PEORIA, AZ—Americans for Prosperity Foundation-Arizona, a sister organization to Americans for Prosperity-Arizona, today issued a statement in response to the Arizona Supreme Court’s resounding 7-0 ruling in a case that will set precedent against taxpayer-funded special interest giveaways. In May, Americans for Prosperity Foundation Arizona filed an amicus brief before Arizona’s high court in Schires v. Carlat, urging the Court to rule that the City of Peoria unlawfully gifted millions of dollars of taxpayer money to private firms in exchange for undefined “economic development activities.”

Americans for Prosperity Foundation-Arizona State Director Stephen Shadegg issued the following statement:

“We applaud Arizona’s high court for issuing this significant blow against cronyism and in favor of our state’s hardworking taxpayers.  Politicians should never be in the business of handing out our hard-earned tax dollars to unfairly subsidize private businesses—especially when Arizonans reap no benefit in return. Today’s ruling will provide precedent and protection for taxpayers against future attempts by cities to inappropriately dish out money to better the bottom-line of private businesses in the name of so-called ‘economic development.'”

On Background:

The Arizona Supreme Court’s unanimous ruling and opinion can be found here.

In order for a City to follow the legal requirements of any gift clause, it must meet both prongs of a two-part test:

  1. Whether the expenditure itself serves a public purpose—the Court found the City of Peoria’s grant to Huntington University and Arrowhead Equities did;
  2. Whether the government receives proportionate consideration back– the Court found the City of Peoria did not. The high court held that the private firms’ “promise” to engage in “economic development activities” did not provide any quantifiable economic benefit back to the city, reasoning that it likely wasn’t an enforceable contract.

This case sets an important precedent for future gift giving and economic development grants– requiring the need to show real, monetary benefit for grants to private firms that are proportionate to the amount expended by the government.

For further information or an interview, reach Nicole Tardif at NTardif@afphq.org or (571) 329-0161.