Ballot proposal would kill cap on interest rates

Voting ballot box isometric vector icon with paper sheet

Calling it a “stand against socialism,” a proposed constitutional amendment would give banks, finance companies and other lenders free rein to charge whatever interest rates they want to Arizona customers.

The initiative being pushed by the National Credit Alliance would overturn virtually all laws that now limit annual interest charges to 36 percent.

“I think that’s a market decision,” said Sean Noble, the campaign manager of the ballot measure. “If you can find somebody to give you a lower interest rate than somebody else, then that should be a competitive marketplace.”

If approved at the 2020 election it also would override another ballot proposal to cap interest rates on title loans.

Sean Noble
Sean Noble

But the measure would have much more far reaching implications.

It would put a provision into the Arizona Constitution to bar state and local governments from prescribing, limiting or otherwise regulating any prices for any private transaction. That would preclude not just future price caps but overturn some existing laws, like a 2018 measure that prohibits credit reporting agencies from charging fees anytime someone wants to freeze or unfreeze their credit.

It also could undermine laws that limit the ability of towing companies to refuse to release a vehicle because the owner does not pay.

And any other existing law that sets limits on what private companies can charge customers would be summarily wiped off the books.

As crafted, the measure would leave untouched the 2016 voter-approved law requiring private companies to pay their workers $11.50 an hour, a figure that goes up automatically next year to $12. But it would make future ballot measures to alter wages unconstitutional.

Noble is the president and founder of American Encore, the successor group to the Center to Protect Patient Rights which was financed by the Koch brothers.

“We need to take a stand against socialism,” Noble told Capitol Media Services about the proposal.

“The entire message of the Democrat Party this cycle is drifting more and more to the Left,” he said. “This is an attempt to have that great debate between economic freedom and free markets and socialism.”

Noble acknowledged a state constitutional amendment would not shield Arizona from anything occurring on the national stage and any federal laws that may be enacted. But Noble said that this measure would help protect Arizona from the kind of changes in state law that he said have been proposed at the ballot for the past few years or are pending now.

Chief among them is a proposal that some groups hope to get on the ballot in November to cap the interest rates that can be charged by title loan companies at 36 percent. Current title loans can carry an annual percentage rate up to 204 percent a year.

If both measures were to qualify for the ballot and get voter approval, the title loan measure would not take effect, as constitutional provisions trump statutory changes.

That fact did not go unnoticed by those seeking to curb title loans.

“This is a radical money grab by out-of-state loan sharks,” said Rodd McLeod, campaign consultant for the title loan measure. He also called it unprecedented.

“We’ve had usury laws in this country for hundreds of years,” McLeod said, including in Arizona. “That’s because people want to make sure that loan sharks can’t charge any interest rate they want.”

To date, Noble’s campaign to change the Arizona Constitution, operating under the name of Arizonans for Financial Freedom, has not publicly listed any sources of its funding. Noble did acknowledge that the money spent so far to craft the measure comes from the National Credit Alliance which he describes as a professional organization based in Ohio representing banks and other lenders in Arizona and elsewhere.

It will take a fair amount of money to hire the paid circulators to put the measure on the 2020 ballot. Backers need 356,467 valid signatures on petitions by July 2 to qualify. Then there’s the cost of a campaign.

There are some exceptions to what would be covered.

One thing that would remain untouched is Arizona’s ban on “payday loans,” a form of short-term lending that can carry interest rates higher than 400 percent that used to be legal here. Noble said that was intentional, pointing out that Arizonans went to the polls in 2008 and voted to kill off that industry.

“To the extent we can we want to appreciate where voters have spoken,” he said.

The measure also would not affect the ability of the Arizona Corporation Commission to set the rates that utilities can charge their customers. Tax rates also would not be subject to the constitutional provision, with an exception for regulations “reasonably necessary to remedy a public emergency.”


California union seeks pay raise for Arizona hospital workers

hospital  doctors620

A California union is funding a measure in a bid to convince Arizona voters to force hospitals here to pay their workers more.

An initiative drive being launched Monday would mandate that everyone working at a hospital get an immediate 5 percent pay hike if the measure is approved by voters in 2020. There then would be successive 5 percent pay increases for the following three years.

Rodd McLeod, spokesman for what’s being dubbed the Healthcare Rising Arizona campaign, said that would apply at all levels, including medical staff, nurses, social workers, orderlies and even custodians. And with a prior voter-approved state law already mandating a $12 an hour minimum wage beginning in January, that would put the base salary for hospital workers after the fourth year at $14.59.

McLeod said it is in the public interest to raise hospital wages, even if it does raise costs for hospitals and, potentially, by extension for patients who do not have insurance.

Higher wages are just part of what is being promoted by the campaign financed by the Service Employees International Union. The initiative, if it makes the ballot and is approved, also would:

put provisions directly into Arizona law to ensure patients can get coverage for prior existing conditions; impose new infection control protocols for Arizona hospitals; institute a more comprehensive law than now exists to protect patients from “surprise” medical bills.

A spokesman for the Arizona Hospital and Healthcare Association declined to comment.

This isn’t the first ballot foray by the California branch of the union.

But McLeod said the fact that this is being proposed and financed by an out-of-state organization − one with a history of doing battle with hospitals − should not deter Arizonans from supporting it.

“We have a health care system that costs a lot of money and doesn’t deliver results that are as good as they could be,” he said.

McLeod said the measure, if enacted, will improve patient protections, saying that 99,000 people a year get “serious infections” in hospitals.

Then there’s that issue of surprise billing, with patients admitted to hospitals after checking their insurance coverage, undergoing a procedure and only later finding out that someone on the medical team, like an anesthesiologist, isn’t on hospital staff, isn’t part of the insurer’s “in-network” providers, and doesn’t accept what the insurer is willing to pay.

A new law that took effect earlier this year addresses that in part by setting up a procedure for patients and doctors to have disputes resolved. But McLeod said that still doesn’t prevent the surprise bills in the first place, and only covers disputes of more than $1,000.

Potentially more significant would be language prohibiting insurers from denying coverage for patients with prior existing conditions.

McLeod noted that Arizona Attorney General Mark Brnovich is among those trying to get federal courts to kill the Affordable Care Act. If successful that lawsuit also would wipe out the requirement to cover preexisting conditions, as Congress has yet to enact a replacement if the litigation is successful.

But a key part is the issue of salaries for workers at all levels, at least those below management.

“Arizona has among the highest turnover rates for hospital workers in the country,” McLeod said. “You have one in five leaving for jobs in other states or leaving for other professions because the salaries are so low.”

That, he said, results in worker shortages which, in turn, affects patients.

“I sat in the emergency room waiting for a long time because there’s not enough people to handle the work,” McLeod said.

He said the initiative is at least related in part to the fact that there are fewer and fewer people in unions who can engage in collective bargaining on issues like salaries and working conditions.

“I think there’s a real desire to use creative problem solving to figure out how to improve people’s standard of living and the quality of health care,” McLeod said.

The California-based United Healthcare Workers West branch of the SEIU is no stranger to the ballot process here.

This is the same group that sought in 2016 to cap the pay of hospital executives at no more than what the president of the United States is paid, or $450,000 a year. But after gathering what it claimed was more than 281,000 signatures − far more than needed − the union decided to scrap the effort in the face of challenges to the validity of many of those signatures.

Then last year the same organization sought to cap the amount dialysis centers can charge patients at no more than 15 percent above their costs, with a requirement for refunds if profits exceeded that amount. They scrapped that effort, with a union spokesman saying it was instead focusing on similar measures in California and Ohio.

Campaign to outlaw title loans ends

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)
Voters wait in line at dawn to cast their ballot.  (AP Photo/Matt York)

Backers of a bid to ask voters to outlaw high-interest title loans have quit amid the inability to raise the cash they need to get it and keep it on the November ballot.

Rodd McLeod, campaign consultant for Arizonans for Fair Lending said the refusal of federal courts to void a law on petition signatures has raised the costs to beyond the point that supporters are willing to fund. And without the money, he told Capitol Media Services, it makes no sense to keep gathering signatures.

The initiative sought to ask voters to remove the exemption that the industry now has from a state law which limits allowable interest to no more than 36 percent a year. Current title loans can carry an annual percentage rate up to 204 percent a year.

Backers needed 237,645 valid signatures by July 2, 2020 to put the issue on the general election ballot that year.

But McLeod said that the law, enacted in 2014 by the Republican-controlled Legislature, actually requires circulators to gather far more than that as a cushion against signatures being disqualified. And even if they do, he said, the law gives foes of the measure new legal tools to try to keep it from ever going to voters.

On paper, the law in question requires paid circulators to register and provide and address where they can be subpoenaed.

What’s crucial, though, is that judges are required to throw out all the signatures of any circulator who does not show up in court, regardless of whether there is other evidence showing that the signatures themselves are valid and were legally gathered.

So concerned was McLeod’s group that it asked a federal judge to void the laws.

In a 19-page ruling last year, Judge Susan Bolton acknowledged the 2014 statute could make it more difficult for those proposing their own laws and constitutional amendments to put their proposals before voters.

But Bolton said challengers did not present enough evidence – at least not yet – to show that allowing it to remain in effect presents irreparable harm, either to voters or those who hope to propose future ballot measures. So she agreed to allow the law and its hurdles to remain on the books pending a full trial, something that is unlikely to occur before the deadline for groups like McLeod’s to turn in their signatures.

“We don’t have the money as a campaign to not only gather the extra signatures due to the ones that are going to get thrown out on these legal technicalities but also to get people into court at the same time” to confirm the signatures they gathered. “That’s also costly.”

In fact, that could be the more costly part of it, given that anyone who wants to challenge the legitimacy of an initiative campaign need only file suit questioning the validity of the signatures and then issue subpoenas for all paid circulators.

McLeod said someone might have gathered 1,000 signatures.

“But the person who witnessed your signature, the paid circulator, isn’t available on a particular Thursday next August to be in court in Phoenix because maybe they live in Sierra Vista,” he said. “So your signature gets thrown away, your voice gets silenced, because of a technicality having to do with the person who gathered the signature.”

McLeod pointed out that lawmakers, in enacting the requirement, did not extend it to petitions to nominate candidates, including themselves.

Bolton, in her ruling, noted that distinction.

Attorneys for the state countered by citing the Voter Protection Act. That constitutional provision says once a measure is approved at the ballot box it cannot be repealed by the Legislature but instead must be taken back to voters.

Bolton was skeptical.

“The ‘near permanency’ of an initiative once passed is more of a legal outcome than a compelling government interest in justifying (the state’s) chosen method of incentivizing subpoena compliance,” the judge wrote.

Still, none of that was enough for Bolton to grant a motion to bar the state from enforcing the law at the 2020 election.

Challengers have filed an appeal of her denial to enjoin the law. But that case won’t be heard until April.

Bolton isn’t the only judge who has refused to void the law. The Arizona Supreme Court reached a similar conclusion in 2018.

“The statute represents a reasonable means of fostering transparency, facilitating the judicial fact-finding process, including compliance with valid compulsory process, and mitigating the threat or fraud or other wrongdoing infecting the initiative process,” wrote Justice John Lopez for the court. “It furthers the constitutional purpose of the initiative process by ensuring the integrity of signature gathering by reasonable means.”

Voters may still get to weigh in on the subject of interest limits — but in a quite different way.

A ballot measure being pushed by the National Credit Alliance would overturn virtually all laws that now limit annual interest charges to 36 percent. Sean Noble, campaign manager for that group, called it a “stand against socialism.”

As a constitutional amendment it needs 356,467 valid signatures on petition by July 2 to qualify for the November ballot.

Clean energy ballot measure could close nuclear plant

These structures store spent fuel. Officials say Palo Verde has enough space to store used fuel indefinitely while the federal government decides where to place a permanent national storage facility. (Cronkite News Service Photo by Griselda Nevarez)
These structures store spent fuel. Officials say Palo Verde has enough space to store used fuel indefinitely while the federal government decides where to place a permanent national storage facility. (Cronkite News Service Photo by Griselda Nevarez)

About 50 miles west of downtown Phoenix, three massive concrete domes, spaced side-by-side on a 4,000-acre plot of land, dominate the skyline.

The Palo Verde Nuclear Generating Station is the nation’s largest power producer, serving 4 million people across the Southwest and providing about 35 percent of Arizona’s electric power, according to the U.S. Energy Information Administration.

If the Clean Energy for a Healthy Arizona initiative appears on the ballot in November, voters will decide the plant’s future. The initiative calls for 50 percent of Arizona’s electrical energy to come from renewable sources, mostly solar and wind, by 2030. Nuclear power would be hit hardest among sources of power in Arizona, because Palo Verde could not operate at levels low enough to satisfy the initiative’s requirements. Supporters have less than two months to gather enough signatures to qualify the initiative for the ballot.

At a news media tour of the plant in April, reporters donned head-to-toe protective gear to guard against radiation before entering one of Palo Verde’s three nuclear-containment buildings. The reactor was undergoing refueling, a process that repeats every 18 months.

Inside the sweltering concrete dome, a central pool containing the nuclear reactor gave off a bluish tinge. The jumpsuit-clad refueling crew sat aboard a metal contraption moving slowly above the pool, dragging fuel assemblies – rectangular stacks of pallets containing uranium – by a rope through the water.

Every six months, one of the containment buildings goes through a month-long refueling process. Palo Verde plans these outages for the fall and spring, when Arizona and Southern California need the least electricity for heating and cooling, spokesman Alan Bunnell said.

Turning the reactor on and off isn’t as easy as pressing a button – it involves weeks of preparation. That’s one of the reasons the plant would have to shut down completely if the ballot initiative passes, said Jack Cadogan, senior vice president of site operations. Solar energy sources would generate so much power during the day in Arizona that there wouldn’t be enough room on the grid for nuclear.

“We would have to shut Palo Verde down during the day every day,” Cadogan said. “But that’s not how nuclear plants really work. Nuclear plants can’t just be shut down and then started up again.”

California has a similar problem, he said. Its solar energy sources produce so much excess electricity that it pays Arizona to take the excess power. But if Arizona must switch to 50 percent renewables, it no longer will be able to take California’s extra power. That means both states probably will have to spend billions developing technology to store solar energy, he said.

“The only reason (California’s) electric bills are not double of ours, I think, is because they have not tackled the storage issue,” Cadogan said. “But this mandate would force us all to tackle it all at once. And there’s going to be a lot of customers that are going to be hurt, especially lower income customers.”

Rodd McLeod, a spokesman for the Clean Energy Initiative, took issue with Arizona Public Service’s assertion that the requirements of the initiative would force them to close the plant. He was skeptical about APS’ argument that Palo Verde would no longer be economically viable, since utilities from other states own part of the plant.

“If the Palo Verde plant closes, it’s going to be because APS decides to close it,” McLeod said.

Supporters of the initiative, including Sandy Bahr of the Sierra Club’s Grand Canyon chapter, say that the long-term benefits outweigh the immediate costs.

“Here in Arizona, solar is a great resource that we have that we should be utilizing more of,” Bahr said. “And I think the public gets that, the voters get that, and they’re very supportive of it. That’s why the utilities are trying so hard to create confusion and to create fear and try and undermine it.”

Because generating nuclear energy produces radioactive waste and involves mining and processing uranium, a nonrenewable resource, nuclear isn’t classified as renewable. However, APS calls the Palo Verde plant the nation’s largest source of clean-air energy because it doesn’t emit carbon.

For the initiative’s backers, though, that’s not enough.

“From the perspective of someone who wants clean, sustainable, renewable energy, nuclear power doesn’t cut it,” Bahr said.

Supporters of the Clean Energy initiative must get nearly 226,000 valid signatures of  registered voters by July 5 to get it on the November ballot. Backers include the Arizona Asthma Coalition and the Natural Resources Defense Council.

GOP candidates lean on Trump, Dems avoid Biden

From left are President Joe Biden and former President Donald Trump

Former President Donald Trump’s involvement in Arizona politics was a boon to Republicans in the primaries, but Democrats speculate that it will harm the GOP in the upcoming general election.

In the time leading up to the primary election, Trump-endorsed candidates used the former president as a launchpad for funding and recognition. Democrats are not receiving endorsements from President Joe Biden or Democratic former President Barack Obama, but Democratic consultants say that’s the better strategy.

Trump makes frequent trips to Arizona and is possibly on the campaign trail himself. He makes appearances with his endorsees and rakes in contributions from supporters.

Rodd McLeod, a Democratic consultant, said. “Donald Trump is basically trying to help Donald Trump. Yeah. I mean, he goes out and does these events because he raises a lot of money and the candidates aren’t necessarily getting help.”

The “MAGA” strategy of deifying Trump was a success in the primaries, which put almost all of the Trump slate ahead of the other Republicans. But candidates need to impress a different population to win the general.

Democratic consultant Matt Grodsky said. “Primaries are a different game. You’re appealing to your base, especially as the right’s concerned.”

Grodsky explained that because Republicans have better voter registration they can afford to “play with fire” in the primaries, but Democrats would be alienating necessary votes by playing the same game. “They’re not doing big rallies, because all that’s going to do is fire up the Democratic base that’s already with these candidates. Right now, we’re trying to go get that middle of the road voter.”

McLeod said, “I don’t think a Bernie Sanders endorsement is extremely helpful in a general election in Arizona, right? But that doesn’t mean it would be a bad thing to have in a primary when you’re trying to distinguish yourself and stand out.”

Trump endorsees preached a far-right message before the primaries. One candidate called abortion a “demonic” sacrifice although most Arizonans want abortion rights. Universally, Trump’s candidates spread misinformation about election fraud although most Arizonans also don’t believe the 2020 election was stolen from Trump.

McLeod noted that when Trump himself scared moderates away with extreme rhetoric, he lost Arizona.

Grodsky said, “I prefer the Republicans to continue to make that mistake. Because theoretically, their logic makes sense based on the math, but it doesn’t make sense based on the rhetoric. Their message does not resonate with the middle.”

Wary of that outcome, after winning the primaries, some of Trump’s candidates are trying to pivot to a more moderate and accessible stance, either refusing to address their past comments or claiming their views have changed.

Unlike Trump, Biden, Obama and former Republican President George Bush haven’t endorsed anyone in years. Obama did make some endorsements in 2020, but only Trump is regularly endorsing candidates and paying visits to Arizona. Biden is avoiding that now, which Democrat consultant McLeod said is standard practice during the midterms.

McLeod cautioned that Trump’s appearances do not necessarily indicate widespread support. “Republican members of Congress are not excited about having him come to their district unless it’s like, you know, Andy Biggs,” he said.

McLeod said Biden’s involvement would not be “a great play” with the economy doing poorly. McLeod noted that Obama and Trump were unpopular two years into their terms as well.

McLeod compared Trump’s preferred gubernatorial candidate Kari Lake and Republican leadership with current Gov. Doug Ducey who was much more successful at collecting moderate votes. “Ducey won four years ago by like 14 points,” McLeod said. “So, you know, I don’t think it’s necessarily a great situation they’ve created for themselves.”

“She’s scared away a lot of voters and there’s a lot of voters who voted for Karrin Taylor Robson and who would not be voting for her,” McLeod said of Lake.

It’s not yet clear whether the Democrat’s old strategy will work. They weren’t successful in the past three gubernatorial elections, and Democratic gubernatorial nominee Katie Hobbs, the current secretary of state, is by no means expected to win in a landslide victory.

Democrat consultants say that the party’s national groups are supporting Arizona candidates, but they’re doing it by pouring money into Hobbs’ campaign and against Lake’s; not through rallies and endorsements.

Grodsky said, “I think the general consensus is, you know, we’re not going to win this thing with Democratic surrogates, right, you’re going to win it by going up the middle. To go up the middle and to communicate to the middle you need money for paid communications. So, I think that’s the first and most important strategy I do think in terms of raising more money.”

But Democrats aren’t the only ones spending money.

Both sides are giving their all. The Republican Governors Association alone is spending millions against Hobbs.

Candidates on both sides are enjoying the endorsements of a handful of national players like Sen. Ted Cruz, R-Texas, who recently endorsed Lake and U.S. Sen. Cory Booker, D-N.J. who is supporting Sen. Mark Kelly, D-Ariz., in his re-election bid. However, former presidents apart from Trump are staying out of the fray.

Obama hasn’t endorsed anyone since 2020. Biden hasn’t endorsed anyone since Sen. Kyrsten Sinema, D-Ariz., in 2018.



GOP lawmakers seek limits on voter power

FILE - In this Thursday, June 24, 2021, file photo, Rep. John Kavanagh, R-Fountain Hills, speaks during a vote on the Arizona budget at the Capitol, in Phoenix. "It's unfair to the people who you ask to vote to have more than one subject matter," Kavanagh told a Senate committee in March. Voters may back a measure with issues they support though it contains other issues they don't, he said. (AP Photo/Ross D. Franklin, File)
FILE – In this Thursday, June 24, 2021, file photo, Rep. John Kavanagh, R-Fountain Hills, speaks during a vote on the Arizona budget at the Capitol, in Phoenix. “It’s unfair to the people who you ask to vote to have more than one subject matter,” Kavanagh told a Senate committee in March. Voters may back a measure with issues they support though it contains other issues they don’t, he said. (AP Photo/Ross D. Franklin, File)

In 2022, depending on which advocacy groups succeed in gathering enough support, voters may see questions on their ballot asking about capping medical debt, stopping secretive election spending or ending machine counting of ballots. 

They’ll also be asked to vote to make it more difficult for citizens to make lasting laws through the initiative process, after legislative Republicans finally succeeded in sending two initiative-limiting referendums to the ballot. 

Some of the more extreme bills targeting initiatives, including one to require each ballot measure to obtain 55% of the vote for passage, instead of the simple majority now required, didn’t succeed. But during the last few days of the legislative session, House and Senate Republicans managed to pass measures that could make it easier for lawmakers to reverse the will of voters and limit initiatives which sometimes contain a laundry list of policies  to a single subject. 

In a March debate on one of the measures, Sen. Victoria Steele, D-Tucson, said, “Our ballot measure process in Arizona is one of our most precious constitutional rights, yet those on the other side have come up with bills year after year, for decades, to decimate it, and here we go again.” 

SCR1034, introduced by Sen. Vince Leach, R-Saddlebrooke, and approved by Republican majorities in the House and Senate, would undermine the voter-approved Voter Protection Act, which blocks the Legislature from repealing or amending voter-approved laws, unless any legislative amendments pass with a three-fourths vote and further the purpose of the voter-approved law.  

The Voter Protection Act passed in 1998, after the Legislature effectively repealed a 1996 voter-approved law legalizing medical marijuana. After progressive groups began more effectively using the initiative process during the past few years – passing laws that raised the minimum wage and created a new surcharge on the wealthy to fund education  Republican lawmaers and business interests have pushed hard to weaken the Voter Protection Act. 

Leach’s measure would allow the Legislature to amend or repeal any part of a voter-approved law if a single part of it is deemed unconstitutional.  

“This is not taking anything away from the voters. This is giving the voters an opportunity to have a say,” Leach said during a March debate on the measure.  

The other measure headed to the ballot, Rep. John Kavanagh’s HCR2001, would limit citizen initiatives to a single subject. Lawmakers already theoretically have to follow that rule for their own legislation – though anyone reading the hundreds of pages of tangentially related policy included in budget bills wouldn’t know that. 

“The purpose of the single subject rule is to prevent something called logrolling, where you take a bunch of good things and you shove a bad thing that doesn’t have popular support, in it, thus forcing voters to take the bad with the good or reject all the good because of the bad,” Kavanagh said during a January committee hearing introducing his bill. 

Rodd McLeod, spokesman for the Healthcare Rising Arizona group behind one proposed 2022 ballot measure, said the recent budget fight shows that legislating is messy, and people have to make compromises to get a shared goal accomplished. Ballot measures don’t have the same opportunity to fail, get amended and pass a few days or weeks later – they get one chance to get the language right before collecting signatures. 

The two initiative-limiting referendums, and the many others that were considered by the Legislature this year, are an attempt by lawmakers to take power away from people, McLeod said.  

“I think the Republican elite kind of had the bejesus scared out of them in the last couple elections,” he said. “They’ve given up on offering a vision for the future, and now they’re left with rewarding donors, making it easier to hold onto political power and creating bad situations for people who don’t view the world the way they do.”  

Michael Smith, a retired social worker and one of the leaders of Healthcare Rising Arizona, said Republicans may end up regretting their attempts to make the initiative process more difficult if Democrats seize legislative majorities and Republicans are left to try to pass policies on the ballot.  

“Of course, they’re going to regret it when the backlash comes along because Arizona is turning more and more blue,” he said. 


Groups challenge proposed ballot measures in court


Business groups are trying to keep Arizonans from voting on proposals to hike taxes on the most wealthy and give hospital workers a pay hike.

One challenge, filed by a group financed by the Arizona Chamber of Commerce and Industry, alleges that the legally required 100-word description given to initiative petition signers about the effects of the tax increase to generate nearly $1 billion a year for K-12 education fails to adequately describe how it works. Foes contend that those who were asked to put the measure on the November ballot were never told it was an entirely new tax and how it would result in “a near-doubling” of the marginal tax rates owed by many businesses.

If that claim sounds familiar, it should. The chamber used it successfully two years ago in its bid to keep a similar measure off the 2018 ballot.

The other from a group financed by the Arizona Hospital and Healthcare Association contends that the initiative process was flawed because it never identified as Service Employees International Union – United Healthcare Workers West as its sponsor and source of its funds.

Foes of this measure also claim that the 100-word description on petitions is “highly misleading.”

David Lujan, the director of the Arizona Center for Economic Progress and the author of the tax plan, said the challenge by the chamber is “disappointing but not surprising.”

David Lujan
David Lujan

“The chamber has continually shown that they’re more interested in protecting well-paid CEOs rather than helping Arizona schools,” he said.

The proposal imposes what the initiative calls a 3.5 percent “surcharge” on incomes above $250,000 for individuals and $500,000 for married couples. Put another way, it would only be the earnings above that point that would be affected.

Challengers say that obscures the fact that people in that tax bracket already are paying a 4.5 percent state income tax on earnings at that level.

“Yet by saying the initiative ‘establishes a 3.5 percent surcharge’ on this income, the summary gives signers the misimpression that the income is currently untaxed,” wrote the attorneys for Arizonans for Great Schools and a Strong Economy, the chamber-financed group formed to fight the initiative.

They said it should have been portrayed to petition signers as an 8% tax rate on incomes above the threshold.

“A voter might be willing to tax their fellow citizens 3.5% but not 8%,” the attorneys are telling the judge. They said that should be listed as an 80 percent increase.

Lujan, however, said there’s nothing misleading about it.

For example, Lujan said, a couple earning $501,000 would pay the same tax as now on the money they earn. Then, there would be an additional 3.5% levy on $1,000 — the amount at which the tax kicks in, or $35.

Challengers also contend there are other misleading statements in that 100-word description, like the claim that the money would be used to “hire and increase salaries for teachers.” But they said the actual texts reveals the cash could be spent on those who “support student academic achievement,” a definition they say could include custodians and bus drivers.

There also is a claim that the measure would have a harsh effect on small businesses whose income tax is reported on their owners’ individual tax forms.

But Lujan said that ignores the fact that the tax is imposed not on the gross income of a business but only on what the business owner brings home, after paying all expenses like employees salaries, rent and utilities.


The measure the hospitals are seeking to quash would guarantee 20% raises over four years to certain hospital personnel, impose new infection-control standards on hospitals and put a provision in Arizona law designed to ensure that individuals with pre-existing health conditions can purchase insurance at affordable prices if the federal Affordable Care Act ultimately is voided by the courts or repealed by Congress.

Attorneys for the hospitals, in attempting to keep this off the November ballot, are relying in part on what appear to be technical issues with wording and the failure to define some of the terms.

hospital-featuredBut the lawsuit also takes aim at the claim that the measure, if approved “sets new minimum wages for direct care workers at private hospitals.”

“A reasonable voter would interpret ‘direct care workers’ to mean that wage rates will be adjusted for those directly involved in the care of patients such as a physician, nurse, or an imaging technician,” wrote attorney Brett Johnson.

In fact, he said, the text of the initiative instead refers to “direct care hospital workers.” And it defines that to include nurses, aides, technicians , janitorial and housekeeping staff, food service workers and nonmanagerial administrative staff — but not doctors.

Johnson also finds fault with the claim that the initiative, if approved, “prohibits insurers from discriminating against pre-existing conditions.” But he said that doesn’t make it clear that it would apply only to health and disability insurance and not things like life or property and casualty insurance.

“This broad overstatement is fraudulent and/or would cause a significant danger of confusion to a reasonable person,” the lawsuit says.

The lawsuit also takes aim at the wording of another provision designed to protect patients from “surprise out-of-network bills” they receive after it turns out that someone who cared for them in the hospital was not actually part of their insurer’s health care network.

Holly Ward, spokeswoman for the Arizona Hospital and Healthcare Association, said a measure like this is a bad idea in these “extraordinary times,” mentioning that staffers “are working tirelessly to care for everyone who comes in for care.”

“We don’t need to drive costs up for hospitals and ultimately patients,” she said.

Rodd McLeod, spokesman for the initiative, said the fact that the hospitals are going to court is telling.

“This lawsuit is just an admission by the hospitals that they’re not going to be able to convince Arizonans to vote against affordable health care at the ballot box so they’re going to try to deny voters a chance to have a vote at all,” he said.

McLeod also took a separate swat at state Sen. Vince Leach, R-Tucson, who signed on as a plaintiff with the hospitals. He said that Leach opposed legislation pushed by then-Gov. Jan Brewer to expand the state’s Medicaid program.

“So it’s no surprise to see him standing with millionaire CEOs and against ordinary families that get stuck with surprise bills,” McLeod said.

Leach declined to comment.

Both lawsuits now head to Maricopa County Superior Court where judges will consider the merits of the arguments. But in both cases the final decision is likely to come from Arizona Supreme Court.

Hospital group to challenge proposed ballot measure for pay hike

AHCCCS expansion on the ropes after federal matching funds decision

The state’s hospital industry is gearing up to fight a ballot measure that would require its members give virtually all their employees a 20 percent pay hike over four years.

Greg Ensell, spokesman for the Arizona Hospital and Healthcare Association said wages already are higher than the statewide average, at least when considering everyone employed by hospitals from top executives on down. And he said there is no hard evidence to back claims by supporters of the initiative being financed by a California-based union that the current wage structure is leading to staff shortages or high turnover.

The association also is opposed to another provision of the measure that seeks to impose new oversight about the incidence of hospital-acquired infections.

In a prepared statement, Ann-Marie Alameddin, the group’s president and chief executive officer, said the performance of Arizona hospitals already exceeds the national benchmark in the initiative.

Ensell said his association had no comment on two other provisions of the initiative that do not directly affect its members: ensuring that people with preexisting conditions can get insurance coverage and limits on the ability of insurers to refuse to cover medical conditions because the treatment was provided by an out-of-network physician.

On that latter plan, Marc Osborne who lobbies for Blue Cross and Blue Shield of Arizona said insurers are studying the language but have no immediate reaction. Insurers and doctors did agree to a less comprehensive 2017 law designed to provide a method for patients to appeal.

Pre-existing conditions

The last two provisions in particular appear to be issues likely to be popular with voters.

There is national attention to the issue of pre-existing conditions, particularly with Congress debating whether to scrap the Affordable Care Act and its prohibition against denying coverage to those who already are ill and lawsuits. That, in turn, could help build support for what is crafted as a take-it-or-leave-it package.

But campaign spokesman Rodd McLeod said these are not designed to be carrots to get voters to approve the entire plan, saying the four issues are all related.

“It’s designed to deal with the problems of our health care system,” he said. McLeod said it all relates to the kind of care people get in a hospital, how effective the hospital is working, and the ability of patients to pay for that care.

Backers have until July 2 to get the required 237,645 valid signatures on petitions to put the package on the 2020 ballot.

Jenny David, a labor and delivery nurse at St. Joseph’s Hospital in Phoenix, claimed that Arizona has among the highest turnover in hospital staff in the country, “with nearly one in five leaving for jobs in other states, or leaving the profession altogether.”

“Because salaries are so low, hospital worker shortages have real consequences for patients, such as emergency room overcrowding, reduced hospital beds and longer wait times for surgeries,” she said. And the issue, said David, goes beyond the direct medical staff.

“Sometimes we see patients sit in triage for hours because we don’t have a clean room to put them in,” she said.

David acknowledged that the measure, if approved, would mandate 20 percent pay hikes over four years — but only for those working in hospitals.

The salaries of people with similar jobs elsewhere in the private sector, ranging from medical staff at a doctor’s office to custodians in commercial buildings, would be unaffected. But David said that’s no reason to vote against the measure.

“I don’t think it should only apply to us,” she said. “All workers in Arizona should have fair pay.”

But the initiative, David conceded, does not do that.

“We’re focused on health care,” she said.

Ballot organizers did not immediately produce any data backing the claim that staff turnover at Arizona hospitals is higher than the national average.

Ensell also had no state-specific turnover data. But he did have his own figures, at least on salary, saying that in 2018 the average wage of a full-time employee at an Arizona hospital was more than $75,000, versus an average Arizona wage of $49,290. That hospital figure, however, also covers doctors and medical professionals who are staffers, and hospital executives.

Horror Stories

Others at a Monday press conference to kick off the initiative drive had their own stories to tell.

Delores Stoeser said her husband died from what she said was methicillin-resistant staphylococcus aureus – MRSA – that he contracted at a hospital.

Fernando Vicino spoke of having to have a valve in his aorta replaced.

“The Affordable Care Act could be repealed or overturned and I would not be able to find insurance at all,” he said.

And Steve Wasson complained about being stuck with high hospital bills for his wife after he said there were multiple tests performed on her without anyone checking with him, explaining their necessity — or, more to the point, telling him ahead of time what it would cost. But the provision on out-of-network billing would not have helped Wasson because he had no insurance at all.


Judge disqualifies health care initiative from ballot


Arizonans won’t be voting in November on a proposal to hike pay of hospital workers and guarantee that those with pre-existing conditions can get affordable health insurance.

In an extensive ruling late Friday, Maricopa County Superior Court Judge Pamela Gates said there are not enough valid signatures on petitions submitted by a California union to put the issue on the ballot. Gates found that some circulators were not legally qualified to circulate the petitions.

In other cases, she said, some of the 332 circulators subpoenaed by foes of the initiative failed to appear in court to be questioned. Gates said the signatures they gathered also cannot be counted.

All that left the backers of the Healthcare Rising measure with fewer than the 237,645 valid signatures needed to qualify for the ballot.

Campaign spokesman Rodd McLeod said there will be an appeal to the state Supreme Court.

Pamela Gates
Pamela Gates

The initiative sought to require a 20% pay hike for hospital workers — excluding executives and doctors — over a four year period.

It also proposed a guarantee that people with pre-existing conditions will be able to obtain affordable insurance if the federal Affordable Care Act is repealed. Another provision was designed to protect patients against “surprise” medical bills from doctors and others in hospitals who turn out to be “out of network.”

And it also sought to require hospitals to comply with certain national standards of infection control.

Foes, led by the hospitals and the Arizona Chamber of Commerce and Industry, filed suit. They cited a litany of what they said were flaws in both how signatures were gathered and in the wording of the description of the initiative provided to petition signers.

They also charged that signers were deceived because the names used by the backers of the initiative and of the campaign committee did not disclose that it was being financed by the California-based Service Employees International Union — Union Healthcare Workers West.

Gates acknowledged that virtually all of the $6.7 million raised by June 30 came from the union. But she also said there was not “sufficient credible evidence” to conclude that potential petition signers were defrauded or that anyone was confused or misled because SEIU-UHW was not included in the committee’s name.

But Gates did find other legal problems, even if some of the signatures are restored.

One, she said, goes to the 100-word description which says it will “prohibit insurers from discriminating based on preexisting conditions.”

Gates said the evidence shows that about 60 percent of Arizonans are insured through an employer’s self-funded insurance plan. More to the point, the initiative would apply only to those who purchase individual or group plans. And she said it was misleading not to tell signers that the provision would not aid a majority of Arizonans.

She also said it was misleading to say that the initiative would set “new minimum wages” for workers at private hospitals. Gates said there was evidence that people, confronted with that phrase, would equate it with some bottom-level wage set by federal and state law and not the fact that the raises would be on top of what could be a current $37-an-hour salary paid to an experienced nurse.

Friday’s ruling was cheered by Garrick Taylor, spokesman for the Arizona Chamber. He said it would “have forced tremendous cost increases onto patients and hospitals.”

Two other initiatives have cleared their first legal challenges, one to legalize recreational use of marijuana by adults and another to give judges more discretion in sentencing “nondangerous” offenders.

But a proposal to increase income taxes on the highest income earners to fund K-12 education was found to have a flawed description.

All of those rulings, however, are subject to Supreme Court review.

LUCHA emerges as key PAC in Arizona progressive movement


Fourteen of the 15 legislative and county candidates who received endorsements and varying degrees of financial support from activist group LUCHA emerged victorious in last week’s primaries, a figure progressives say is evidence of the organization’s growing influence in Democratic circles. 

Living United for Change in Arizona, which formed a decade ago as a small group of activists organizing against Republican immigration hardliners, was active in several of the party’s competitive primaries, including in the closely-watched elections in Legislative Districts 26, 27 and 29, all races that seemed to magnetize political spending. 

In those districts, progressives claimed repeated victories. Sen. Juan Mendez, D-Tempe, fended off well-funded challenger Jana Lynn Granillo. Melody Hernandez, who ran on a slate with House Minority co-whip Rep. Athena Salman, edged out Debbie Nez Manuel for LD26’s open House seat. In LD27 in Phoenix, incumbent Reps. Diego Rodriguez and Reginald Bolding successfully defended their seats from former lawmaker Catherine Miranda, and in LD29, Rep. Richard Andrade staved off a challenge from Teddy Castro, a Realtor from Litchfield Park. 

Exactly how significant the organization’s role was in winning those races is difficult to quantify. Its independent spending – which totaled $101,000 in a two-week period in mid-July – is just a fraction of the total sum of campaign cash that outside groups spent in this year’s Democratic primaries. Besides, several LUCHA-backed candidates have electoral advantages as incumbents, and LUCHA’s spending occurred after many Arizonans had already voted via early ballots. 

Either way, the organization has a growing track record of proximity to political success, from wins in primaries to spoiled Republican legislation, and its supporters say that’s no accident, pointing to the group’s ability to organize and create political consciousness among Latino people in Arizona.

Diego Rodriguez
Diego Rodriguez

“If you look at where they started compared to where they are now, I think people are going to want to study LUCHA,” said Rodriguez, who received the group’s endorsement in LD27. “The state has always had large Latino communities. Now they’re organized. It’s a model that works.”

LUCHA was not planning on playing in legislative Democratic primaries, according to Randy Perez, who runs the group’s PAC. But private polling showing several LUCHA-backed incumbents losing to their challengers spurred action. 

In LD27, that meant spending $32,000 in support of the campaigns of Bolding and Rodriguez. 

“(In the past), the money was always one sided,” Rodriguez said. “There wasn’t a counterbalance to APS, the Chamber of Commerce, Greater Phoenix Leadership.”

Catherine Miranda, Rodriguez’s challenger, attracted backers of her own, including Revitalize Arizona, the political arm of Pipe Trades Local 469. In LD26, challenger Debbie Nez Manuel attracted support from Revitalize as well as PACs representing institutional players like Greater Phoenix Leadership, a group of Valley CEOs that advocates for business-friendly policies.

That district’s House race drew more spending than any other Democratic primary this year. Outside groups spent more than $217,000 to support Nez Manuel, and $8,000 against her. 

These groups “pay to be able to talk to people who have a vote,” said longtime Arizona Democratic consultant Rodd McLeod. “These are groups where the ideology is … we want to have a seat at the table.” 

And they recognize that the table might be growing. Democrats are interested in taking a legislative majority in November, and stakeholders from across the political spectrum are taking note. 

“Those people always move toward someone who looks like they might be a winner,” McLeod said. 

LUCHA, with its ideological frame and specific policy goals – which currently include a significant COVID-19 relief package it calls the “people’s bailout” – is a different beast. But it has adopted some of the same tactics as traditional outside groups. For example, in this election the organization paid for mailers, texts, radio ads, voter education and so on. 

And like those other stakeholders, it expects the candidates that win to further a set of policy goals at the Legislature and to remain responsive to the constituencies that elected them, a concept Perez calls “co-governance.” 

But the weight of that influence is still minor relative to the other players involved, said Joe Wolf, a Democratic consultant who helped run a business-backed PAC during the primaries called Arizona Integrity. For example, though LUCHA was certainly involved in efforts last session to defeat a sanctuary city ban, Wolf said that warnings from the business community and fear among Republicans of returning to the SB1070 days probably played more of a role. 

“I think they have been more effective in shaping policy debates and pulling the Democratic caucus more to the left,” Wolf said. 

Besides, he said, Democrats are a long-suffering minority party, making the kind of vision that LUCHA espouses difficult to realize through the Legislature. 

“We’ve been fighting for things that we can pull out of the budget,” Wolf said. “We’re not driving policy.”

Editor’s note: a previous version of this story incorrectly identified Jana Lynn Granillo as running on a slate with Debbie Nez Manuel in LD26. The story has been updated to remove that reference.

Editor’s note: a previous version of this story also incorrectly implied that Granillo’s campaign received outside support from Greater Phoenix Leadership. The story has been updated to remove that reference. We regret the error.