During the past decade, the amount of money spent by lobbyists in Arizona has increased dramatically.
From 1997 to 2007, lobbyist spending doubled, according to the Arizona Secretary of State’s Office. In 1997, lobbyists reported spending a total of about $1.8 million, a number that reached $3.6 million by 2007. Total spending from 2008 has not been compiled yet, but fourth-quarter reports from all lobbyists are due by the end of March.
The total lobbyist spending from that 10-year span includes money spent by public bodies, such as cities and towns. Non-public body spending by lobbyists and their clients rose in that period to $1.4 million from $394,000.
A cursory glance at records at the Secretary of State’s Office reveals a generous increase in spending. But the numbers don’t explain why.
Several Arizona lobbyists interviewed by the Capitol Times attributed the gradual rise to a number of factors. Some felt inflation was driving the trend, driving up the cost of things such as meals for lawmakers or employee salaries. Others said there are more people hiring lobbyists than in previous years, and more lobbyists are entering the business to accommodate them.
Many Arizona lobbyists say they haven’t seen significant increases in their spending, and haven’t noticed that trend among their colleagues as well. But inflation, some say, continually drives up the cost of doing business.
Under Arizona law, lobbyists are limited in the things they are allowed to pay for in their dealings with legislators. Gifts of more than $10 are prohibited, and lobbyists cannot treat lawmakers to entertainment, such as sporting events, golf outings or theater shows, unless the lobbyist invites a group of legislators, such as members of a committee, or the entire Legislature as a whole.
But lobbyists are permitted to buy meals for lawmakers, as well as pay for travel, and as with any product or service, inflation has taken its toll.
Don Isaacson, of the firm Isaacson & Duffy, said, “I think if you go to a restaurant like a Durant’s or something that’s a common legislative venue or Capital Grill or Alexi’s or someplace like that, and if you look at the meals 10 years ago versus today, my guess is it’s a doubling in the cost.”
The cost of employee salaries, too, has gone up, said Diane Sikokis, the chief lobbyist for Maricopa County.
“We do end up paying our people a little bit more than we did, say, four years ago or five years ago, something like that. Just the normal incremental increases you might expect to keep good people,” said Sikokis, who is one of more than 70 people listed by the Secretary of State’s Office as an active lobbyist for Maricopa County.
In 2000, the Legislature passed a law banning lobbyists from treating individual lawmakers to things like sporting events or other types of entertainment, allowing them to do so only if they invite an entire body or committee. Such a law might be expected to reduce, or at least stem, the amount of money being spent by lobbyists. But some people have their doubts.
Lobbyist Lee Miller, of the firm Mario E. Diaz & Associates, thinks the increased regulations have had very little impact on the amount of money spent.
“If you are an organization, whether you’re a business organization, a nonprofit organization, an ideologically based organization, that has the resources to try and affect outcomes in the state Legislature, you’ve simply revised, modified and done what you needed to do to comply with all the various rules and regulations,” Miller said. “But I don’t think anybody’s diminished the amount of time or financial resources they put into trying to achieve those outcomes.”
The cost of inflation might help offset increased regulations that limit the ways in which lobbyists can spend money on lawmakers, said lobbyist Michael Racy.
“Overall costs of doing business I think have increased with inflation. Entertainment costs and those sorts of things, if anything, have probably gone down since the newer limits have gone into effect,” Racy said. “Also, things are being kept track of that previously weren’t — what expenditures are being made and what you can spend money on.”
But inflation doesn’t appear to account for the entire increase. According to the U.S. Bureau of Labor Statistics, the $1.8 million spent by lobbyists in 1997 would be equivalent to about $2.3 million in 2007, a far cry from the $3.6 million reported that year.
Another possibility is that the level of spending is going up because there are simply more lobbyists in Arizona. According to the National Institute on Money in Politics, a national watchdog group, there were about 3,500 registered lobbyists in Arizona in 2007. Not all lobbyists, however, are required to submit the quarterly reports that track their spending.
In 1997, there were 833 reporting lobbyists in Arizona, a number that jumped to 944 in 2007. Similarly, the number of principals — clients that are represented from lobbyists — jumped to 1,200 from about 1,000 in that time span, according the Secretary of State’s Office.
Miller said a rising number of organizations, especially nonprofit or ideologically driven groups, have realized the benefits of hiring lobbyists and have increasingly done so. Business interests have long been active in lobbying lawmakers, but issue-oriented groups such as the Sierra Club or Right to Life, are more recent additions to the state-level scene, Miller said, though many have been active at the federal level for many years.
“I think over the last 10 years, organizations like the Sierra Club have come to understand that to achieve the club’s goals and objectives, it’s just as important that they spend time in the 50 state legislatures as it is that they walk the halls of Congress,” Miller said. “And likewise, you have groups like Right to Life and Center for Arizona Policy and Catholic Social Services and whatnot who are very active players in a number of debates that go on at the Arizona Legislature.”
Jim Norton, of the firm R&R Partners, said he hasn’t noticed an increase in the amount of money his firm spends per client, but the number of clients his firm represents has steadily increased over the years. Not all are new to the system, he said, but some are people or organizations that traditionally hadn’t been involved in lobbying.
“In a growing state, you have more principals registered. You have more clients in general, more people watching the Legislature,” he said.
Arizona has certainly seen its share of growth. The state grew from a population of about 4.5 million in 1997 to more than 6.3 million a decade later.
This may also have led an increase in the amount of lobbying conducted by public bodies, such as counties, cities, state agencies and boards, and educational institutions. From 1997 to 2007, the number of public bodies registered to lobby with the Secretary of State’s Office rose to 261 from 233. And many of the public bodies that were already registered increased their lobbyist spending at a steady clip.
Ken Strobeck, executive director of the League of Arizona Cities and Towns, said new communities have formed in the past decade, and older communities have stepped up their lobbying efforts. Public bodies report spending more on lobbying than other principals — some years significantly so — which Strobeck attributes to the fact that nearly every action taken by state government has an effect on c
ounties and municipalities.
“The state and local governments don’t get involved in the day-to-day operations of private businesses, but everything that happens at the state level affects how we’re able to do business in cities and towns, and how we’re able to function with services in our communities,” he said.
Not surprisingly, the biggest spender of the public bodies is Maricopa County, home to more than half of Arizona’s population. The county reported spending almost $136,000 on lobbying in 1997, a number that jumped to $394,000 in 2007.
Sikokis emphasizes that the lobbying money spent by Maricopa County and other public bodies is for employee salaries. For every hour spent by an employee talking to lawmakers about an issue that affects the county, the county lists one hour’s salary for that employee as a lobbying expenditure. The county, Sikokis said, does not do things like take legislators out to dinner or fundraise for candidates.
Strobeck said expenditures by other lobbyists are actually closer to the amounts spent on lobbying by public bodies than is shown by the Secretary of State’s records. The difference, he said, is that lobbyists, unlike public bodies, can donate to political campaigns, and those donations do not have be reported as lobbying expenditures.
“When you take into account campaign contributions, the balance shifts dramatically,” Strobeck said.
Rep. Ed Ableser, for one, is concerned about the increase in lobbyist spending. The Tempe Democrat, who introduced an unsuccessful bill this year that would prohibit lobbyists from spending more than $25 on meals for lawmakers, feels that the fate of proposed legislation is too often a matter of who is spending the most money.
“I think that the goal is to reduce the amount of influence that money has in the policymaking process, which means if there are two competing ideas, the idea with the most money should not win out,” he said. “I don’t buy it that inflation is increasing or that more clients are actually getting into the system. I think it’s the fact that more people have to spend more money to protect their self interest.”
Whether the trend of increased lobbyist spending continued in 2008 remains to be seen. Most fourth-quarter reports have been submitted to the Secretary of State’s Office, and the reports should be compiled soon. Most businesses have seen profits and consumer spending drop as the economy has worsened, and Arizona’s lobbying industry might turn out to be no different.
“From our clients’ perspective, they have been tightening up in the last two quarters on expenditures over and above retainers. So I would expect that you’ll see that probably the next two quarters of ’09, those numbers may come down due to the economic conditions that exist right now in corporate America,” Norton said.
Racy isn’t sure whether the 2008 numbers will show a recession-induced drop in spending, but expects any decreases to be more significant in 2009.
“I’m not sure the ’08 reports will show as much effect as the ’09 reports. I think you may see more (of a decrease) next year,” Racy said. “We haven’t noticed in our firm an enormous difference at this point.”