Arizonans were denied relief at the grocery stores this week as the Democrat governor and Republican-led Legislature remain far apart on how to provide economic assistance to hard-working, middle-class constituents.
On Tuesday, Governor Katie Hobbs vetoed SB 1063, which would have repealed the food municipal tax across the state.
In a statement explaining her veto, Hobbs wrote: “I’ve heard from dozens of local leaders about the impact this legislation would have on municipalities. From potential cuts to service – including public safety – to increased property taxes, it’s clear that this bill doesn’t actually eliminate costs for our residents. It simply moves those costs around. The bill, originally unveiled as a way to mitigate inflation, does not take effect for more than two years. What’s more, it does nothing for the more than 800,000 Arizonans who use SNAP and WIC benefits for their groceries, as these constituents are already exempt from the tax.”
The governor ended her statement with an exhortation for Republican legislative leadership: “Let’s work together to provide real relief for Arizonans struggling with higher costs.”
Republicans immediately expressed their profound disappointment over the veto and the effect that it would have on Arizonans in need of financial relief. Arizona Senate President Warren Petersen responded, “Senate Republicans have been working toward introducing legislation necessary to provide financial relief to all Arizonans, especially low-income families who are feeling the tremendous burden of inflation. It’s very clear the governor has no interest in helping with that financial burden.”
Senate Majority Leader Sonny Borrelli said: “This veto is a disgraceful windfall for cities and an absolute gouge for families. We’re not only paying inflated prices to feed our families, but we’re also paying more in taxes as the cost of food rises. Food is not a luxury; it is a necessity. A tax on our groceries is regressive and hurts everyone. Over the next four fiscal years, cities and towns are estimated to receive an average of $2.3 billion per year in state-shared revenues, which is an increase of $844 million more than the average for the last four fiscal years. And yet the governor vetoed this bill, only padding cities’ bloated budgets instead of leaving more money in the wallets of hardworking taxpayers.”
House Majority Leader Leo Biasiucci tweeted, “During a time of record inflation, families are struggling to put food on the table. Yet, Gov Hobbs vetoes a bill to remove taxes on groceries. Instead, she wants to remove taxes from tampons & diapers.”
Legislative Democrats applauded the governor’s veto. The Arizona House Democrats Caucus wrote, “Soundbite legislation that would handcuff ability of smaller cities and towns to provide public safety, streets, parks, libraries and senior centers. Good veto!”
Governor Hobbs had many other supporters of her veto from around the state. The Arizona League of Cities and Towns, which had opposed the bill as it progressed through the state legislature, tweeted, “Thank you @governorhobbs for vetoing SB1063 and recognizing that the food tax helps fund critical services in many cities and towns and its elimination does not provide targeted relief for those that most need help.”
Goodyear Mayor Joe Pizzillo also championed the governor’s action, stating: “@GovernorHobbs veto of SB1063 protects local decision-making and funding for critical services like public safety, parks & recreation, and infrastructure. #Thankyou”
A divided Arizona government remains more divided as ever as the deadline for the state budget approaches.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
In January, Arizona’s 55th legislature will convene with new challenges. Republicans managed to maintain slim majorities in both chambers, but what can we possibly accomplish with a Democratic Governor? It will certainly be more difficult to get pro-liberty legislation signed into law, but there are still tangible goals worth fighting for. We just have to be realistic and narrow down our agenda.
The Republican Liberty Caucus of Arizona has published its top five priorities for the 2023 legislative session. These are pragmatic ideas to advance the principles of individual rights, limited government, and free markets, even under a Democratic Governor. Several of these goals were included in Senate President Warren Petersen’s plan to help Arizonans combat rising prices, which we fully support.
The first priority is the same for every legislative session: kill the bad bills. Moderate legislators will be looking for ways to compromise with our new Governor by promoting legislation that will expand the size and scope of government. Our primary focus will be to fight these bills in the legislature, preventing them from reaching the Governor’s desk.
Our second priority is one of Senate President Petersen’s priorities: to repeal the municipal rental taxes on residential properties. These are taxes imposed on residential rental properties by cities and towns. The cost of housing has skyrocketed in recent years, especially in Arizona. As many municipalities sit on massive surpluses, they should be looking for ways to cut taxes and alleviate the cost of housing. Sadly, few cities have done this. It’s time for the legislature to change Arizona statute by revoking the cities’ authority to tax residential rental properties. Rep. Shawnna Bolick ran a bill last session to repeal this tax, and it passed the House with bipartisan support. With support from multiple Democratic lawmakers, this is something Governor Hobbs might sign.
Priority number three is also one of Senate President Petersen’s priorities: eliminate the food tax. One of the reasons why cities are seeing record high revenues is because inflation forces people to spend more. This means more sales tax revenue. Food is a necessity and a tax on food is a regressive tax that especially hurts the middle and lower class who are already struggling with inflation. Some Republicans might object to a repeal of food sales taxes because sales taxes are less invasive than income or property taxes. While we agree a reduction to income or property taxes would be preferable, we should be looking to cut any and all taxes wherever there is a consensus for it. By amending statute to prohibit municipalities from taxing food, we would compel local governments to address the rising cost of living by cutting an unnecessary, regressive tax. We can try to pass this as a normal bill, but if the Governor vetoes it, we could also pass it as a referral that goes to the ballot for the voters to decide, bypassing the Governor’s pen. High inflation has decreased the appetite for taxes, as seen by the rejection of Proposition 310 and many failed bonds and overrides. If placed on the ballot, a repeal of the food tax would likely pass.
Our fourth priority is to prohibit the Governor, or any state agency, from shutting down private businesses under the guise of an emergency declaration. Last session, Governor Ducey signed Sen. Warren Petersen and Rep. Leo Biasiucci’s bill to ban cities and counties from shutting down private businesses. Now we must ensure that the state government cannot impose lockdowns. The Governor would surely veto this bill, but the legislature can instead pass a measure to put this on the ballot in 2024. Once again, this would allow the legislature to go around the Governor. It’s unclear if the voters would pass this measure, but with a leftist Governor, we must do all we can to reign in the powers of the executive branch. We cannot allow our private businesses to be shut down by petty tyrants.
Finally, priority number five is a criminal justice reform that would allow simple drug possession offenses to remain undesignated, allowing the court to designate the offense a misdemeanor upon completion of probation. This is not soft on crime because it would only apply to first-time, victimless drug possession charges, and the offense would still be designated a felony if the individual fails to complete probation. By giving people a chance to avoid a permanent felony, this would be a huge incentive for first-time drug offenders to complete probation and become productive, law-abiding citizens. The end result would be reduced recidivism and less taxpayer spending. This bill was sponsored by Rep. Neal Carter last session, and it passed the House unanimously before getting stuck in the Senate. With new committee chairs and bipartisan support, this reform has a real chance at passing.
This is not an exhaustive list, but these are the top five priorities of the Republican Liberty Caucus of Arizona heading into 2023. This legislative session will look different, but there is always work to be done to advance liberty. We must remain vigilant as we fight to keep Arizona a free and prosperous state!
Three consumer taxes should be immediately suspended to help Arizonans deal with post-pandemic inflation, and two of those taxes should be abolished altogether, State Sen. Warren Petersen argues.
On Tuesday, Petersen (R-LD12) called for a temporary halt to Arizona’s 19 cents per gallon gasoline tax. He also wants to see the food tax and the residential rental tax not only suspended, but also eventually abolished.
Petersen doubled down on his proposal Wednesday, telling KFYI’s James T. Harris there is “no reason” his proposal cannot be implemented in light of Arizona’s more than $1 billion budget surplus. Especially with a Republican-controlled Legislature and a Republican governor.
“People are absolutely reeling from inflation right now but we have state and local governments that have more cash than they’ve ever had before,” Petersen said, adding that his proposal would bring “immediate relief to some of the people that need it the most.”
Suspending the gas tax until the end of 2022 would help Arizonans at the pump, Peterson explained. He added that the move could bring even further relief for consumers due to high gas prices being integrated into the cost of everything else people buy.
The state’s huge budget surplus is more than enough to supplant the $300-$350 million in gas tax revenues needed to fund transportation projects across the state, Petersen said.
While a gas tax holiday would be temporary, Petersen is calling on his fellow lawmakers to support a permanent end to the food tax in Arizona.
“That just hurts the poor more than anybody, and only some cities charge it,” Petersen told Harris.
As to his third suggestion of the abolishment of residential rental taxes, Petersen questioned why a special consumer tax is charged of those living in a rental unit.
“Nobody should charge this,” he argued. “People don’t pay a tax every single time they pay their mortgage, but yet tenants every single time they pay their rent they pay a tax on their rent.”
Petersen believes the time is right for Gov. Doug Ducey to call a special session so that lawmakers can provide immediate relief through the huge budget surplus.