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Issue: Arizona Association of Realtors

Dems pour money into ousting incumbents in red-hued LD11

Rep. Mark Finchem, R-Oro Valley, and Sen. Vince Leach, R-Tucson, speak with former U.S. Rep. Ron Paul, R-Texas, at the Arizona Capitol on March 8, 2017. Democrats are spending heavily to oust Finchem and Leach in Legislative District 11, an area with a nearly 10-percentage point GOP voter advantage. PHOTO BY GAGE SKIDMORE/FLICKR
Rep. Mark Finchem, R-Oro Valley, and Sen. Vince Leach, R-Tucson, speak with former U.S. Rep. Ron Paul, R-Texas, at the Arizona Capitol on March 8, 2017. Democrats are spending heavily to oust Finchem and Leach in Legislative District 11, an area with a nearly 10-percentage point GOP voter advantage. PHOTO BY GAGE SKIDMORE/FLICKR

The path to a Democratic majority in the Arizona Legislature goes through a few key swing districts that by now have received no shortage of newspaper ink. But an emboldened party, kept afloat by gargantuan amounts of money, is setting its sights beyond the usual suspects, toward districts like the conservative southern Arizona bastion of Legislative District 11.

Democrats are running a single-shot campaign in that district’s House race in the form of Dr. Felipe Perez, a family physician. In the Senate, they’re championing JoAnna Mendoza, a military veteran. Both face long odds – but, as Mendoza has said, in 2020, anything can happen.

“2020 is causing people to pay attention,” Mendoza said. “In another election period, we might not have gotten that same attention.”

Few paid attention to the district before the primaries. But since, national and state Democrats have made LD11 a top target, at least on paper.

Outside spenders have taken note, especially after both Democrats outperformed expectations in the primaries – Perez, for example, received more votes than Rep. Brett Roberts, R-Maricopa. Several PACs, including the Arizona affiliate of Forward Majority, a leading national group in the Democratic quest to flip statehouses, have heavily invested in the district, mostly in the form of attacks against two of the LD11’s three incumbent Republicans – Rep. Mark Finchem, R-Oro Valley, and Sen. Vince Leach, R-Tucson, both among the most conservative members of the GOP caucus.

Ben Wexler-Waite, Forward Majority’s communications director, said previously that pursuing LD11 is part of an “aggressive portfolio strategy” – investing in deep-red districts where single-shot candidates are working to unseat incumbents. In this case, Republicans have a roughly 14,000-voter registration advantage in the southern Arizona district, a roughly 8-percentage point advantage.

JoAnna Mendoza
JoAnna Mendoza

Outside groups spent in September around $38,000 and $37,000 against Finchem and Leach, respectively. Roberts remains mostly unscathed. Perez and Mendoza, meanwhile, have benefited from around $33,000 and $52,000 spent in their favor during that period, respectively.

The theory for Democrats is that Finchem, Roberts and Leach haven’t faced serious challengers from the left, and that voters might be more amenable to a Democratic candidate if they get a fuller picture of their current representation – particularly in the case of Finchem’s ties to organizations like the Oath Keepers, a right-wing group of current and former military and police officers founded by a one-time staffer of then-Rep. Ron Paul in 2009.

“We have a high number of independents in this district who just want to vote for a candidate who shows up for them,” Mendoza said.

Showing up is important. Democrats say that the district’s current Republicans, who all fall into the party’s most conservative wing – Finchem is even making a bid for House speaker to elevate the platform of that cadre – have lost sight of the need to govern.

Those conservatives have lost sight of the desires of voters in the district who may have once supported southern-Arizona moderates like former Congressman Jim Kolbe, a centrist Republican who represented the area during his tenure, said Joshua Polacheck, the newly anointed executive director of the Pima County Democratic Party.

“We believe that a lot of the people that would have been considered Republican-leaning independents are becoming truly independent,”  Polacheck said. “The Tea Party movement a decade ago, the current administration in Washington, the Q-Anon movement, the takeover of the (state GOP by Chairwoman Kelli Ward), we believe has alienated people.”

Felipe Perez
Felipe Perez

Finchem isn’t worried about increased spending by progressives in his district, saying voters in the heavily Republican LD11 share his pro-business and conservative leanings.

“At the end of the day, we’re engaged in action, action, action,” he said.

He’s also not concerned, he said, about criticism over his affiliation with a hard-right organization.

“They will make the fatal mistake that they always make,” Finchem said. “When they go negative, it turns voters in my district off. They don’t have any solutions. All they have is complaints.”

He said that anyone who’s taken an oath to support and defend the U,S, Constitution is “by definition” an Oath Keeper, and that he certainly wouldn’t be denouncing his organization if the Democrats don’t denounce Antifa and Black Lives Matter, which Finchem claims has deep ties with the Chinese Communist Party, a theory that has since been debunked. “If they want to play the socialist games of gaslighting people, fine. My constituents are smarter than that,” Finchem said.

Republican groups have marshaled around the district’s incumbents, especially Leach. Arizonans for Strong Leadership, a PAC affiliated with Arizona Gov. Doug Ducey, has spent $37,261 to support Leach, while the Arizona Association of REALTORS has spent heavily to support both Finchem and Leach.

Last election, Democrats saw LD11 as unwinnable, but strong returns for Dems in the primaries drew eyeballs and changed the calculus, Perez said. He hopes that a strong year for Democrats and his medical credentials might propel him to victory. What might help is between 2018 and 2020, the Democratic Party added nearly 10,000 voters in LD11, more than the roughly 7,000 new voters that the GOP registered

Perez said he’s surprised to see the volume of outside money materializing in the conservative district.

“A lot of folks are energized by electing new leadership,” Perez said. “There’s a realization that people know how directly their state government can impact them.”

Democrats have “the momentum and the resources” to play in more districts, said national Democratic Legislative Campaign Committee President Jessica Post in a statement. The organization has elevated the race to one of its top priorities in the state, adding it to a list of top races in swing districts like Legislative District 6 and Legislative District 20, which each present clearer paths to victory for Democrats – this means more campaign resources and staff for Perez and Mendoza.

Of course, the party has other priorities. Democrats only need to win two House seats to flip that chamber, and LD11 is hardly the most likely place for that to happen. But with all the money that’s flooding into the state, Charlie Fisher, the director of the Democratic Legislative Campaign Committee’s Arizona chapter, said he’s not worried about misplaced priorities.

“On my side of the wall, that’s not a concern,” he said. In regards to outside groups, Fisher said he hopes “that they would make these expansion investments after these widely known core districts are fully funded.”

Lawmakers approve wording for 2018 ballot measures

Voters wait in line at dawn to cast their ballot in Arizona's presidential primary election, Tuesday, March 22, 2016, in Phoenix. (AP Photo/Matt York)
(AP Photo/Matt York)

A Republican-dominated legislative committee decided Wednesday that voters don’t need to be told that if they approve a business-backed tax-limiting measure the state could be foregoing more than $5.2 billion a year in revenues.

There is no dispute that the constitutional amendment being pushed by the Arizona Association of Realtors would bar lawmakers from expanding sales taxes to cover any services that are not now subject to the state’s 5.6 percent levy. Even legislative budget staffers concluded that if all services were taxed it could generate $5.2 billion a year in new revenues on top of the approximately $10 billion now raised in state sales and income taxes to provide public services, about half of that for education.

At a hearing Wednesday, Devin Del Palacio, a member of the Tolleson Union High School board, said taking future sales taxes off the table and foregoing those revenues should be included in the brochure to be mailed out to all 3.6 million registered voters which explains all ballot measures.

“I would like to know the amount of money that could have been used for teacher salaries, better schools or any other priority,” he told members of the Legislative Council. “I feel that this information could be critical to the decision-making process to allow voters to make an informed decision.”

But the Republicans who have 10 votes on the 14-member panel, instead sided with political consultant Wes Gullett, who represents the Realtors who gathered the signatures to put the issue to voters.

“That’s a speculative, hypothetical thing that might happen in the future and has nothing to do with this amendment,” he said.

The Republicans on the same committee also approved what Democrats say is a biased description of an initiative to hike income taxes on the state’s most wealthy to help fund education.

Most significant, the verbiage adopted by the GOP majority would tell voters that if they approve the #InvestInEd measure to boost taxes on those earning more than $250,000 a year that they also will be increasing their own taxes, even if they earn far less.

That is based on a conclusion that the measure also would effectively repeal a 2015 law that indexes the state’s income tax brackets to inflation. That law is designed to protect taxpayers at all income levels from “bracket creep” where they wind up in higher tax brackets — and paying higher rates — simply because their income keeps pace with inflation.

Democrats said that reading of the initiative is legally flawed. They say nothing in the measure wipes out indexing.

More to the point, they argued that telling voters — they believe incorrectly — that taxes will go up on everyone is designed to deter people from approving the measure which is designed to raise $690 million a year for education.

Republicans also insisted on putting language in the ballot brochure describing the increase in tax rates on high-income Arizonans as from 76 to 98 percent.

“That’s designed to scare people with big numbers,” complained Rep. Ken Clark, D-Phoenix, calling the verbiage “clearly biased.” He acknowledged the increase is mathematically accurate but said it would be more honest simply to say that the actual tax rate on incomes of more than $250,000 is going from 4.54 percent to 8 percent, and 9 percent on amounts over $500,000.

Martin Quezada (file photo)
Sen. Martin Quezada (D-Glendale)

“I think we crossed the line into advocacy,” said Sen. Martin Quezada, D-Glendale. “And I think that’s unfortunate.”

Democrats said Republicans showed the same bias in their refusal to tell voters what it could mean financially if they constitutionally bar sales taxes on services.

By law, the Legislative Council is required to provide “impartial” descriptions of all ballot measures. That is the wording that shows up in mail boxes of voters ahead of the Nov. 6 general election to help voters learn about the issues and make up their minds.

Clark said one thing voters need to know is how much money is involved.

He pointed to a report by legislative staffers that says if the state’s 5.6 percent sales tax applied to health care it would generate close to $2.1 billion. Another $1 billion would flow into state coffers if the levy applied to professional, scientific and technical services,

And the balance is made up in other categories like personal care – think haircuts, nail salons and lawn care – and personal finance, which includes investment advice.

“I think the public would need that context to be able to make a decision here,” Clark said.

Gullett had a different take.

“This just protects the Arizona taxpayer from having to pay a huge new tax on things that aren’t taxed today,” he told lawmakers. He said speculation on what might be taxed in the future without the constitutional amendment – and the amount of money such taxes might raise – is irrelevant and not a proper subject to put in the ballot pamphlet.

Clark countered that voters need to understand what they are giving up.

“The point is, we would not be able to address the changing nature of our economy, which is going more and more towards services,” he said. “That is not clear in this.”

And Clark said it would strip lawmakers of the ability to decide whether to tax certain services that weren’t on the radar two decades ago, like rideshare companies like Uber and homeshare companies like Airbnb.

Speaker of the House J.D. Mesnard, R-Chandler
Speaker of the House J.D. Mesnard, R-Chandler

But House Speaker J.D. Mesnard, R-Chandler, said it would be misleading to tell voters about a possible $5.2 billion in new revenues. He said the actual amount that could be raised would depend on what services lawmakers decide to tax – assuming that voters do not remove the constitutional right of legislators to make those decisions.

Separately, the same committee approved a description of a ballot measure to require half of all power generated in Arizona by 2030 come from renewable sources. That, too, provoked controversy as attorney Jim Barton objected to spelling out in the pamphlet what is not considered “renewable,” including nuclear, and that the initiative would not affect Salt River Project.

There was no debate, however, over the description of a proposed constitutional amendment which would require public disclosure of all sources of $2,500 or more to influence political campaigns.

Money pours into campaigns for, against renewable energy ballot measure

(Deposit Photos/Ras-Slava)
(Deposit Photos/Ras-Slava)

The fight over whether Arizonans get to vote on a renewable energy measure has turned into the clash of the financial titans.

New reports filed with the Secretary of State’s Office shows that Clean Energy for Healthy Arizona has collected nearly $8.3 million. And with the exception of $4.88 put in by a Phoenix educator, every penny of that has come from NextGen Climate Action, the political action committee set up by California billionaire Tom Steyer.

The report drew the expected criticism from Matthew Benson, spokesman for Arizonans for Affordable Electricity, the group that is fighting the measure.

“Steyer will spare no expense in his shameless bid to buy this election and force his costly, California-style energy regulations down the throats of Arizona families,” he said in a prepared statement. By contrast, Benson said the measure is opposed by a “coalition of community leaders, business groups, taxpayer advocates and champions of the working poor.”

But what Benson did not say is that has group has amassed more than $11 million for the fight. And all that money comes from Pinnacle West Capital Corp., the parent company of Arizona Public Service which would have to live with the new regulations should voters adopt them in November.

That’s more than an academic exercise. Benson claims that if the measure is approved it could force the shutdown of the Palo Verde Nuclear Generating Station, managed by APS; that contention is disputed by initiative backers.

Current Arizona Corporation Commission regulations require most utilities to obtain 15 percent of their energy from renewable sources by 2025.

The initiative, which will be Proposition 127 if legal challenges by Pinnacle West to keep if off the ballot fail, sets that goal at 50 percent by 2030. And it does not include nuclear in its definition of “renewable.”

Some of the other ballot measures also are drawing big dollars. But the funding is nowhere near as balanced as the renewable energy measure.

For example, the Arizona Association of Realtors and its national organization already have put $6.1 million into an extensive media campaign for Proposition 126. That measure would put a provision into the Arizona Constitution to forever forbid lawmakers from even considering sales taxes on services, even if it was part of a compromise to lower the overall sales tax rate from the current 5.6 percent.

Its commercials, however, suggest there are forces who are secretly conspiring to raise taxes, warning people that they could end up paying $1,500 a year or more on things like veterinary service for their pets and daycare for their children.

What it also would bar are taxes on many expenses that are less common for individuals, like financial advice, legal help, advertising and public relations.

There is no such effort underway at the Republican-controlled Legislature. But House Speaker J.D. Mesnard, while saying he opposes higher taxes, said he does not think it’s a good idea to hobble future lawmakers who may want to revamp the tax system.

There is no organized opposition to the measure.

Proposition 207 to raise income taxes on the state’s most wealthy has found supporters outraising foes.

The Invest in Ed committee lists $2.3 million in donations, including $1.4 million from the National Education Association. By contrast, the opposition organized under the banner of Arizonans for Great Schools and Strong Economy has raised $1.2 million, with $900,000 of that from the Arizona Chamber of Commerce and Industry.

That measure, if approved, would raise $690 million a year for education, all of it coming from individuals who earn more than $250,000 a year and couples with incomes greater than $500,000.

The campaign to ban anonymous political donations, which will be on the ballot as Proposition 128 if it survives legal challenges, has so far collected $1 million in its effort to put a “right-to-know” provision in the Arizona Constitution, forcing disclosure of all donations of at least $2,500.

Officials from several groups that have made “dark money” donations in the past have gone to court to keep the measure off the ballot. But the Secretary of State’s Office reports no actual campaign committee has been formed to fight the initiative.

 

Prop 127 triggers record-setting spending

California billionaire Tom Steyer has spent more than $18 million so far in his bid to convince Arizonans to support a constitutional mandate that half of all electricity come from renewable sources by 2030.

And that doesn’t even count the nearly $4 million he has put into efforts to oust some Republicans from office, particularly Attorney General Mark Brnovich.

New campaign finance reports show that the fight over Proposition 127 is shaping up to be the most expensive in Arizona history.

It isn’t just what Steyer, through his NextGen Climate Action Committee, has put into getting the measure on the ballot and promoting it.

On the other side of the equation, the parent company of Arizona Public Service, the state’s largest electric utility, has poured $21.8 million into quashing the measure.

APS isn’t alone.

In this photo taken Wednesday, June 27, 2018, environmental activist & billionaire Tom Steyer poses at his offices in San Francisco. Arizona’s largest utility is fiercely opposing a push to mandate increased use of renewable energy in the sun-drenched state, setting up a political fight over the measure funded by Steyer. (AP Photo/Eric Risberg)
In this photo taken Wednesday, June 27, 2018, environmental activist & billionaire Tom Steyer poses at his offices in San Francisco.  (AP Photo/Eric Risberg)

Rural electric cooperatives have put another $417,000 into their own campaign to convince their voters and ratepayers to reject the initiative. And UniSource Energy Corp., parent of Tucson Electric Power, has a separate $50,000 campaign against Proposition 127.

All that eclipses the record set in 2002 when Native American tribes put $21.1 million into a successful initiative campaign to give them the exclusive right to operate casino-style gaming in Arizona in exchange for the state getting a share.

That same election the Colorado River Indian Tribes spent $10.3 million in their failed effort to get voters to adopt a different measure that would have provided for more types of gambling and less revenue sharing with the state. And the horse and dog track owners spent $7.7 million supporting their own proposal which would have allowed them to have slot machines as well.

The massive spending on renewable energy comes as each side hopes to convince voters — and ratepayers in particular — of the financial implications of Proposition 127.

APS in particular is relying on a study it commissioned at Arizona State University. There, economists, working with assumptions provided with the utility, said that by 2030 customers could see up to another $1,900 added to their annual utility bills if the mandate is approved.

Prop 127 supporters got their own report from the National Resource Defense Council which predicts that the lower cost of solar would mean residential bills would go down about $360 a year by 2030.

Renewable energy isn’t the only thing commanding a lot of campaign cash.

The Arizona Association of Realtors and its national organization reported it had built up a fund of $8 million in its support of Proposition 126.

That measure seeks to alter the state constitution to make new sales taxes on services permanently off limits. Proponents, operating under the banner of Citizens for Fair Tax Policy, have run extensive commercials arguing that “politicians are looking for more money” and that, without a constitutional ban, “they’re going to do it by taxing veterinary services, health care, every service they can find.”

A newly formed No on Proposition 126 committee had not collected or spent anything as of the end of the campaign filing period.

The other hot-button issue on the ballot has to date not gathered anywhere near the dollars of the first two.

Save Our Schools has so far spent $426,000 on its bid to get Arizonans to vote “no” on Proposition 305.

This measure is a referendum of 2017 legislation which would expand who is eligible to get vouchers of state dollars to send their children to private and parochial schools.

Until now, those vouchers, formally known as empowerment scholarship accounts, have been limited to students with special needs, foster children, children living on reservations and those attending public schools rated D or F.

The Republican-controlled Legislature voted to remove all those preconditions, a measure signed — and supported — by Gov. Doug Ducey. But in a political compromise, they agreed to cap the number of vouchers at about 30,000 by 2022.

Foes of expansion gathered enough signatures to block the change from taking effect until voters get to ratify or reject it at the ballot this year.

A group called Yes for Ed AZ has spent about $26,000 so far to convince people to vote “yes” and allow the law to take effect. It is being financed largely by the Center for Arizona Policy and the Goldwater Institute.

Much of the money for the Save Our Schools campaign committee comes from a similarly named group set up as a “social welfare” organization which can take individual and corporate donations without disclosing donors.

There was no immediate response to a request for a list of major donors to that organization.

Proposition 306, by comparison with the others, has gathered relatively little publicity — and relatively few dollars.

One provision would bar candidates who get public funding from using those dollars to buy services from political parties. But the potentially more far-reaching part of the measure would subject the rules adopted by the bipartisan Citizens Clean Elections Commission to oversight by the Governor’s Regulatory Review Council. And that panel consists of people appointed by Doug Ducey, who has been a beneficiary of the kind of anonymous donations that the commission has adopted rules to force donors into the open.

Proponents have collected $10,500, most of that from the Arizona Free Enterprise Club, an organization that has provided financial help to elect candidates of its choice but has refused to disclose its donors.

Foes have organized under the name of Arizona Advocacy Network Against the Dark Money Lobbyist Power Grab. They have collected slightly more than $4,900, with more than half of that coming from Tom Collins, the executive director of the Clean Elections Commission.

Realtors assail Rep. Mitchell despite membership in group

Rep. Darin Mitchell, R-Litchfield Park, said requiring Arizona Department of Corrections officers to be U.S. citizens would help ease unemployment in his district, which stretches to Yuma. (Cronkite News Service Photo by Juan Magaña)
Rep. Darin Mitchell (R-Litchfield Park) (Cronkite News Service Photo by Juan Magaña)

The Arizona Association of Realtors is campaigning against one of its own members with negative ads attacking Republican Rep. Darin Mitchell.

The ads, launched by the Responsible Leadership for AZ PAC, blast Mitchell, a Realtor from Goodyear, as one of several “very concerning candidates” in Legislative District 13, where Mitchell is running for re-election to the House of Representatives.

That claim in the ads lumps Mitchell together with Republican Trey Terry, who’s running on a slate with Mitchell for the district’s two House seats, and with ousted lawmaker Don Shooter, who’s running for the state Senate. The ads, and the website, go on to accuse Mitchell of unpaid debts and a state income tax lien, and drum up an ethics complaint filed against him by House Democrats in 2016.

Beyond the low-hanging fruit of election attacks, the website created by Responsible Leadership for AZ – darinmitchelltooliberal.com – also hits Mitchell for supporting and sponsoring legislation that the Realtors opposed.

The Arizona Association of Realtors is the sole funder of Responsible Leadership for AZ, to the tune of $500,000 since December 2017.

The attacks have drawn the ire of another Realtor-slash-lawmaker, Rep. Mark Finchem. He, too, was snubbed by the Realtors’ endorsements.

And Mitchell’s campaign consultant claims the Realtors are trying to drum up reasons to attack Mitchell to influence an intra-party race for speaker of the House.

Nicole LaSlavic, vice president of government affairs at the Association of Realtors, said such claims are “purely speculation,” and don’t reflect the association’s decision to back a GOP challenger over Mitchell in LD13.

The Realtors instead endorsed Rep. Tim Dunn, R-Yuma, and GOP challenger Joanne Osborne.

“I know that neither (Mitchell nor Finchem) necessarily agree with it because they’re taking the position that they’re incumbents. But the reality is, there’s an impact on their votes,” LaSlavic said. “Just because they’re a member of our association doesn’t mean that we fall in line, necessarily, with backing them every time.”

Of chief concern for the Realtors is a bill Mitchell sponsored earlier this year. HB2507 would have barred homeowners from obtaining attorney fees if construction defects arise in a new home. The Realtors opposed the bill, which was never given a vote on the House floor.

LaSlavic said it’s only the latest example in a series of legislative efforts that Mitchell, though a Realtor, has supported despite the Association of Realtors opposition.

“I would say that for any member of the Legislature, if they’re going to sponsor legislation or vote for legislation that we do not agree with, the likelihood is that we’re not going to respond favorably to that,” she said. “Their membership doesn’t buy an automatic endorsement.”

Chris Baker, a campaign consultant for Mitchell, said the Association of Realtors is trying to find reasons to hide its true intentions. The Realtors were neither for nor against a similar bill Mitchell introduced back in 2015, Baker said.

“This is about the Realtors Association putting their thumb on the scale in the speaker’s race,” Baker said.

Mitchell is one of two Republicans vying to be the next speaker of the House. The other, Rep. Rusty Bowers of Mesa, was endorsed by the Realtors.

The Association of Realtors may have been neutral on Mitchell’s bill in 2015, but they were registered as opposed to it in 2018, when LaSlavic described it as the “most recent and probably the most concerning (bill) that we’ve had in the last few years.”

And while the Realtors may have backed Mitchell in the past, “people can change,” LaSlavic said.

As for Finchem, the Oro Valley Republican said he was livid that the Realtors Association would go negative on one of its own members, particularly when the money funding the attack ads comes from the Association of Realtors’ political action committee, known as RAPAC, which Realtors make contributions to.

FInchem demanded a refund from RAPAC and an apology for going after Mitchell with made up “innuendo and unproven accusations,” though the website attacking Mitchell provides documentation supporting those accusations.

The ad against Mitchell, Finchem wrote in a letter to the association, “would destroy the working relationship that Realtors have enjoyed with members of the House and Senate and would forever change the reputation of the Realtor community.”

Baker said the Association of Realtors had singled out Mitchell, and isn’t going after other candidates who have sponsored legislation the organization opposes. For example, Finchem may not have drawn Realtors’ endorsement in LD14, but unlike in Mitchell’s race, they endorsed no one, not even his GOP primary opponent.

Both Mitchell and Finchem have even cosponsored bills that the Association of Realtors supported, though Finchem voted in committee for HB2507.

“They’re going to try to make this about specific pieces of legislation,” Baker said. “The bottom line is if they were in the business of going after people off random pieces of legislation, they would be going after a lot of other Republican members. They are not.”

LaSlavic reiterated that being a Realtor does not ensure the association’s support.

“Darin Mitchell and Mark Finchem supported and voted for legislation that our trustees adamantly opposed, and because of that, based off their voting record, that’s why the position is not in their favor,” LaSlavic said.