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AFP-AZ May 15 Legislative Update

May 15, 2018 by AFP

AFP-Arizona May 15, 2018 Legislative Update


We are still working on grading our 2018 Legislative Scorecard.  But initial indications are not good.  The 2018 legislative session saw some victories on regulatory policy (see below), but on tax and budget policy, it was a bad scene.  Among other things, the Legislature and Governor went in for at least four tax increases in recent weeks: 1) extension of the Prop 301 education sales tax; 2) failure to block the revenue increase from federal tax code conformity (the new money will be spent on teacher pay hikes); 3) delegation of authority to the unelected head of the Department of Transportation to set a vehicle license tax (part of which will be swept for teacher pay hikes); and, 4) increased taxing authority delegated to the Department of Health (part of which will also be swept for teacher pay hikes).

There were also several big missed opportunities.  To understand how we grade missed opportunities, read about our Scorecard methodology HERE.

It is likely that the passage of Governor Ducey’s plan to give teachers a 20-percent pay raise by 2020 will take some of the wind out of the sails of RedForEd, though there is some danger from a proposition filed in April by the AZ Center for Economic Progress to raise income taxes in order to throw money at teacher salaries and school district operations.  Many of the bad things done on the tax and budget fronts this year were advertised to free-market conservatives as ways to avoid having a leftist education tax increase on the 2018 ballot.  We will delay the release of the Scorecard until we get a clearer picture of whether the Governor and Legislators were successful in thwarting the tax hike initiative.

2)  BAD NEWS.   Governor Doug Ducey’s original FY19 executive budget of $10.143 billion — assuming no supplemental additions to FY18 — was less than the estimated increase in population-plus-inflation (which would place the budget at $10.179 billion).  By its tradition, AFP-Arizona would have awarded 300 bonus points on its 2018 Legislative Scorecard for a General Fund budget — including FY 2018 supplemental increases — that came in under $10.179 billion.  Unfortunately, things went very badly.  Rather than get a 20-percent teacher pay increase by forcing school districts to spend more of their ample available resources on teacher pay, the Governor and Legislature chose instead to try to find the money in state funds — through revenue increases, fund sweeps, and very rosy revenue projections.  One result was tax increases (see item #1 above).  Another was a $10.4 billion budget — $200 million over the population-plus-inflation target.

3)  BAD NEWS.  House Speaker J.D. Mesnard (Chandler) was looking at introducing a reform that would reduce Arizona’s income tax rates so that state revenues are not increased when Arizona automatically conforms its tax code to the federal code.  We asked our activists to take action on that by going to  Unfortunately, that didn’t happen (see items #1 and #2 above).

4)  VICTORY!  House Bill 2005 was signed by Governor Doug Ducey on March 23.  The legislation is designed to blunt the impact of an impending November ballot proposition foisted on Arizona by California billionaire and solar investor Tom Steyer, who wants to force Arizonans* by 2030 to get half of their energy from expensive renewable sources.  The statute, if not overruled by judges, would impose very light civil penalties on utilities that do not comply with the Steyer mandates.  (*Technically, those Arizonans living in the SRP zone would not be subject to the mandates, because SRP is not a regulated utility.  But by shutting down the Palo Verde nuclear plant prematurely, the Steyer mandates would cause some of the higher costs and brown-out risks would be spread across the entire state grid.  To cope with the problem of intermittent power from solar and wind, Arizona would have to become heavily dependent upon power from natural gas — in which Steyer is also heavily invested.)

5)  BAD NEWS.  House Bill 2011 was a common-sense bill from Rep. Michelle Ugenti and the Goldwater Institute that would have allowed persons to offer blow-drying services without having to obtain a cosmetology license.  In Arizona right now, blow-drying someone’s hair without a cosmetology or barbering license is a CRIME punishable by up to six months in jail and a $2,000 fine — and earning a license can cost up to $18,000 and require a minimum of 1,000 hours of training.  Unfortunately, HB 2011 did not get a floor vote — Legislators were apparently scared out of their wits by the cosmetology racket…

6)  VICTORY?   House Bill 2062, the Goldwater Institute’s “Permit Freedom Act” (Sponsor:  Rep. T.J. Shope, Pinal County) passed the Legislature and went to the Governor May 4 (we are guessing he will sign it).  Among other things, the bill would require government agencies that issue permits and occupational licenses to use proper rules of procedure and evidence, rather than holding the kind of “kangaroo courts” that have become notorious in American administrative law.

7)  BAD NEWS.  The House version of Truth in Spending (HB 2099) passed the House and got through the Senate Appropriations and Finance Committees.  But the bill was held by retiring Senate President Steve Yarbrough of Chandler/LD17.  Steve was often a champion of fiscal conservatism (indeed, he voted for tougher versions of Truth in Spending in the past), but he was now reportedly concerned that Truth in Spending would “shame” the Legislature.  Our answer is that the Legislature needs more budget transparency and accountability.  We were FOR HB 2099.

To learn more about Truth in Spending, and to keep up pressure to pass the reform, go to our TRUTH IN SPENDING ACTION PAGE.

8)  BAD NEWS.  House Bill 2119 (Sponsor: Rep. Anthony Kern, NW Valley) has been held by House Rules chairman Rep. T.J. Shope (Pinal County).  HB 2119 would have made State Bar dues voluntary (instead of compulsory) for Arizona lawyers.  Compulsory bar membership and dues payment has no place in a Right to Work state.  We were FOR HB 2119.

9)  VICTORY!  House Bill 2126 (Sponsor: Rep. Vince Leach, Oro Valley) passed the House 58-0 on Feb 28 and passed the Senate 28-0 on April 5.  The House concurred 57-0 on the Senate amendments on April 11 and the bill has been signed by Governor Ducey.  HB 2126 would make it harder for cities to use slum and blight designations as excuses to hand out crony corporate-welfare exemptions from property taxes.  We were FOR 2126.

10)   VICTORY!  House Bill 2153, sponsored by Rep. Vince Leach (Oro Valley), passed the House 33-25 and passed the Senate 17-13 on party-line votes, and was signed by Governor Doug Ducey.  HB 2153 would protect the free speech and privacy of citizens, by keeping their personal donation information out of invasive government databases, and out of the hands of left-wing activists.  We were FOR 2153.

11)  GOOD NEWS!  HB 2162 was subject to a striker amendment for a transportation tax hike, and passed on the Senate floor.  We are grateful to report that the session ended before it could be passed through concurrence on the House side.  HB 2162 would have allowed counties to increase transportation taxes, and would have allowed Maricopa County to waste more money on light rail.  If cities want to waste money on light rail, they should raise their own taxes.  We were AGAINST HB 2162.

12)   BAD NEWS.  House Bill 2166 (Sponsor:  Rep. Noel Campbell, Prescott) was passed by the Legislature and signed into law by Governor Ducey.  HB 2166 delegates unlimited taxing power to an unelected bureaucrat, in violation of the letter and spirit of Prop 108.  Because of the Prop 108 violations, AFP-Arizona considers House Bill 2166 and Senate Bill 1146 to be among the worst bills of the session so far, and our Scorecard will slam legislators who vote yes for them.  For more information about why Arizona does not need gas tax hikes or other transportation tax increases, go HERE.

13)  VICTORY?  House Bill 2235 is a dental therapy striker bill (previously, “municipal improvement”) that passed the House and Senate despite strong opposition from the dentist lobby.  We are guessing that the Governor will sign it.  By allowing for the creation of a new profession, dental therapy, the bill would increase occupational freedom and help low-income and rural residents obtain greater access to affordable dental care.  Unfortunately, in order to get to the Senate floor, large concessions were made to the dental lobby, and in the latest version, dental therapists will be greatly limited in terms of scope of practice and where they can practice and how much they can do without supervision by a dentist.  Despite these changes, we are still FOR HB 2235.

14)  VICTORY!   House Bill 2238 (Sponsor: Rep. Eddie Farnsworth, Gilbert) will require courts in regulatory cases to actually decide questions of law (!) and not defer automatically to the decisions of administrative agencies.   HB 2238 passed the House on Feb 14 and passed the Senate on April 5, and has been signed by Governor Ducey.  We were FOR 2238.

15)  BAD NEWS.   House Bill 2280, sponsored by Rep. Vince Leach (Oro Valley), would have prevented government universities from engaging in corporate-welfare lease-back schemes that grant tax-free status to university-favored businesses.  HB 2280 passed House Rules Feb 19, but it did not get a floor vote.  We were FOR 2280.

16)  GOOD NEWS — House Bill 2324 (Sponsor: Rep. Heather Carter, NE Phoenix) was amended so that it is no longer dangerous.  We were concerned that the original language could be easily tweaked in the future to create a mandatory licensing scheme for community health workers.  And we opposed it because it created a fee structure and an enforcement structure and a Council, all of which would take up the time (i.e., money) and attention of bureaucrats.  But the supporters of the bill added several changes to the bill to remove most of the problems.  (That said, we still believe that community health workers should set up a truly private certification organization.)  We moved to NEUTRAL on 2324.

17)   BAD NEWS.  House Bill 2341 (Sponsor: Rep. Rusty Bowers, Mesa) — This bill is dead, having been held in the House Education Committee.  The bill would have allowed homeschool children to ride school district buses to commute to technical education schools — increasing school choice and making fuller use of school district resources.  We were FOR 2341.  Learn more by checking out the Channel 3 news story about this issue:

18)  GOOD NEWS.  House Bill 2348 (Sponsor: Rep. Karen Engel, Tucson) would have required Arizona to adopt California’s burdensome emissions standards.  We were tracking this dangerous bill and are grateful to House Energy chairman Rep. Rusty Bowers for not allowing the bill to move forward.  We were AGAINST 2348.  Of course, there were hundreds of bad bills introduced by members of the minority, on nearly every conceivable issue.

19)   BAD NEWS.  House Bill 2357, sponsored by Rep. David Livingston, was a pension reform that would have made the Elected Officials’ Retirement Plan (EORP) more actuarially sound — i.e., less bankrupt.  HB 2357 passed the House 45-15 on Feb 21 but never moved in the Senate.  We were FOR 2357.

20)  VICTORY!   House Bill 2371 (Sponsor:  Rep. Kevin Payne, NW Valley) was signed by the Governor May 14. HB 2371 would limit the number of restrictions cities and counties can put on mobile food vendors. We were FOR 2371.

21)  BAD NEWS.  House Bill 2399  (Sponsor: Rep. Paul Mosley, Mohave County) passed the House and Senate and went to the Governor’s desk.  Unfortunately, Governor Ducey vetoed the bill for a completely unconnected reason, demanding that Legislators send him a 20-percent pay hike for teachers. HB 2399 would have allowed applicants for licenses for real estate salespersons or brokers to do their training online, though they would still have to complete their final examinations in person.  We were FOR 2399.

22)  VICTORY!  House Bill 2434 (Sponsor: Rep. Jeff Weninger, Chandler) passed the House 34-22 and passed the Senate 17-12 and was signed by Governor Doug Ducey!  HB 2434 will allow for financial service firms to do “sandbox” testing of new products without a license.  We were FOR HB 2434.

23)  BAD NEWS —  House Bill 2456 (Sponsor: Rep. Mark Finchem, Oro Valley) passed the House 38-17, passed the Senate 21-9 on March 29, and was signed by Governor Ducey.  HB 2456 would extend the horizon for ending the Rio Nuevo tax increment financing (TIF) district in Tucson.  We were against TIF districts and AGAINST 2456.

24)  VICTORY!  House Bill 2460 (Sponsor:  Rep. Vince Leach, Oro Valley) passed the House 34-23 and passed the Senate 17-12 and now has been signed by Governor Doug Ducey!  The bill will prevent school districts from discriminating against charter and private schools when selling vacant buildings and used equipment.  HERE is a link to a good piece by the new Goldwater Institute education policy guru, Matt Simon, about why 2460 is a good reform.  We were FOR 2460.

25)  VICTORY!  House Bill 2461 (Sponsor:  Rep. Vince Leach, Oro Valley) passed the House 34-23, then passed the Senate 17-12, and then finally passed the House again 33-25.  And it was signed by Governor Doug Ducey!  HB 2461 will prevent cities and counties from discriminating against private schools in land-use policy.  We were FOR 2461.

26)  BAD NEWS.  House Bill 2479 (Sponsor: Rep. Michelle Ugenti-Rita, Scottsdale/FH) passed the House 39-19 on February 28 and then died in the Senate.  The bill would have defined what kinds of software and online services are subject to taxation and which are not.  By one estimate, cities are currently bringing in tax revenue of $180 million on services they should not be taxing — this bill would have fixed that.  (It also had a Senate version, SB 1392, which passed Rules on Feb 19 but was not heard on the Senate floor.)

27)   BAD NEWS   House Bill 2490 (Sponsor: Rep. Tony Rivero, Peoria) would allow parties engaged in electronic commerce to waive licensure, certification and registration.  It narrowly passed the House 31-27 but was held by the Senate Commerce and Public Safety Committee on March 19.  We were FOR 2490.

28)  BAD NEWS — House Bill 2528 (Sponsor: House Speaker J.D. Mesnard, Chandler) was a pro-growth bill to reduce capital gains taxes.  It passed the House 35-25 and passed the Senate Finance Committee on March 21.  Given that this was the Speaker’s bill, we were optimistic about passage, but it got swept away in the RedForEd frenzy.  We were FOR 2528.

29)   VICTORY?   House Bill 2532 (Sponsor: Rep. Kevin Payne, NW Valley) was transmitted to the Governor on May 3.  The reform would make it more difficult for cities and counties to imposing occupational fees or licenses on entrepreneurs.  We are FOR 2532.

30)   GOOD NEWS.  House Bill 2563 (Sponsor:  Rep. Paul Boyer, NW Valley) passed the Legislature and was signed by Governor Ducey. HB 2563 was the Goldwater Institute’s Campus Free Speech bill and would protect freedom of expression and the free exchange of ideas on the campuses of Arizona’s universities and community colleges.  (Note: it will have to be amended to fix a drafting error.)  We were FOR HB 2563.

31)  GOOD NEWS.   House Bill 2590 (Sponsor: Rep. David Cook, Pinal County) was a bad bill that was held in House Appropriations on Feb 19 (thanks to Approps Chair Vince Leach!).  It would have created a corporate-welfare tax credit scheme for companies expanding business investing in rural areas.  We were AGAINST HB 2590.

32)  VICTORY!   House Bill 2604 (Sponsor: House Speaker J.D. Mesnard, Chandler) passed the House 34-22 and passed the Senate 17-11 on April 9.  It re-passed the House 31-23 and the Senate 16-12 on April 12 and has been signed by Governor Ducey.  HB 2604 will ensure that cities hold elections in even-numbered years on days when voter turnout is high.  Currently, cities often bury elections on dates when turnout is low, favoring policy outcomes promoted by crony contractors and government employee unions.  We were FOR 2604.

33)  VICTORY!  House Concurrent Resolution 2007 (Sponsor: Rep. Doug Coleman, Apache Junction), nicknamed “No Taxpayer Money for Political Parties,” will allow voters on the November 2018 ballot to vote to prevent the so-called Clean Elections Commission from allowing taxpayer-supported candidates to funnel monies to political parties.  We were FOR HCR 2007.

34)  BAD NEWS — House Concurrent Resolution 2028 (Sponsor: House Speaker J.D. Mesnard, Chandler) passed the House 35-25 on February 21 and passed the Senate Commerce and Public Safety Committee March 13.  But then it died.  HCR 2028 would have allowed voters to fix the employer retaliation presumption — one of the many problems created by the Prop 206 minimum wage/sick leave measure passed by voters in 2016.  We were FOR HCR 2028.

35)  BAD NEWS.   House Concurrent Resolution 2029 (Sponsor: House Speaker J.D. Mesnard, Chandler) passed the House 35-25 on Feb 21 and passed the Senate Rules Committee March 27.  But then it died.  HCR 2029 would have allowed voters to raise the exemption on one of AZ’s most destructive taxes: the property tax on business plant and equipment. We were FOR HCR 2029.

36)  GOOD NEWS — Senate Bill 1065 (Sponsor: Sen. Kate Brophy McGee) passed the Senate 20-10, passed the House 56-0 on April 9, then re-passed the Senate 23-7 on April 11 and has been signed by the Governor.  The original bill (which we strongly opposed) has been amended so as to be harmless.  [The SB 1065 axle fee expansion in the original bill was itself not a terrible idea, especially since the revenues would have been dedicated to a specific infrastructure project (that got very close to being a user fee), but the move to delegate an increase in taxing power to an unelected bureaucrat violated the spirit of Prop 108, which is Arizona’s most important taxpayer protection.  The original bill got 2/3rds in the Senate, so we argued that the House could add a Prop 108 clause, and pass it honestly with a two-thirds majority.]  We were NEUTRAL on the final version of 1065.

37)   VICTORY!  Senate Bill 1247, sponsored by Sen. Nancy Barto (NE Phoenix), would prohibit counties and municipalities from requiring employers to provide health insurance to employees.  (In other words, prevents local governments from enacting ObamaCare-style employer mandates.)   SB 1247 passed the Senate 17-13 and passed the House 32-24 on April 3, and was signed by Governor Ducey! We were FOR SB 1247.

38)   VICTORY?   Senate Bill 1273 (Sponsor:  Sen. Warren Petersen, Gilbert) passed the Legislature and was trasmitted to the Governor on May 2.  SB 1273 would push the Governor’s Regulatory Review Council to strike down useless and burdensome regulations.  We are FOR 1273.

39)  BAD NEWS.  Senate Bill 1378, AFP-Arizona’s Education Spending Transparency bill (Sponsor:  Sen. Sylvia Allen, Northeast Counties), failed on the Senate floor 14-16 on March 29.  The Republicans voting against the bill were Senators Kate Brophy-McGee, Frank Pratt and Bob Worsley.  SB 1378 was a common-sense measure: when asking taxpayers for more money for budget overrides and bonds, school districts would have to tell voters how much they already spend per pupil per year.  But the education spending lobby is very afraid to let taxpayers know how much they already spend per child — and many legislators are afraid to stand up to the spending lobby.  (On the House side, Education chairman Rep. Paul Boyer did not schedule the House version, HB 2171, for a hearing.)  We were FOR 1378.

40)  BAD NEWS.  Senate Bill 1387 (strike-all amendment) was a replacement for HB 2333.  Unfortunately, it was held on the last day of session.  This bill, quarterbacked by our friends at the AZ Free Enterprise Club, would have blocked cities from imposing unreasonable regulations (including permits and licensing) on home-based businesses.  And HERE is a blog post by Christina Sandefur from the Goldwater Institute, explaining why home-based businesses need protection.  We were FOR 1387.

41)  BAD NEWS — The Legislature voted overwhelmingly to pass Senate Bill 1390 (substituted for HB 2158), which will extend the Prop 301 state education sales tax (6/10 of a cent) passed by voters in 2000 and set to expire in 2021.  Ideally, we think they should have voted No.  We believe the K-12 system has more than enough money already, and that the main problem is how to shake the money out of admin and capital and into classrooms — mainly, into the salaries of front-line teachers.  As documented by the state Auditor General, Prop 301 manifestly failed to push a greater proportion of our education spending dollars into classrooms and teacher pay.

And rather than passing a straight tax extension, they could have referred it out to the ballot with reforms that force more money into the classroom and give the Legislature flexibility regarding the current autopilot K-12 spending increases during recessions (for those who are familiar with the issue, we wanted to solve the problem whereby activist judges decided that the word “or” meant “and”).

42)  VICTORY!  Senate Bill 1399 (Sponsor: Sen. Steve Smith, Pinal County) passed the Legislature and was signed by the Governor on May 14.  SB 1399 would allow barbers and hairstylists to do apprenticeships, instead of being licensed through cosmetology schools.  We were FOR SB 1399.

43)   BAD NEWS.   Senate Bill 1404 (Sponsor: Sen. Steve Smith, Pinal County) failed on the Senate floor 12-17.  This reform would have limited the kinds of occupational fees and license imposed by cities and counties.  We were FOR 1404.

44)  BAD NEWS.  Senate Bill 1453 (Sponsor: Sen. Warren Petersen, Gilbert) was an AFP-ALEC bill that would have entered Arizona into an interstate compact against taxpayer financing of professional sports stadiums.  The House version (HB 2370, introduced by Rep. Paul Mosley) never got a hearing in Rep. Bob Thorpe’s Federalism, Property Rights and Public Policy Committee, and SB 1453’s initial hearing on the bill in Sen. Steve Smith’s Commerce Committee was sidelined into a discussion.  We were FOR SB 1453 and HB 2370.

45)  BAD NEWS.  Senate Bill 1467 (Sponsor: Senate President Steve Yarbrough) was a school choice bill that would have provided for a modest expansion of eligibility for students to receive education savings accounts.  We were FOR 1467.

46)  BAD NEWS.  Senate Concurrent Resolution 1016 (Sponsor: Sen. Sylvia Allen, Northeastern Counties) passed the Senate Commerce Committee on Feb 13, but did not get a floor vote.  SCR 1016 would have allowed voters in November 2018 to repeal the destructive $12-per-hour minimum wage legislation foisted on AZ by union activists in 2016.  We were FOR SCR 1016.

47)  BAD NEWS.  Senate Concurrent Resolution 1037 (Sponsor: Sen. Steve Smith, Pinal County) passed the Senate Commerce Committee on Feb 13, but it was never heard in Senate Rules.  This referendum would have allowed voters to limit state occupational licensing regulations to those necessary for public health and safety.  We were for SCR 1037.

Criminal Justice Reform

For information about bills related to criminal justice reform, contact Chalon Hutson at AFP-Arizona at