If you like forking over your hard-earned dollars to woke Hollywood liberals, Arizona lawmakers have you covered.
Last month, the state legislature took on the role of “Minions” for the film industry. As you may recall, the Club previously fought against a movie tax credit bill known as SB1708. After passing the Senate, it failed in the House. But in a shady move, Senate Appropriations Chairman David Gowan resurrected the effort through a strike-everything amendment to HB2156, declaring that Hollywood subsidies were his top issue in budget negotiations and any budget agreement was contingent on its passage. A few days later, the bill passed when a handful of Republicans joined every Democrat to support it. Governor Ducey allowed the bill to become law without his signature on July 6th…
So, how much Hollywood corporate welfare will Arizona taxpayers be on the hook for?
On Wednesday, the Arizona Senate Appropriations Committee passed budget legislation to offer tax credits to movie studios, after a previous effort on the matter failed. Legislators resurrected this effort by introducing it through a strike-everything amendment on HB2156 — its similar predecessor, SB1708, passed through the Senate but failed to make it to the House floor earlier this year. Analysis of the predecessor bill estimated that it would incur losses to the state averaging $150 million.
The legislation would establish a program to promote workforce development and expansion of the movie industry. Further, movie companies would receive credits up to 15 percent if they spend up to $10 million in production costs, 17.5 percent if they spend over $10 million up to $35 million, and 20 percent if they spend over $35 million.
According to the Nashville Film Institute (NFI), the average cost of making a feature film ranges between $100 and $150 million, though it noted that some comedy and animated feature films like those from DreamWorks average between $70 and $90 million.
AZ Free News reviewed the production costs for mainstream feature films in theaters currently; all are well over $35 million. The blockbuster hit “Top Gun: Maverick” had a production budget of $170 million (as of this report, the film has grossed over $900 million worldwide in under a month). Pixar’s latest animated film, “Lightyear,” cost about $200 million to produce. The biopic, “Elvis,” had a significantly lower cost at $85 million.
The legislation would also limit tax credits exceeding $150 million in any calendar year from being preapproved.
Nick Simonetta, a lobbyist, testified to the committee that leadership in both chambers wanted to move this bill at this time. Simonetta said that this version of the bill, HB2156, was an improvement on a predecessor tax credit bill passed by the committee in February, calling the updated bill the “Cadillac” of accountability.
“You cannot claim a credit in this state for the benefit of the program without paying taxes on the expenditures that you’re making,” said Simonetta.
Simonetta testified that HB2156 was ultimately an infrastructure bill that would create a nonexistent industry in Arizona. He referenced two different movie filming complexes being built in the Scottsdale and Buckeye areas.
“The folks investing in these facilities to build movie sound stage complexes and all the things that go with them — the buildings, the office space, the commissary, the mill space, the back lots, everything — this will be investments of hundreds and hundreds of millions of dollars, even just for the first phases of these complexes,” said Simonetta.
State Senator Sonny Borrelli (R-Lake Havasu City) joked that he was only voting for the bill with the contingency that State Senator David Livingston (R-Peoria) didn’t get a movie role.
State Senator Kelly Townsend (R-Mesa) flipped her vote this time around, having voted against the legislation’s predecessor previously. Townsend didn’t offer an in-depth explanation on her change of heart. She joked that Simonetta’s “little extra explanation” past the cut-off time for his testimony was enough to change her mind.
The Arizona Free Enterprise Club criticized the tax credit bill, arguing that it would cost Arizonans hundreds of millions in taxpayer dollars to subsidize Hollywood liberals.
Arizona Republican Party Political Director Jeremiah Cota commented that the tax credits only sweetened the deal for Democrats, and played into “woke” agendas contrary to Arizonan interests.
The state’s previous tax credit program for movie companies that began in 2005 bled the state of millions of dollars. At the time, Canada introduced tax incentives that pulled movie companies away from Arizona and all other states. Incentives like Arizona’s tax credit program were launched in response to Canada as a means of enticing movie companies to return to the states.
Arizona’s tax credit program lapsed officially in 2010, though it was shut down by the 2008 recession.
Less than 24 hours after the Joint Legislative Budget Committee published the proposed budget report late Monday, infighting broke out among Arizona’s House and Senate Republicans.
Tuesday marked lengthy budget discussions in the House Appropriations Committee, but in the Senate discussions were cut off abruptly with an indefinite recess of the Senate Appropriations Committee. Effectively, public budget talks ended before they started in half of the State Capitol.
State Senator David Gowan (R-Sierra Vista) said that the House didn’t honor its agreements to pass some bills; one of those significant ones being the Arizona Board of Regents (ABOR) continuation.
“The House has decided that they will not honor the deals we created together and move things forward. I know there’s some media out there, social stuff going on, that they’re trying to pin us and maybe leverage us. But the point is here, they blew the deal,” said Gowan.
Gowan added that he wasn’t willing to call the committee together later on in the day, either. It appears that House legislators reneged on some serious closed-door talks — enough to upset him.
“It would be pretty hard for me to want to come back and help people who wish not to honor deals. In that effort, it’s just not appropriate in what just occurred, so I want that out to the world,” said Gowan.
However, State Representative Travis Grantham (R-Gilbert) contended that he’d never heard of these deals as the House Rules Committee Chairman. He criticized Gowan’s preferences as “special interest” legislation that was “fat, bloated, […] unconstitutional,” and adverse to Republican interests. Gowan didn’t reply.
“I have never discussed a deal, agreed to a deal or been part of some secretive deal to move certain Senator’s special interest bills that are fat, bloated and in some instances likely unconstitutional,” wrote Grantham. “And further, why would we invite and pay an industry, with taxpayer dollars to come into our great state when they will ban, boycott and take away major meetings, corporations and events because of our Republican majorities and sound policies? #BadIdea”
Those weren’t the only serious breaks from presenting a unified Republican front on the budget. Several individual Republican legislators vocalized dissatisfaction with the budget emphatically on social media and during committee votes.
As the majority, the GOP will have to resolve those opposed within its membership if it hopes to secure the budget’s passage before the new fiscal year begins next Friday, July 1.
Among those opposed to the budget are State Senator Michelle Ugenti-Rita (R-Scottsdale). She asserted that the budget wasn’t fiscally responsible in the face of a looming recession. Ugenti-Rita scorned provisions of the bill as “pet projects” for fellow members.
That contradicted how State Representative Regina Cobb (R-Kingman) characterized the budget during the House Appropriations Committee on Tuesday. Cobb said that the proposed budget bills would afford the state with an 8 to 10 percent cushion — enough to “weather the storm” of a pending recession, asserting repeatedly that paying off the pension debt and rollovers would remove troublesome burdens in coming years.
“Are we going to flatline tomorrow or July 1? Absolutely not, but we’ve projected it to be fiscally conservative,” said Cobb. “I think if we’re going into a recession, we’re paying off a lot of debt that could be hanging over our heads during a recession.”
State Representative Jake Hoffman (R-Queen Creek) also opposed the budget. He declared that the budget would only worsen an impending sustained recession and current, serious economic destruction. Hoffman criticized the raises to state employees and judges of up to 15 percent. Although Hoffman was the only Republican committee member to vote against the bill, the legislator said that the budget doesn’t reflect the majority’s platform.
“Everything in [our constituents’] lives are going up, and they’re not getting raises right now. If they are, they’re under the inflation rate,” said Hoffman.
Arizona Free Enterprise Club, a free market policy and advocacy organization, asserted that extraneous funding for agendas contrary to the interests of Arizonans were sprinkled into the budget. In a statement to AZ Free News, President Scot Mussi declared that the budget largely fulfilled Democrats’ wishlist.
“The proposed budget deal includes hundreds of millions in new spending, subsidies for Hollywood liberals to make movies, tax hikes for a Green New Deal transit plan in Maricopa County and special interest pork to buy Democrat votes,” said Mussi. “We should be working toward a budget that has full Republican support, not a Build Back Broke budget supported by Democrats.”
By and large, Democrats focused their comments Tuesday on lamenting the budget’s K-12 spending. Some accused the budget’s design as a “shell game.” Several noted that they didn’t like the idea of funding more border security.
One of the most vocal opponents of the budget, State Representative Kelli Butler (D-Paradise Valley), called the ongoing revenue calculations “irresponsible” during committee. Butler also said that she and a majority of Arizona voters wanted $1 billion for K-12 education. Butler accused the budget of shell games related to taxation that made education funding more vulnerable.
Despite the ongoing economic turmoil and near-universal expectation of a recession, Butler asserted that the economy was “thriving.” Butler also took issue with the fact that she was still getting briefings by midnight and memos from staff at one am early Tuesday, arguing that no legislators had time to figure out what’s all in the budget.
Present at the State Capitol were educator activists with the Arizona Education Association (AEA) rallying for more teacher pay using the $5.3 billion surplus.
Those for the budget praised it for getting more things right to address the state’s current needs. One Democrat, State Representative Cesár Chávez (D-Maryvale) signaled support for the budget, pointing out during committee that the legislature had a little over a week before its deadline for the budget hits. He concurred with his Democratic peers that K-12 education needed a “true, historic investment,” but that he had a responsibility to make the budget work ahead of the deadline.
State Representative Michelle Udall (R-Mesa) offered a list of positives within the budget solving statewide problems: over $1 billion to solve water supply problems; over $1.6 billion overall increase in K12 spending, which meted out to $750 per pupil or a $23,000 increase per classroom; over $1 billion in debt payoff in unfunded liabilities and pensions; over $1 billion increase in public safety (police, fires, courts); and over $500 million to increase health care like in diabetes management training and postpartum care.
A last minute bill which could give voters the chance to significantly increase the pay for Arizona’s 90 lawmakers and double the length of terms for state senators is set to be heard Monday.
The Arizona Legislature is in session at least 100 days each year starting in early January. Under current law, voters have the final say in setting the annual salary for the state’s 30 senators and 60 representatives.
That rate is $24,000 a year which has not changed for nearly 25 years.
However, Sen. David Gowan and Rep. Regina Cobb are supporting legislation under Senate Bill 1180 which would ask voters in November to set legislators’ pay at 60 percent of the governor’s salary. The governor’s annual pay is currently $95,000, meaning lawmakers would be paid $57,000 a year starting in January 2023.
But it is not only pay that would double for a state senator like Gowan, who represents all of Cochise and Greenlee counties, as well as southern Graham County and a portion of Pima County.
SB1180 includes language asking voters to change the length of Senate terms from two years to four years. And although state representatives would still serve two-year terms, all lawmakers would be allowed to serve up to 12 years in each chamber, for a total of 24 years if a lawmakers runs between the two chambers.
The current limit is eight years in each chamber, or 16 years total as a lawmaker.
To get the bill heard at this point in the session, Cobb has introduced an amendment to strike all the language of Gowan’s current SB1180, which was a COVID-19 expenditure reporting bill already passed by the Senate. The “strike everything amendment” is 25 pages that if cleared by the Legislature would put the provisions in front of voters in November as Senate Concurrent Resolution 1018.
Among the provisions is an overhaul the reporting system for lobbyists who make campaign contributions or expenditure on behalf of a state lawmaker.
According to SB1180, the current quarterly reporting of such expenditures would be replaced with a new mandate that those expenditures be reported within five business days. It also significantly increases the type of gifts to a state officer or employee or a member of the officer’s or employee’s householdwhich would have to be publicly reported.
Currently there is a long list of exemptions to the gift rule, allowing some public officials and employees or their families to accept travel, lodging, and speaking engagement fees without the “gift” ever being reported to the public.
The new transparency rules related to lobbyist activity would also require a new web-based digital platform application to allow for real-time entry of information and public accessibility. SB1180 would allocate $10 million to the Arizona Secretary of State to cover that cost.
On Monday, Cobb’s House Appropriations Committee will hear SB1180’s strike everything amendment. If it passes, the new version of the bill would go back to the Senate for approval because the language varies from what the Senate passed last month.
Gowan has been a strong advocate for ensuring more Arizonans can afford to run for the Legislature, particularly those who live hours away from Phoenix.
In the 2021 legislative session, he spearheaded a bill to change the per diem rates for lawmakers from outside Maricopa County. Those rates -which had equaled $60 a day for housing and food since 1984- were raised to $207 a day for the first 120 days of session.
Future rates will be adjusted based on the federal winter per diem rates set annually by the U.S. General Services Administration. Per diems are separate from pay or travel reimbursement.
The per diem bill became law when Ducey utilized a rare procedural maneuver to allow the legislation to take effect without a governor’s signature.
Arizona lawmakers are currently living in “La La Land.” No, really. They want to dole out $150 million of your dollars to sign checks to woke Hollywood producers to literally California our Arizona.
SB1708, sponsored by Senator David Gowan, passed out of the Senate last week by a vote of 21-7. It provides a tax credit for a percentage of movie production costs: 15% for productions up to $10 million, 17.5% for productions between $10 and $35 million, 20% for productions over $35 million, and the opportunity for an extra 2.5% on top for positions held by Arizona residents, if the production is filmed in a qualified facility or primarily on location, or if it was produced in association with a long-term tenant in a qualified production facility.
The worst part—it’s refundable. This means that if Hollywood producers wipe out their tax liability to zero, the remaining tax credits come as a check from you, the taxpayer.