The Goldwater Institute is a nonprofit, research organization based in Phoenix, Arizona “dedicated to protecting and expanding economic freedom, constitutional liberty, and educational opportunity.” With its main focus on Arizona, the Institute has developed reforms that expand school choice, enhance private property rights, and provide tax relief.

Michael Sanera, then a political science professor at Northern Arizona University, founded the Goldwater Institute in 1988 with the blessing of former U.S. Senator Barry Goldwater. Modestly starting off in a rented apartment, the Institute made an immediate impact on state politics by promoting tax cuts and education reform.

Under former Governor Fife Symington in the early 1990s, Arizona had 10 straight years of tax cuts. “We really valued [the Goldwater Institute’s] input on tax cuts,” Symington told the Arizona Republic in 2003. “They have produced some thorough, thoughtful and provocative position papers.”

The Institute is widely recognized as a leading proponent of charter schools, one of the most popular and promising education reforms in the last two decades.

In 2008, the Goldwater Institute reported a budget of $2.7 million. It does not accept government grants, and no single contributor provides more than 5 percent of its revenue.

Promoting Charter Schools

The Goldwater Institute has played a major role in making Arizona a national leader in the charter school movement. (Charter schools are publicly- financed schools, exempted from state statutes in order to develop innovative teaching methods.) These schools have boosted student achievement in Arizona and other states.

In 1994, the Arizona legislature debated a broad-based education reform bill including charter schools and vouchers that would have allowed low-income children to use tax dollars for private schools. The vouchers proved so controversial, though, that the Goldwater Institute shifted the debate to charter schools. As a result, the legislature approved a reform bill that had the least restrictive charter-school measure in the nation.

Charter schools rapidly proliferated in Arizona. By 1998, there were more than 250 charter schools, the most of any state in the nation. That year, the Goldwater Institute convened a series of focus groups for charter parents to gauge their needs. The Institute found that parents wanted access to information, both good and bad, about charter schools so they could make informed decisions.

In response, the Goldwater Institute launched a web site in 1999 that allowed parents to evaluate prospective charter schools. The site, the first of its kind, provided information on standardized test scores, teacher certification, and the role of parents in each school’s governing board.

By 2005, the number of charter schools had grown to more than 500 with a total enrollment of 60,000 students, roughly 10 percent of Arizona students. A 2004 Goldwater Institute study found that while charter students generally begin with lower test schools than students in traditional public schools, they rapidly improve. Charter students who completed the twelfth grade, for instance, surpassed public school students on reading tests.

Stopping Government Encroachments on the Private Sector

The Goldwater Institute opposes attempts by governments to expand beyond their constitutionally limited roles.

In 2004, a coalition of universities and business leaders backed a ballot measure called Proposition 102. It would have amended the Arizona Constitution’s “Gift Clause” prohibiting state and local governments from taking equity positions in companies.

Proposition 102 was widely popular. A poll found that 52 percent of the public approved with only 32 percent opposed.

The only organization publicly opposing Proposition 102 was the Goldwater Institute.

In October, just weeks before the vote, the Institute released a study criticizing the ballot measure. The study argued that the proposed amendment would enable state entities to subsidize favored companies that compete with private businesses. Speaking to the Arizona Daily Star, Goldwater Institute Center on Constitutional Government director Mark Brnovich explained: “You could have the state playing favorites, choosing winners and losers.”

To the surprise of its supporters, Proposition 102 was defeated 52 to 48 percent.

A veteran Arizona pollster said the Pro-102 coalition underestimated the influence of the Goldwater study in a state known for its free-market leanings.

“I think there was something about it that made them nervous, the concept of government going into competition with the private sector,” Earl de Berge of the Phoenix-based Behavior Research Center told the Daily Star. “It’s an argument that’s fairly powerful and pretty easy to understand.”

Litigating for Limited Government

In 2007, the Goldwater Institute launched the Scharf-Norton Center for Constitutional Litigation to help citizens “challenge unconstitutional laws and regulations.” Its successes include the following:

• In June 2007, the Goldwater Institute filed a lawsuit charging that the state was illegally trying to dictate the curriculum of charter schools. (At issue was whether the charter schools could teach U.S. history at grade levels different from those mandated by the state.) The Institute’s Clint Bolick told the Daily Star that the state had the right to set standards, “but it’s up to the charter schools to decide how to get there.” The state settled the lawsuit by agreeing to allow the charter schools to set their own curricula.

• The Institute won a lawsuit in 2009 on behalf of developer Mike Goodman who claimed that Tucson’s anti-demolition ordinance reduced the value of his property. If Goodman prevails, it will be the first case in which damages are awarded under Proposition 207, a state ballot measure passed in 2006 requiring governments to compensate landowners when regulations lower their property values.

• On December 23, 2008, the Arizona Court of Appeals unanimously ruled in favor of the Goldwater Institute’s case against Phoenix’s $97 million tax subsidy to a shopping mall developer. The court held that the tax rebate to help finance the construction of a mall violated the state constitution’s “Gift Clause,” which bans creating special laws that benefit individuals and businesses.

Rating Legislators

The Goldwater Institute issues an annual “Legislative Report Card” that scores state legislators’ votes in the areas of education, constitutional government, regulation, and fiscal policy.

Between 2003 and 2009, the report card gave scores averaging around the 50 percent mark. A score above 50 percent means that more positive than negative votes were cast. So the 50 percent average shows that legislators did not do anything to hinder liberty–or advance it either. The Institute calls this an insufficient commitment to limited government.

In the 2004 report, for instance, legislators received poor marks for increasing the budget by 13 percent, far outpacing the inflation rate and population growth. The 2009 report card gave the Senate a score of 53 percent and the House 49 percent. A major negative, the Institute wrote in a policy brief, is that often “legislators who claim to be ‘pro-business’ are in fact guilty of creating a kind of crony capitalism, where government gives special tax exemptions and payouts to favored businesses and industries.”