.

I had the opportunity this week to speak before the Swedish-American Chambers of Commerce about the state of the Arizona economy and what’s happening in policymaking circles.

Later in my presentation I touched on immigration.  To get a sense of how much the attendees knew about the issue, I asked how many of the people there had heard of S.B. 1070. Over 50 percent of the attendees raised their hands and the rest let out an audible groan.

I’ll freely admit that I did not anticipate the firestorm of controversy that sparked after the passage of S.B. 1070 last year. But a room full of Swedes knowing about our state’s immigration issues was a stunner.

The immigration bills the state Senate just rejected helped our state avoid a public relations black eye. Let’s continue to concentrate on passing legislation that highlights the good things about Arizona and helps grow our economy.

Let's be honest: Union dues and PAC contributions are different

Employees should be able to decide whether they want to support an employer’s or union’s political agenda. On that, the business community is in agreement.

Union members’ rights should be protected by ensuring that union funds used for operational expenses are segregated from the funds used for political purposes, while seeing to it that union members can prevent their dues from being used for political purposes.  A worker shouldn’t have to help bankroll a union’s agenda that he or she finds objectionable.  A number of states have such paycheck protection laws, with Alabama having passed such a law in December.

But now a group that claims to support the paycheck protection concept is attempting to derail paycheck protection in the Legislature by throwing up nonsensical arguments against an amendment that would draw a distinction between deductions for union dues and deductions for political action committees.

When an employee chooses to participate in a political action committee’s agenda, the contributions are, by law, voluntary contributions. The same cannot be said for a union’s political agenda.  Because general union dues and those monies used for political purposes are not segregated, an employee's hard-earned money can end up being used by the union to support or oppose causes contrary to the employee's desires.

There’s no mystery when an employee makes a PAC contribution - they are required to be publicly disclosed in campaign finance reports; the employee expressly knows  it’s going towards a political agenda. That’s the very nature of a PAC in the first place. That is simply not the case with union dues. 

If we’re going to put a ballot measure with paycheck protection in front of voters, let’s at least be honest that PACs and union dues are two completely different animals.

SME Toolkit Seminar

[Posted By: Katie Whitchurch, Director of Events]

On Thursday, March 24^th we are very excited to host a special seminar on IBM Corporation’s outstanding resource for small and medium sized businesses, the SME Toolkit. This event will take place at the ASU SkySong campus beginning at 9:00 a.m. and will allow participants the opportunity to learn just what it is the SME Toolkit has to offer. In addition to our excellent speakers discussing the many benefits of the Toolkit, attendees will have the chance to network with other like-minded business leaders from across the state and will be entered to win great raffle prizes, including a set of Arizona HR compliance books, and tickets to upcoming Arizona Chamber events. The event is being promoted in part by our community partners: the American Indian Chamber of Commerce of Arizona, the Arizona Hispanic Chamber of Commerce, the Arizona Small Business Association and ASU SkySong.

What makes this website unique and why we think this event is so important, is that the Toolkit offers resources for everything  that a small business owner needs to get a company off the ground or to expand a currently existing company. In an economy with soaring unemployment rates, we believe that a website dedicated to putting software, business forms, tools and training, all for free(!), into the hands of Arizona’s business leaders is a necessity. The SME Toolkit provides these resources for every aspect of business development, from accounting & finance to marketing and sales, human resources to technology, everything is covered.

I hope you will be able to join us on the 24^th for this timely and informational event. Registrations are still being accepted, so be sure to get yours in today.

Business community comes together to craft sensible unemployment insurance fix

The Great Recession has taken its toll on Arizona’s Unemployment Insurance Fund. In fact, the demands placed on the fund have been so great due to high job losses that the fund last year became insolvent.

The UI system is one in which state and federal government, under the Federal Unemployment Tax Act (FUTA), come together to fund the benefits system.  The cost is borne by Arizona employers via a .8 percent FUTA tax on the first $7,000 of an employee’s wage.

So in order to be able to continue to pay jobless claims, Arizona in March 2010 began borrowing over $300 million from the U.S. Department of Labor to replenish the fund, joining 31 other states that found themselves in a similar situation.

Nearly $190 million of the loan has been paid back to the federal government, but a hefty balance remains.  In the fall of last year, the Department of Economic Security approached the business community to help develop a plan to repay the loan.

The group that came together was a broad representation of employers from across the state. In addition to the Arizona Chamber of Commerce and Industry, it included other chambers of commerce large and small as well as industry-specific trade associations. Working with DES, our coalition created a solution that’s represented in House Bill 2025, sponsored by Rep. Bob Robson of Chandler.

The bill calls for a temporary, two-year assessment, beginning in the fourth quarter of calendar 2011 of .4 percent this year and .6 percent in calendar year 2012 on the first $7,000 of taxable wages per employee.

I want to be clear: this proposed solution is not a tax.  It’s a repayment of a loan.  If we don’t repay the loan by November 2012, Arizona faces having its current FUTA tax structure overhauled by the federal government, and the costs heaped onto employers could be steep, potentially doubling the current per-employee cost. The Arizona chapter of Americans for Prosperity, one of the capitol’s most vocal taxpayer advocates, cites the potential action Washington could take on Arizona business in its rationale for taking a neutral stance on the bill.   

Nobody is thrilled about the idea of an increased assessment on employers, but we face no good choices.  Either we attempt to control our own destiny by implementing this temporary action that Arizona employers can plan and budget for, or we wait for a solution to come from Washington. 

Based on DES estimates, a temporary short-term assessment like the one in HB 2025 should be sufficient to bring Arizona’s UI fund into solvency without incurring additional federal interest and penalties. 

The Chamber thanks Rep. Robson for his leadership on this issue. The assessment is temporary, it’s not a tax, Arizona employers support it and it will prevent us from relying on the whims of the federal government. Passing this bill is the responsible thing to do.

Washington operating under alternate reality

Perhaps the federal government is operating in an alternate reality. 

A March 5 article in the Wall Street Journal, “Local Governments Keep on Paring Payrolls,” looks at how states and localities last month shed a combined 30,000 jobs, and payroll pressures will become more pronounced as federal stimulus dollars soon run out.

But the last paragraph is a telling look at how Washington manages its budgets in a fiscal crunch: Federal government employment has risen by 99,000 workers since the beginning of the Great Recession.

Pension reform bill solidifies system, protects taxpayers

by Glenn Hamer

February 11, 2011

Speaker of the House Kirk Adams is walking the talk at the Capitol with his calls for major reforms to the state's pension system.  The speaker has already withdrawn from the Elected Officials Retirement Plan, and this week he introduced House Bill 2726 (public retirement systems; plan design) which aims to put the state's public retirement plans back on stable footing.

The speaker's legislation comes on the heels of a series of articles last November by Arizona Republic reporter Craig Harris that found that Arizona's pension system is costing the state and local governments nearly $1.4 billion annually.  To put that in perspective, that's more money than the budgets for higher education and the corrections system. 

In announcing his reform plan, the speaker acknowledged last June's report by the Arizona Chamber Foundation, Pension Tension: Understanding Arizona's Public Employee Retirement Plans.  That paper found that at the beginning of the decade, Arizona's pension funds enjoyed a cumulative $4.7 billion surplus.  Since that time, however, asset growth has been unable to keep pace with the liability growth caused by a number of factors, including an expanding government workforce, rising salaries and legislative action that increased benefit levels. As a result, the $4.7 billion surplus has become a $10.4 billion deficit.

The changes Speaker Adams is proposing aren't just cosmetic.They are real, substantive reforms that are necessary if, as the speaker has said, we want that teacher who spent years of service in the classroom to have a stable retirement.

First, the legislation would require Arizona State Retirement System employees hired starting in July to work until they were 62 with 10 years or more of service, or until age 65 with less than 10 years of service, before they could retire with full pension benefits.

Currently, ASRS employees can also retire when they reach 80 points, which is determined by adding an employee's age to his or her years of service.  That number is scheduled to increase to 85 for employees hired after July 1.  HB 2726 would eliminate the points option.

The bill also would force ASRS employers like cities and school districts to make payments into the pension trust when they rehire ASRS retirees. Currently, employers make no payments into the pension system for these so-called "double-dippers" who draw a salary at the same time they're collecting a pension.  School districts, for example, could still hire back experienced teachers, but no longer would they be able to do so without making a contribution to the pension system.

The speaker seeks to put an end to automatic cost of living adjustments in all of the state's public employee pension systems.  Three of the four Arizona public pensions see annual COLAs irrespective of the state of the economy or the health of the particular fund.  The decision to increase an annual pension payout would be made by the Legislature and the governor through the regular appropriations process under the Adams plan. The lawyers will be gearing up over this one. Colorado, Minnesota, and South Dakota all passed legislation that reduced the size of COLAs for current retirees, and all three states were sued. 

Another big change the bill proposes is to, over a five-year period, bring state employer contributions in line with employee contributions.  Whereas ASRS matches employee contributions 1:1, some funds make a nearly 3:1 employer to employee contribution. By bringing all pension system employer contributions in line with the ASRS levels, the funds will become more stable while lessening the burden on the state employer, thus protecting taxpayer dollars.

The Adams plan also brings the elected officials retirement plan back to the real world.  There's no reason taxpayers should be funding extra generous retirement plans for elected officials.  

Shaking up the status quo when you're sure to face stiff opposition from entrenched public employee unions takes courage.  But if we want to ensure that our teachers, police officers and firefighters have retirement benefits they can count on in the future while protecting taxpayer dollars, then serious reforms are needed now.  Kudos to Speaker Adams for taking up the fight.