Arizona’s Republican lawmakers are looking to take on the cost of groceries by sending a referendum to the voters that would cap the transaction privilege taxes in municipalities on the sale of food items for home consumption at 2 percent.
The effort has been led by Republican State Representative Leo Biasiucci. It initially began as an outright ban, which proved to be a non-starter with State House Democrats and Governor Katie Hobbs. A bill to accomplish this was already dead on the table with the prospect of a veto from Hobbs, but this has been sidestepped through a compromise, HCR 2021.
“These are things that families need to survive,” Biasiucci told AZ Capitol Times. “This is the right thing to do. The fact that we are taxing people on eggs and milk and bread is insane.”
In a post to X Biasiucci wrote, “My bill to remove taxes from all essential food items like milk, eggs, butter, vegetables, fruit, baby food, beef and chicken passed committee 4-2. My bill also removes taxes from diapers. Taxing our food is regressive and it needs to end.”
My bill to remove taxes from all essential food items like milk, eggs, butter, vegetables, fruit, baby food, beef and chicken passed committee 4-2. My bill also removes taxes from diapers.
A previous version of the measure passed both chambers of the legislature in 2023 only to suffer a prompt veto from Hobbs after the leaders of several municipalities claimed city services, including police and fire departments, would need to be reduced without tax revenue from food sales. In her veto letter, Hobbs claimed, “It’s clear that this bill doesn’t actually eliminate costs for our residents. It simply moves those costs around.”
Rep. Neal Carter, a Republican from San Tan Valley told the Times that there have been significant increases in municipal sales tax revenue from online sales after the SCOTUS ruling in South Dakota v. Wayfair. The outlet reported that from 2019-2024, cities and towns have enjoyed a 60% increase in sales tax revenue, but city expenses have also increased in that time period as well, leaving the local governments reticent to cut spending.
“This is a terribly regressive tax. This is the most regressive tax I could possibly dream up,” Carter told the outlet. “If I was going to dream up a regressive tax, I would tax the one thing that you literally have to have to live. You don’t even, in a sense, have to have a home to live, but you have to have food.”
“I don’t know a single person in Arizona, a voter or a constituent, who’s going to say, ‘Yes, continue to tax me on these things that I have to put on the table for my family,’” Biasiucci told his colleagues. “At a time when inflation is through the roof, these taxes are going higher. You’re paying more.”
Under the compromise passed in the House, a city or town with a tax rate below 2% could elect to increase it up to the limit with voter approval. However, with approximately 70 of the 91 municipalities charging taxes on groceries ranging from 1.5% to 4%, some municipalities would be required to reduce their taxes and either reduce spending or increase taxes in other areas such as property tax.
After passing the House with limited Democrat votes and near total Republican support, the resolution was read in the Senate on March 10th and 11th and is pending review by both caucuses and a final vote.
A bill to exempt retirement savings from the state income tax is being considered by the Arizona House of Representatives.
SB 1371, sponsored by Sen. JD Mesnard (LD-13), would exempt all retirement investment savings, including 401Ks, IRAs, Roth IRAs, and pensions from state income tax for distributions made after an individual is 59 and a half years old.
As explained by the Arizona Senate Republicans in a post to X, the bill “works to reduce financial burdens on Arizonans who are over the age of 59.5 by exempting retirement income from taxation.”
ICYMI: Senator @JDMesnard advances legislation that works to reduce financial burdens on Arizonans who are over the age of 59.5 by exempting retirement income from taxation.
SB 1371 passed out of the Finance Committee yesterday with all Democrats voting no. pic.twitter.com/DZhjqYaFPj
The bill passed the Arizona Senate on March 6th along party lines.
In a press release from the Arizona Senate Republicans, Senator Mesnard stated, “Arizonans deserve to keep more of what they earn so they can plan for retirement at an appropriate age. This bill allows retirees to enjoy their responsible savings while securing a comfortable and stable life in their golden years, free from unnecessary financial burdens.”
He continued, “In a world where the cost of living continues to rise, we need to prioritize the needs of our citizens, making sure they have what they need to succeed. I remain committed to fostering a pro-growth, taxpayer-friendly environment for all Arizonans and look forward to seeing this legislation advance to the governor.”
The bill had its second reading in the Arizona House of Representatives on March 17th and is pending reports from the Rules and Appropriations committees.
A proposed amendment to Arizona’s tax laws could make it significantly harder for cities and counties to raise taxes and fees. Senate Concurrent Resolution (SCR) 1008, sponsored by Senate President Warren Petersen, proposes requiring a two-thirds majority vote from municipal and county governing bodies before they can increase assessments, taxes, or fees.
SCR 1008 builds upon Arizona’s existing tax-related voting requirements. In 1992, Proposition 108 established that any net increase in state revenue—including tax hikes or new fees—requires a two-thirds vote in both chambers of the state legislature. More recently, Proposition 132, passed in 2022, mandated that any tax-related ballot initiative or referendum must receive at least 60% voter approval to become law.
Currently, municipal and county governments must provide a 60-day public notice before imposing new business taxes or fees. However, SCR 1008 would go further by requiring a supermajority vote at the local level before such increases could be enacted.
Key provisions of SCR 1008 include:
A two-thirds vote by a city’s common council would be required to increase any assessment, tax, or fee.
A two-thirds vote by a county’s board of supervisors would be required for similar increases.
The measure declares tax and fee regulation a statewide concern, limiting the ability of local governments to adopt different rules.
The proposal must be approved by voters in the next general election before becoming law.
If approved by the legislature, the measure would head to the ballot for voters to decide its ultimate fate.
SCR 1008 reflects ongoing efforts by Arizona lawmakers to place additional restrictions on tax increases at both the state and local levels. Supporters argue that requiring a supermajority vote will protect taxpayers from excessive government fees, while opponents contend it could limit the ability of local governments to fund critical services such as infrastructure, public safety, and education.
The bill narrowly passed the Senate Government Committee with a 4-3 vote and now awaits further legislative consideration.
If approved by voters, SCR 1008 would significantly change the way local governments in Arizona raise revenue, ensuring that any tax or fee increase has broad political support before becoming law.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
Congressman David Schweikert (R-AZ1) delivered his weekly speech before the U.S. House of Representatives last Tuesday and stated that the looming fiscal crisis of the United States is not an ideological matter but is instead a matter of inevitability.
Schweikert, widely known as a budget hawk conservative on the federal deficit and the trajectory of the national debt, warned that the political culture on both sides of the aisle “remains entrapped in a cycle of partisan folklore.”
In a press release, he stated that “the nation’s debt trajectory—already consuming 40 percent of global sovereign borrowing—is poised to spiral out of control, with interest payments alone eclipsing essential expenditures.”
Schweikert suggested in his remarks that with the Social Security trust fund projected to collapse by 2033, “the nation is blindly entering into an era where senior poverty will double overnight.” But he provided a blueprint for a potential solution that leverages data science and AI-driven efficiencies to close this gap, noting that Congress’ failure to do so has further exacerbated the oncoming fiscal collapse.
He told the House, “If I came to you today and said, ‘Let’s strip any partisanship; we need to find waste, fraud, abuse, modeling issues where we’re doing things the wrong way, where we have models that are decades out of date…’ would you hire an army of auditors? An army of lawyers? Or would you hire data scientists?”
He answered, “Turns out, several years ago, Congress started requiring agencies that send out payments that cover health care costs and that send out checks to start sending error reports. In 2023, the reports came back at $236 billion of improper payments. That’s a stunning amount of money, but that doesn’t mean that there’s $236 billion of improper payments that have been stolen. There’s a bunch that has been, but it’s more complex. An army of auditors would take years to grind through this. That’s why there’s the miracle of technology right now—hire some data scientists.“
Schweikert also suggested a policy of aggressive transparency and candor with the American people saying ,“In 2033, the Social Security trust fund is empty. Our brothers and sisters on Social Security will take a 17 percent to 20 percent cut; we DOUBLE senior poverty in America. And when someone says, ‘Just raise the cap,’ our model shows that in 2034, raising the cap only covers about 38 percent of the shortfall. You’ve wiped out the cash needed to save Medicare, which actually runs out like three years later.”
He continued, citing the COVID shutdown and stimulus as being a serious contributor to the problem, “One of the reasons for this chart is [it’s] trying to demonstrate something very simple, that back before TCJA– the 2017 tax reform– the actual projection of what tax receipts would be– so, before the tax changes– we’re right on track. You see the weird blip there? That was a remarkable amount of spending that happened during the pandemic. We actually just went back to nominal. So, what happens here? What happens when there’s this intense, intense hunger to play this weird blame game instead of being willing to tell our voters the truth?“
In a new report from Common Sense Institute (CSI) Arizona, inflation as measured by the Consumer Price Index (CPI) in the Phoenix metro area, remained under the 2% target for the sixth consecutive month. In February, CSI Arizona recorded a year-over-year inflation rate of 1.8% for the metropolitan area. The national rate is currently +2.8% year-over-year, although it is down since President Donald Trump took office.
According to CSI Arizona, the largest driver of inflation has long been the cost of shelter, which was up +0.7% in February with annual shelter costs rising 1.2% year over year. In a post to X, CSI summarized the report stating, “Phoenix is outperforming most of the country when it comes to rising prices.”
Phoenix’s inflation rate has stayed below 2% for six straight months—offering relief for local households. Meanwhile, national inflation remains at 2.8%—showing that Phoenix is outperforming most of the country when it comes to rising prices.
— Common Sense Institute Arizona (@CSInstituteAZ) March 12, 2025
The report noted, “Among the 23 metro areas measured in the CPI each month, Phoenix ranks 22 in year-over-year inflation (2nd lowest). This is a dramatic change from 2022-2023, when the region consistently ranked among the highest.”
CSI Arizona goes on to observe in the report that the rate of national inflation has historically followed trends in the federal deficit with an approximate lag of 12-24 months and local or state levels are subject to regional dynamics as well, but tend to correspond with the national rate. In December, Fox 10 reported that homelessness in Arizona saw a 3.5% increase since 2023, with over 14,000 people experiencing homelessness.
Nathan Smith, CEO of Central Arizona Shelter Services told the outlet, “The cost of living continues to outstrip what people are making, and we’re seeing that we’re at a bit of an inflection point here in Arizona as we are facing the highest eviction rate that we’ve ever had.”
Arizona lawmakers are facing mounting backlash over a proposed pay raise bill that would increase the salaries of state legislators by a significant margin. Senate Concurrent Resolution 1003, introduced in the Arizona State Senate, seeks to boost the base pay for Arizona legislators, raising concerns about the timing of the proposal and the growing burden on taxpayers in an already financially strained state.
The bill, which passed initial stages in the legislature, aims to increase the base salary of lawmakers from $24,000 to $48,000, a 100% increase. Additionally, it proposes an increase in per diem payments and other benefits. The bill’s sponsors argue that this pay increase is necessary to attract qualified candidates to public office as well as keeping up with inflation.
The bill’s sponsor, Senator John Kavanaugh, says that he’s not worried about potential pushback from Arizona voters. “I do not think those voters wanted their $24,000 raise diluted by inflation to about $11,000,” Kavanaugh said. He said this calculation was based on the buying power that figure had in 1998—the last time Arizona lawmakers received a pay raise.
However, critics of the bill argue that such a significant pay raise for lawmakers comes at a time when many Arizonans are struggling to make ends meet due to rising costs of living and a housing crisis that has left many families in financial hardship. The proposal has raised questions about whether elected officials are out of touch with the economic realities faced by their constituents.
The timing of the bill has led some to question the motivation behind it. Critics argue that lawmakers, many of whom already have full-time jobs outside of their legislative duties, should not be seeking a pay raise while so many Arizonans are still struggling financially. Others believe the pay raise is necessary to ensure current lawmakers can make ends meet.
Democrat Senator Eva Burch recently announced her resignation from the legislature, citing that she’s struggling to make ends meet and to find balance with her legislative work and her job as a healthcare provider. “I know that I am not the first, nor will be the last, good person to find themselves a casualty of legislative pay,” said Burch.
As SCR 1003 makes its way through the Arizona Legislature, the controversy surrounding the proposed pay raise for state lawmakers is unlikely to subside anytime soon. With many Arizonans still feeling the financial pressure from rising living costs, the bill has become a flashpoint in the ongoing debate over government priorities and fiscal responsibility.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
