Arizona Republicans continue to advance solutions to improve the financial situations of their constituents, and Democrat Governor Katie Hobbs will soon be faced with a decision on enshrining that relief into law.
This week, the Arizona House passed SB 1063, sponsored by Senator Sonny Borrelli in the Senate and Representative Leo Biasiucci in the House, which would repeal the food municipal tax across the state. The 31-29 vote to clear the bill from the Senate chamber featured another party-line standoff between Republicans and Democrats, as it did earlier in the year when the Senate voted on this legislation.
The bill sponsor in the House, Majority Leader Biasiucci, celebrated the passage of his legislation after votes had been cast, saying, “Removing the grocery tax would save hundreds of dollars per family. All the Democrats voted NO because they stated saving a family pennies would mean nothing. Proud to stand with my Republicans to remove the tax on groceries.”
Removing the grocery tax would save hundreds of dollars per family. All the Democrats voted NO because they stated saving a family pennies would mean nothing. Proud to stand with my Republicans to remove the tax on groceries. 🇺🇲 pic.twitter.com/tHPuvQAf7t
In the aftermath of the bill’s successful outcome, the Arizona House Republican Majority Caucus wrote, “House Dems voted against eliminating the tax on your groceries, saying it cuts $160 million to cities. The truth is cities will gain $700 million in shared income taxes alone from last year to next year. It’s not about the $ or public safety; they’ve prioritized city bureaucracy over Arizona families who are struggling in this time of record inflation.”
House Dems voted against eliminating the tax on your groceries, saying it cuts $160 million to cities. The truth is cities will gain $700 million in shared income taxes alone from last year to next year. It’s not about the $ or public safety; they've prioritized city bureaucracy… pic.twitter.com/YgdBUzn49A
— Arizona House Republicans (@AZHouseGOP) March 22, 2023
After the Senate passed this legislation in late February, President Warren Petersen gave an exclusive quote to AZ Free News on why it was so important for legislators to take this action on behalf of their constituents: “Over the past year, prices have skyrocketed between 15% And 45% on basic grocery items like eggs, butter, lettuce, coffee, bread and poultry. Senate Republicans believe that everyday necessities should not be taxed, especially when inflation is at historic levels and our Arizona citizens are struggling to make ends meet. This bill provides broad-based relief to those who need it most and can save families hundreds of dollars annually. We’re happy this bill passed the Senate, but we’re disappointed that all Senate Democrats continue to play political games with lives and livelihoods of our taxpayers by voting against the measure.”
When asked by AZ Free News on why he supported the bill, Senate President Pro Tempore T.J. Shope replied, “As a former grocer, the tax on food has always troubled me. I can’t count the amount of times I had people ask me to place a necessary item back on the shelf because they were just a dollar or two short. We provided much-needed relief to people, and I was proud to vote yes.”
Though there has been much pushback against this bill from Arizona cities and towns, at least one municipal councilmember, Jack Hastings from Surprise, appears to be in support of this proposal.
The Joint Legislative Budget Committee estimated that SB 1063 “would reduce municipal transaction privilege tax by up to $195.6 million in fiscal year 2026. Many Arizona cities and towns opposed this legislation. The League of Arizona Cities and Towns listed the preservation of food taxes as one of its legislative priorities “to ensure that municipalities may continue to provide vital services to their population, now and in the future.”
SB 1063 will soon be transmitted to Governor Katie Hobbs, who has already made quite the hobby of vetoing reasonable Republican initiatives sent to her office on the Ninth Floor of the Arizona Executive Tower. Her previous words, however, are already being used to hold her accountable – even before the legislation reaches her desk. An Arizona-based researcher tweeted a reminder of a months-old Hobbs’ statement to a local media outlet on this issue, where she stated that she was “not going to say no to anything if there’s a way to provide relief for Arizonans.”
Democrat Governor Katie Hobbs hasn’t been willing to compromise on Republicans’ proposals for economic relief for Arizonans, but her one idea for a targeted tax exemption has attracted bipartisan support as it moves through the legislative process.
HB 2401, sponsored by Democrat Alma Hernandez, “exempts feminine hygiene products and diapers from transaction privilege tax and use tax,” according to the overview provided by the Arizona House of Representatives. Republican Representatives David Cook and Steve Montenegro are two of the five co-sponsors on the bill.
Representative Hernandez’s bill has sailed through House committees, passing the Appropriations Committee with a 12-0 vote (with two members voting “present” and one absent) and the Rules Committee with a unanimous 8-0 tally.
Earlier in February, Hernandez explained her introduction and support of this policy, saying, “This would bring meaningful savings for families across AZ who are in need. I am hopeful that this year we will finally get it across the finish line and on @katiehobbs desk.”
📢 ATTN: I recently introduced HB2401 #bipartisan TPT; diapers; feminine hygiene; exemption. This would bring meaningful savings for families across AZ who are in need. I am hopeful that this year we will finally get it across the finish line and on @katiehobbs desk ✍️🏽 #AZlegpic.twitter.com/DJNgAIZuKb
Certain Arizona interest groups applauded the passage of this bill from committees, which placed it closer to a vote on the House floor. Arizona List tweeted, “Thank you Rep. @almaforarizona for introducing HB2401, which would eliminate tax on diapers and feminine hygiene products to make them affordable and accessible to all Arizonans. Congrats on its passing and thank you for your leadership on this hygiene equity issue.”
Before being selected as Governor Hobbs’ latest nominee to lead the Department of Child Safety this month, David Lujan took an opposing view to HB 2401, arguing, “Wealthy households do not need a $7 monthly savings on the sales tax for diapers. A better approach to this issue is a grant program which would provide free diapers to low-income parents.”
HB2401 is being heard in House Approps on Monday. Wealthy households do not need a $7 monthly savings on the sales tax for diapers. A better approach to this issue is a grant program which would provide free diapers to low-income parents. https://t.co/RuhYi5FSgj
This exemption was one of Governor Hobbs’s first proposals upon taking office on January 2, which she highlighted the following week in her first State of the State address to the Arizona Legislature.
Our government can do more to support working Arizonans. That’s why I’m proposing:
⚪️State level child tax credits ⚪️State sales tax exemptions for diapers and feminine hygiene products pic.twitter.com/XGE9u5D0qC
Hobbs later tweeted out, “Arizonans shouldn’t have to choose between paying their bills or getting what they need to be healthy. But with rising costs, everyday items add up. Eliminating the state sales tax on feminine hygiene products is a real step to provide meaningful relief.”
Arizonans shouldn’t have to choose between paying their bills or getting what they need to be healthy. But with rising costs, everyday items add up.
Eliminating the state sales tax on feminine hygiene products is a real step to provide meaningful relief. https://t.co/5ANaSjytit
Should this piece of legislation reach the governor’s desk, it would be a lock for a swift signature from Hobbs to enact it into law. However, Arizona legislative leadership could hold the bill in one or both of the chambers to extract concessions from the Governor’s Office on Republicans’ policy demands.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Another Republican-led proposal to stimulate and incentivize business development in Arizona is moving through the legislature – though it is unsurprisingly meeting serious resistance from the other side of the aisle.
Senator Steve Kaiser sponsored SB 1559, which deals with a reduction in the income tax and fees for new businesses across the state. According to the purpose of the legislation provided by the State Senate, the bill “prescribes a threshold of five percent of state contracts the Arizona Department of Administration (ADOA) is encouraged to award to new businesses each year and exempts a new business and a person who is establishing a new business from filing fees to establish the new business.” It also “establishes an individual and corporate income tax subtraction in prescribed amounts for a new business’s first three years of operation.”
The prescribed amounts for individuals (income received from the new business) and corporations (Arizona gross income) are 100 percent for the first year of operation, 50 percent for the second year, and 25 percent for the third.
Earlier this week, Senator Kaiser’s piece of legislation passed the chamber with a party-line 16-12 vote – with two Democrat Senators not voting (Burch and Gonzales). This action followed two, prior partisan votes in Senate Committees– first in the Finance Committee back in February, where SB 1559 cleared 4-3; and in the Rules Committee, 4-3.
The Joint Legislative Budget Committee (JLBC) previously published data from the U.S. Census Bureau’s Business Formation Statistics, showing that there were 7,919 business formations in Arizona in 2022. The JLBC also projected that “the number of new businesses will grow to 8,523 in 2023, 9,173 in 2024, 9,872 in 2025, and 17,561 in 2026.”
Earlier in the Senate Finance Committee, Democrat Senator Mitzi Epstein explained why she was voting against the transmission of the bill to the full chamber, saying that though she was a small business owner and understood the need for these businesses to receive help and access to resources, she believed the provisions of this legislation would be “ripe for abuse.” She feared that SB 1559 would “create a whole new industry” of entrepreneurs helping small businesses take advantage of the tax and fee incentives provided by this proposal (if enacted).
In the committee, Senator Kaiser, the bill’s sponsor, touted his previous experience as a business owner and empathized with young business owners (especially those businesses under five years old) trying to keep their operation afloat and financed in the early years. He stated that “we need to really support our young businesses as much as possible. They do produce the most new jobs compared to existing small businesses and large businesses, and whatever we can do to help them survive and thrive is going to be helpful.”
Another Democrat Senator, Brian Fernandez, told the Finance Committee that he was a no, but he possibly could be swayed to flip his position if there were changes to the bill, inferring that his suggested tweaks mirrored the concerns expressed by his colleague, Senator Epstein.
Representatives from the Arizona Firearms Industry Trade Association and North Phoenix Chamber of Commerce supported this legislation through the Senate process, while a representative for the Arizona Center for Economic Progress registered opposition to the bill.
Before the vote on the Senate floor, the Arizona Senate Democrats Caucus tweeted that “SB 1559 is another handout for businesses,” and warned that “a new business income tax subtraction could cost Arizona’s General Fund an estimated $34.3M in FY25, $36.5M in FY26, and $38.9M in FY27.”
Arizona’s first-in-the-nation universal school choice program just hit a major milestone, and it is poised for more successes in the months ahead under a Republican’s stewardship.
Last year, the Arizona Legislature expanded the Empowerment Scholarship Accounts (ESA) program to include all eligible K-12 students in the state. Former Superintendent of Public Instruction Kathy Hoffman, a Democrat, was handed the keys to maintain the legislature’s intent for the program. However, Hoffman did not support the universal expansion of ESAs and according to sources, did not take advantage of all available resources afforded to her by the legislature to ensure the program’s positive developments on behalf of students already in – and yet to join – the system.
At the start of this year, new Arizona Superintendent of Public Instruction, Tom Horne, became one of the few Republican statewide officeholders and assumed control of the ESA program, which is under the umbrella of the Arizona Department of Education. Per reports since the transition of power, his administration inherited significant problems with the program, and his staff has had to work around the clock to catch up with the outstanding issues and requests in addition to nurturing the program’s growth.
Recently, though, under Superintendent Horne’s watchful eyes, the program has seen more stability and success than ever before, culminating with a recent announcement from the office that there are now 50,000 students enrolled in the ESA program.
Arizona's first in the nation universal ESA officially hit 50,000 participants today! #EducationForAll
— Arizona Department of Education (@azedschools) March 17, 2023
When asked to respond to the news of this milestone, Superintendent Horne told AZ Free News, “Students should not be trapped in schools that, in their parents’ judgement, do not meet the particular students’ needs. If the schools are afraid of losing students to private or charter schools, they will make a greater effort to please parents with good academic outcomes.”
This news spread quickly around the state and nation – with many advocates and elected officials chiming in to congratulate Arizona and Superintendent Horne.
Congressman Paul Gosar tweeted, “Arizona is leading the country in education reform; 7 of the top 10 charter schools are in AZ and now with ESA, every student has the choice to find the best school he or she wants.”
Arizona is leading the country in education reform; 7 of the top 10 charter schools are in AZ and now with ESA, every student has the choice to find the best school he or she wants. https://t.co/0fRQYKMlpn
Steven Utroska, a Mississippi Director for the State Freedom Caucus Network, wrote, “This is amazing. Could you imagine if 50k students in MS could leave failing government schools and actually get a quality education? It would revolutionize our state, but too many MS politicians would rather pander to the system than provide for the student.”
This is amazing. Could you imagine if 50k students in MS could leave failing government schools and actually get a quality education? It would revolutionize our state, but too many MS politicians would rather pander to the system than provide for the student. https://t.co/kSV9zADNWy
Despite the good news about enrollment numbers with the program, Superintendent Horne and legislative Republicans have their work cut out for them in the months ahead. Democrat Governor Katie Hobbs and legislative Democrats are seeking to defund and undermine the universal ESA program, eliminating school choice for tens of thousands of Arizona students whose families have elected to participate in the historic opportunity to control their children’s education.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Legislation to separate election officials from political action committees is working its way through the Arizona Legislature, though receiving mixed signals from Democrats on their support for the proposal.
HB 2378, sponsored by Representative Leo Biasiucci, “prohibits the Secretary of State, a member of a county board of supervisors, a county recorder or any other officer in charge of elections, or their employee, from being a chairperson, treasurer or other member of a political action committee (PAC),” according to the purpose provided by the Arizona Senate.
The bill passed the House Committee on Municipal Oversight & Elections (MOE) back in January, receiving a unanimous and bipartisan vote of 10-0. It later cleared the House Rules Committee with a 5-3 vote. On the House floor, Biasiucci’s legislation gained 49 votes in support, and only 11 votes in opposition.
After HB 2378 made it past the House MOE Committee in January, bill sponsor, Representative Biasiucci, tweeted: “My bill, HB 2378, just passed the House Municipal Oversight and Elections Committee 10-0. Republicans and Democrats agree, you shouldn’t be involved in a PAC if you also oversee any significant aspect of election operations.”
My bill, HB2378, just passed the House Municple Oversight and Elections Committee 10-0. Republicans and Democrats in Arizona agree, you shouldn't be involved in a PAC(political action committee) if you also oversee any significant aspect of election operations. 🇺🇲
Representative Austin Smith also celebrated the bill’s approval by the House MOE Committee, writing, “An individual who is an elections officer or employee who oversees any significant aspect of election’s operations may not serve on a PAC board.”
The House Committee on Municipal Oversight & Elections just passed @Leo4AzHouse’s HB2378.
An individual who is an elections officer or employee who oversees any significant aspect of election’s operations may not serve on a PAC board.
Earlier this month, HB 2378 was heard in the Senate Elections Committee and received more opposition from Democrats there than in the House – perhaps predicting a frostier reception to the policy if and when it arrives on the Senate floor for a vote. Democrat Senator Anna Hernandez explained that she believed “this bill is overly broad” when casting her vote against the legislation in committee. Fellow Democrat Senator Juan Mendez complained that HB 2378 was “only a symbolic measure,” and Democrat Senator Priya Sundareshan said that “this seems to be a particular measure to punish a particular someone in an intraparty dispute.”
Senator Sundareshan’s comments were a veiled reference to Republican Maricopa County Recorder, Stephen Richer, who, in late 2021, formed a political action committee named Pro-Democracy Republicans of Arizona. The PAC posts its mission on its website: “The Arizona election wasn’t stolen. We Republicans simply had a presidential candidate who lost, while we had many other candidates who won. It’s time we Republicans accept and acknowledge that fact. Candidates come and go. But our democratic institutions are long-lasting, and peaceful transitions of power are a hallmark of the United States. We should not abandon this history in favor of conspiracy theorists and demagoguery. To that end, we are launching this PAC to support pro-democracy Arizona Republicans. We hope you will join us. We will win some races. We will lose some races. But either way, we will be strengthening the processes that have long undergirded Arizona and the United States.”
Richer’s creation of this PAC, while serving as Maricopa County’s top election official, angered many Republicans during the 2022 election cycle.
Senate Elections Chair, Senator Wendy Rogers, cast her vote in support of the bill, arguing, “If someone is in a position to influence the outcome of an election, thank you Rep Biasiucci for calling out the need to separate that kind of person from a PAC which is brought together to assert influence as well.”
HB 2378 awaits a vote in the Arizona Senate.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
