Monthly Archives: February 2014

The Arizona Free Enterprise Club urges the House of Representatives to vote YES on HCR 2005, ballot referral legislation that would allow terminally ill patients the ability to access experimental drugs that may save their life. Under the ‘Right to Try’ act, if a terminal patient has exhausted all FDA approved drugs and treatment options, and a licensed physician recommends an experimental alternative that has passed basic safety tests, the patient will have the opportunity to explore the proposed treatment.

Simply put, everyone deserves the right to save their own life. Government should not be setting up barriers that prevent sick individuals from exploring treatment options. HCR 2005 removes this roadblock and empowers terminally ill patients to make their own decisions. The Free Enterprise Club urges a YES vote on HCR 2005. 

TicketsCash

Despite all of the special tax cuts and subsidies passed at the legislature over the years, there was one program that our elected officials wisely eliminated in 2010—the Film Production Movie Tax Credit. This particular program was a proven waste of taxpayer money and nothing but corporate welfare for Hollywood movie producers.

For the last couple of years the movie industry has tried to bring this subsidy back to life, and the Free Enterprise Club has fought the legislation every step of the way. Their lack of success has spawned a new idea—Senate Bill 1098, which would create a new state agency called the Office of Film and Media. So, in addition to private special interests advocating for tax breaks for Hollywood, we will now have a taxpayer funded lobbyist for the industry as well!

Arizona doesn’t need an Office of Film and Media pushing to provide tax breaks for filmmakers on the public’s dime. The movie industry is important, but not any more important than every other business in the state.  The legislature should reject SB 1098 and stop looking for ways to give tax dollars away to Hollywood.

House Bill 2586 Provides Much Needed Transparency of ‘Economic Development’ Tax Credits

R&D

Every year, lobbyists and special interest groups go to the Capitol to advocate for various special incentives and tax credits for their particular industry. Whether it is subsidies for green energy or tax credits for the movie industry, there is a constant struggle over picking winners and losers at the legislature.

When discussing the various tax credit proposals, there is one economic development tax credit that is often touted as being broad based and fair: the Research and Development Tax Credit. This particular carve out in the tax code was created by the legislature as a way to incentivize R&D activity in Arizona. To avoid the criticism that confronted other industry specific tax credits, the R&D tax credit included no cost cap, set loose limits on qualification and carry forward requirements, and opened up the credit to all businesses.  It was a win-win for the advocates of the program–promote additional R&D in Arizona while addressing the concerns that the concept picks winners and losers.

The supporters were right about one thing: it is very broad based.  It is so broad based, in fact, the program has become one of the most expensive tax credits Arizona has to offer. In 2011 alone, Arizona paid out over $70 Million in R&D tax credits, with an additional BILLION DOLLARS in carry forward credits set to be claimed by employers over the next several years. Annual payouts from the program are expected to exceed $100 million in the very near future.  Many even suspect that the R&D tax credit program is directly responsible for sagging Arizona corporate income tax collections.

Proponents might argue that the cost of the credit is worth all of the new R&D occurring in Arizona.  Unfortunately, there is no way to prove this point since taxpayers are prevented from seeing who receives these tax credits. The Free Enterprise Club hopes to change this with HB 2586, legislation that requires annual disclosure of the recipients of ‘economic development’ tax credits by the Department of Revenue. Taxpayers have a right to know who is receiving these credits and in what amount so we can determine if it is a good investment for Arizona. At a cost of $100 million dollars a year, a little sunshine wouldn’t be such a bad idea.



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The Arizona Free Enterprise Club is a free market policy and advocacy group dedicated to promoting a strong and vibrant Arizona economy.