Trent's Blog

On the Right Tack

Posted By: Congressman Trent Franks on August 4, 2011

Filed Under: Arizona   Budget   Local Issues   Taxes   Transportation  

In a recent article, "Gosar, Franks on wrong tack," an editorial writer poised the question to her readers: If you think the sweetest sound at the Grand Canyon is the buzz of aircraft motor, not nature, then Arizona Congressmen Paul Gosar and Trent Franks are on your side.
 
In reality, if you think the sweetest thing about government agencies is their ability to kill family businesses while spending even more tax payers' dollars, then quite possibly this article might be what was sitting next to your coffee the morning of July 29th.
 
The attack here isn’t on the Grand Canyon, it’s on the US Air Tour Industry that has been providing the elderly, physically limited and time constrained international visitors, the eagle eye view of the Grand Canyon since the late 1930’s.
 
For the last 17 years the Air Tour industry has met the National Park Service (NPS) standard for “substantial restoration of natural quiet” as defined by the National Park Service by restoring quiet to 50% of the park 75% of the time. This fact was scientifically validated in 2008 by the Volpe Institute in their report to the NPS and the FAA. Though now, NPS is proposing to change the threshold from 50 to 67% by imposing broad new flight restrictions on all air tours from Northern Arizona and Southern Nevada. This will result in significant economic harm on the air tour operators as well as significant job losses impacting over 1,200 employees.
 
Over the last decade, the National Park Service record will confirm that there have been virtually no visitor written objections to the noise impact of the air tours from the millions of visitors that visit the popular National Park destination.
 
Air tour operators are prepared to work with the NPS to undertake additional and reasonable measures to improve the soundscape at Grand Canyon still but not at the expense of families' livelihoods.  The industry has already accepted caps on the number of flights, curfews to protect visitor experience after sunrise and before sunset, the elimination of many air tour routes, minimum flight altitudes, and flight free zones that protect about 87 percent of the park.
 
All in all, this preferred alternative is nothing more than a blatant attempt by a government agency to change the rules of the game after their conditions have already been met. I cannot support regulations that terminate American jobs, nor can I allow more tax payer dollars to be siphoned where they need not be.

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More Failed Policies Won't Lift Housing Market

Posted By: Rep. Trent Franks on June 1, 2009

Filed Under: Economy   Financial Sector   Local Issues  

Arizona Republic

According to an April report, Phoenix is now leading the entire nation in the number of home foreclosures. Valley bankruptcies reached a 41 month high in March, and in the city of Maryvale, approximately one in two homes are in foreclosure.
 
The West Valley in particular has been hit especially hard, having experienced a severe spike in foreclosure rates in the cities of Surprise, El Mirage, Peoria, and Glendale over the past many months. Amidst such seemingly dire news for homeowners, it is crucial for us to reflect on the lessons we've learned over the past few years by considering the policies that helped contribute to the current mortgage crisis, and what we can do to address them.
 
Unfortunately, much of the turmoil in our financial markets is rooted in failed government policies affecting the mortgage industry, through government sponsored enterprises such as Fannie Mae and Freddie Mac, as well as in corrupt rating agencies who fueled false confidence in the stability of incredibly risky loans. And while many lenders proved to be unscrupulous, so did many borrowers.
 
In 2006, there was a 44% increase in mortgage loan fraud filings in 2006, often stemming from borrowers materially misrepresenting their income, assets, or debt, forging documents, or simply lying about whether the property would be occupied as a primary residence, when in fact it was purchased for investment purposes. The Boston Federal Reserve concluded that the main reason for foreclosures in the subprime market has been the decline in the value of their homes, supporting the conclusion that these homeowners never intended to pay their mortgages at the higher reset interest rate.
 
Instead, they bet that their home would continue to appreciate, allowing them to refinance before the expiration of the lower “teaser” rate.
 
One piece of legislation in particular that fueled the cascades of foreclosures was the Mortgage Forgiveness Debt Relief Act of 2007. I was one of only 27 Members in the U.S. House of Representatives and the only Member of the Arizona Congressional Delegation to vote against this legislation. While the bill did lower taxes for a small number of Americans and the motive behind it was admirable, the broader effect of the bill was largely overlooked by Members of both parties.
 
Previous to that legislation, the IRS considered forgiven debt as "income," and therefore collected taxes on it. The unintended consequence of the bill -- which modified tax laws for residential property to limit the amount of taxable forgiven debt -- was that it often made it more financially rational for homeowners to walk away from their home rather than to fulfill one's contract with the bank and struggle to keep it.
 
Due to the bursting of the government-fueled housing bubble, the majority of houses purchased between 2004 and 2007 are "under water," meaning the owner's mortgage is greater than the value of the home. Although the foreclosure process has traditionally been an involved, expensive and time-consuming process, policies such as the Mortgage Forgiveness Debt Relief Act made voluntarily foreclosing and going through the seven-year credit rehabilitation suddenly easier than paying even the most conservative and conventional of all home loans, the 30-year fixed rate mortgage.
 
Enacting more of the same failed policies -- that is, embracing extreme federal intervention and nationalization of the housing market -- will not restore our ailing housing market. When the government intervenes and decides when prices are too high and when they are too low—based on political and media-driven interests rather than objective economic calculations—the result is an artificially manipulation of the market, hampering the market’s natural corrective tendencies and extending the timeframe in which such corrections occur, thereby spreading the damage to a wider population than would otherwise be adversely affected. These are the exact causes that helped shape our current financial crisis in the first place.
 
Government should encourage the injection of private capital into the mortgage industry again to shore up home prices, stop the precipitous decline of housing values, and reverse the destructive flood of mortgage foreclosures.
 
Federal lawmakers can best help the marketplace normalize by sending a clear message of certainty that there will not be a mortgage bailout enacted and that the government will not engage in risk management with the private sector. Taxpayers at large should not be asked to absorb any of the risk; the risk should be shouldered by the private sector.
 
Lawmakers must also be wary of hastily passing legislation that creates a "cure" worse than the disease. For instance, despite its misleading title, last year's American Housing Rescue and Foreclosure Prevention Act provided enormously costly corporate bailouts, imposed additional tax increases, and created slush funds for politically motivated organizations. None of these are solutions to our mortgage crisis.
 
A viable alternative to massive government-interventionist "solutions" to the housing market must first and foremost protect law-abiding taxpayers by refusing to burden them with subsidizing market failure, fraud, and poor investment decisions. We must also reject slush funds for political activist organizations; encourage personal accountability and responsible borrowing, lending, and investing; stimulate the creation of wealth; and address the fact that Fannie Mae and Freddie Mac remain at the core of the housing problem. Only by remaining committed to these tried-and-proven principles will we restore stability and profitability to the mortgage industry.  

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Casino Proposal Deals Residents a Bad Hand

Posted By: Rep. Trent Franks on January 1, 2004

Filed Under: Local Issues  

Arizona Republic 
 
Unknown to most area residents, the Tohono O'odham tribe has owned more than 100 acres of land in the northwest Valley for over five years and has recently applied to the federal Bureau of Indian Affairs to build what would be Arizona's largest resort and casino.

Still in its preliminary stage, the application for the Tohono casino project could take months or even a year to be approved or rejected.

As Arizonans feel the crunch of an economic recession, it's easy to understand the initial appeal of any new construction plan that holds forth the promise of new jobs.  Nevertheless, there are three reasons that the casino proposal merits serious scrutiny by the residents of Glendale, the citizens of Arizona, and by the federal government.

First, if history is any kind of teacher, it is very possible that such a casino will hurt more tribal members than it actually helps. Instead of gambling establishments increasing tribal independence and encouraging upward economic mobility, most often we have seen the opposite take place.

Aside from the few hundred people who manage the largest casinos and thereby realize significant profits, most Native Americans do not benefit economically from casino-related jobs.  One 1997 report showed that unemployment among Indians in Minnesota remained above 50 percent, the same level it had been before the arrival of almost 20 casinos in that state.  In other states, unemployment was shown to actually increase after the opening of new casinos.  There is also a well-documented increase in the rate of gambling addictions among Native Americans compared to the rest of the overall population.

Second, the arrival or expansion of gambling casinos inevitably brings destructive social repercussions.  Numerous reports have shown a marked increase in gambling addictions, suicides, child abuse and neglect, overall crime rates, and domestic violence.  For instance, several counties have shown as much as a 35 percent increase in bankruptcies after the arrival of one or more new gambling facilities.

Many other studies have shown a marked increase in the number of adults who demonstrate serious or pathological gambling problems after casinos begin to operate in new areas.  The National Gambling Impact Study has reported that compulsive gambling forces a greatly heightened level of stress and tension into marriages and families, often culminating in divorce and other forms of familial conflict.  Numerous other studies show a marked increase in the number of children and spouses of compulsive gamblers who are abused.

Third, there should also be careful evaluation of the long-term economic impact such a massive casino would have on local infrastructure.  Local Glendale leaders have already voiced serious concern over whether current public utilities-- water, gas, sewage-- have the capacity to accommodate the demand that would occur.  Tribes face less regulation and pay no state or federal taxes.  Under the Tohono O'odham proposal, some of the casino revenue would be shared, but the funds could be dispersed to the communities the Tribe chooses, and it remains dubious as to whether this would cover the significant infrastructure costs local taxpaying residents would incur.

Over the course of the last several weeks, Glendale residents have spoken to me of these and other concerns they have with the casino proposal.  For this reason, over the course of the next few weeks I intend to send a letter to the Secretary of the Interior, Ken Salazar, asking him to examine all of the potential ramifications of reclassifying the Glendale tribal land as federal land-in-trust for the purpose of building a casino.

Citizens and tribal members alike have a solemn duty to consider whether casinos are the type of revenue-building model that is good for the community.  If even a few of the concerns that I have cited are valid with respect to this casino proposal, then as members of local, state, and federal government, we owe it to our constituents to find innovative, alternate means of creating jobs and economic growth that would truly benefit both local residents and members of the Tohono O'odham Tribe.

The stated goal of building a new casino in the West Valley is economic gain for local residents, or broadening the socio-economic opportunities for Native American tribes.  The truth is that neither of these outcomes is likely to result, and the attending negative impact of a large gambling casino on the children and families of Glendale and the surrounding community should be the prime consideration going forward.
 

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