Court Strikes Down $15.3M Gift For Prescott Rodeo

An Arizona trial judge has declared the state’s $15.3 million handout to the Prescott Frontier Days Rodeo an unconstitutional gift of taxpayer funds.

Goldwater Institute, which participated in as a friend of the court, says the ruling is a “resounding victory for taxpayers and a vindication of the state Constitution’s restrictions on how the government spends taxpayer money.”

The case began in 2024, when the state legislature adopted an appropriation act that included a provision allocating the funds to the rodeo, with no strings attached. Taxpayers sued, arguing that this handout violated the Gift Clause, the provision of the state Constitution that forbids the government from “ever giv[ing] or loan[ing] its credit in the aid of, or mak[ing] any donation or grant, by subsidy or otherwise, to any individual, association, or corporation.”

In a series of cases brought by the Goldwater Institute over the past two decades, Arizona courts have interpreted this clause as requiring that any expenditure of public money must accomplish a “public purpose,” and must also result in a proportionate return to the government—that is, the government can buy things, but can’t just give away money for free.

The court’s ruling found that the rodeo appropriation failed both parts of the test. Relying on the case of Schires v. Carlat, a 2021 case litigated by the Goldwater Institute, the judge concluded that “the Rodeo Appropriation as written does not serve a public purpose” because the law didn’t even explain how the public could possibly benefit from the handout. What’s more, the law included “no standards or guidelines in the Appropriation that direct how the public’s $15.3 million must be spent, or whether it must be spent at all on, for example, upgrades to the rodeo grounds.” Nor did the rodeo promise to do anything in return for the money: “In fact, the Appropriation fails to require any consideration whatsoever in return for the public’s $15.3 million.”

The Arizona Attorney General’s office argued that the money wasn’t actually a handout, because the state Treasurer might devise a grant program whereby people could apply for part of the money. Citing an obscure provision of another law that allows the Treasurer to establish “criteria or factors under which applications will be evaluated for an award,” the Attorney General claimed that the Treasurer might use that power to come up with a new grant program—even though nothing in the appropriation act made any mention of that, and despite overwhelming evidence that the legislature had the Prescott Rodeo specifically in mind when passing the appropriation.

In its friend-of-the-court brief, the Goldwater Institute made clear that even if that was what the legislature had in mind, it would violate the Constitution’s “non-delegation” rule which forbids the legislature from giving away its rule-making power to unelected officials. The court agreed, finding that “the Rodeo Appropriation does not contain clear language—or any language—evidencing the legislature’s intent to delegate to the Treasurer the authority to create a grant program,” said the court. “And courts will generally not find a delegation without clear language, evidencing the legislature’s intent to delegate.”