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Failure of Prop. 102 a victory for Arizona

Illustration by Holly Randall
By Laura Keslar
Arizona Daily Wildcat
Tuesday, November 9, 2004
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The way the pundits have it, I really messed up badly this election. Not only did I vote for Bush and use moral issues as my political compass, but, locally, I voted no on Proposition 102.

What was termed as a win-win proposition for Arizona if it had passed, Proposition 102 was the initiative that would have changed the State Constitution to allow the Arizona universities to own stock in companies in exchange for technologies invented. As such, it was coined as the "technology-transfer initiative."

Not only did it have the backing of the informed student body, but this proposition had the full support of the UA's administration and faculty, which included people like President Peter Likins and chemist Neal Armstrong.

Among the reasons to support the proposition, proponents bandied about the goals of creating more jobs, inviting more high-tech companies to the state, and finally giving Arizona universities the financial support they need.

Laura Keslar

But because it did not pass, we now have everyone from the state's bureaucratic elites to university students scratching their heads, wondering why this proposition failed. This is especially flummoxing, considering that the only major opposition to the proposition was spearheaded by the Goldwater Institute, a conservative think tank in Arizona, in its mid-October analysis of the initiative.

So why the failure to pass what looks to be a great thing for the state of Arizona and its universities?

Well, like everything else, we can always chalk it up to the lack of education of the voters who opposed it.

But realistically, it was not the lack of education that kept voters from approving this measure; rather, it was the proposition's innate flaws and potential to harm the citizens of Arizona. And, thankfully, Arizonans saw it for what it was: a chance to expand government control into the free market.

For one, the bill provided no public disclosure and, in fact, the state exempts the companies dealing with the Arizona Board of Regents from disclosures required of other state institutions. This would have severely increased the chances of corruption at a state level.

Without public disclosure, the state is not obligated to indicate where which companies got what and for how much. Since the state, then, is not held responsible to the public, it can enter into shady deals with businesses, including sweetheart deals, i.e. where family, friends, or state officials themselves benefit from deals at the expense of the UA and the state of Arizona.

Allowing the state universities to own equity in private companies has, in the past, proven to be problematic. In Arizona's past, local governments engaged in speculative ventures where they exchanged bonds for stock in the company.

According to the Goldwater Institute, one such instance involved Pima County's deal with Arizona Narrow Gauge Railroad, where the county received barely any benefit from a few railroad tracks. And, in this case, Pima County was not required to disclose their financial dealings. Because this was not limited to Pima County, the state adopted into its constitution the prohibition of ownership in private stock.

Arizona has already had enough problems with scandals in the past; potentially giving the state more ways to become embroiled in corruption was something Arizonans obviously didn't want to do.

Moreover, being the red state that we are, Arizonans were hesitant to allow the state to gain any more control over the local economy or to allow the state to unfairly compete with small and local businesses.

The proposition would have given state entities, including Arizona universities, the ability to own a portion of a private company in exchange for technologies invented at the university. While this seems all fine and dandy from a distance, a closer look reveals the potential misuse of state funds and unfair competition.

This would have meant that the state could have sold a valuable product only to have the company go bust, leaving the board of regents with a handful of Monopoly money but nothing else to show for it.

Because of this very fact, that the state, in all essence, would have an interest in the financial stake of a company, it would be in the state's best interest to subsidize the company and offer it tax and regulatory advantages.

In other words, the businesses partially owned by the state would have had an unfair advantage in competing with privately owned businesses.

Why would Arizona businesses want to compete with someone they can't out-compete?

While you may still remain convinced that Arizonans hate education and are illiterate blokes, consider this: The bill would have harmed college students.

Although the University of Arizona is a research facility, its primary purpose as a land grant university is to educate its students. But with the passing of Proposition 102 and an increased incentive to produce new technology, it would have significantly shifted the university's focus, potentially neglecting the education of its students.

Thank God, someone else had you in mind when they voted no on the Proposition 102.

If the state and Arizonans are so adamant about helping out start-up companies and local businesses, it would be wise to decrease business taxes and regulations.

So, for those of you who are upset about the local election results: relax. It was for your own good.

You can send Laura Keslar gifts and flowers as gratitude for voting no on Proposition 102 at

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