Last week, Arizona State Senator Shawnna Bolick issued a statement about economic calamities affecting families around her state.
Bolick said, “Since Kamala Harris and Joe Biden entered office, Arizona families have felt the weight of crippling inflation caused by their bad policies. In 2022, inflation hit its highest level in 40 years at 9%, and the price of every basic necessity skyrocketed. While the Federal Reserve reports inflation has since eased to near the target 2% threshold, and despite this month’s interest rate cut of 0.5%, conditions are not improving for hardworking Arizonans. Grocery store prices are 25% higher now than just before the pandemic. Homes are no longer affordable for our working class. Eviction filings have hit record highs in the Valley.”
Bolick added, “Republicans at the Legislature have made it our mission to lessen these burdens. We eliminated the tax renters pay on housing. We passed a ban on grocery taxes that sadly every Democrat voted against and the Governor vetoed. I vow to continue fighting for policies that will allow you to keep more of your money next legislative session.”
Last year, Arizona Governor Katie Hobbs signed SB 1131, which Republicans led through the state legislature. This legislation eliminated the rental tax for Arizona tenants.
FOR IMMEDIATE RELEASE: Senate Republicans Deliver Inflation Relief to Struggling Arizonans by Prohibiting Sales Tax on Rent ⬇️ pic.twitter.com/8tGzEhrJxj
According to Arizona Senate Republicans, “There are approximately 70 municipalities within our state charging this tax, while cities and towns continue to collect record revenues. From fiscal years 2019 to 2023, state-shared revenues from both sales and income taxes combined grew $733 million, or 59%. This increase is on top of any sales taxes or property taxes individually levied by each city. Between FY 2024 and FY 2025, those shared revenues are expected to grow by an additional $389 million.”
Senate President Warren Petersen issued the following statement in conjunction with the announcement: “Charging a rental tax is bad tax policy. In fact, Arizona is one of only two states in the nation currently allowing this. While our first attempt at eliminating the tax passed out of the Legislature with solely Republican support and was eventually vetoed by the Governor, we’re grateful our Democrat colleagues came to the table with us and realized the real tangible relief this reform will provide.”
Earlier that session, Hobbs vetoed SB 1063, which would have repealed the food municipal tax across the state.
FOR IMMEDIATE RELEASE: Governor Continues Unwillingness to Help Arizonans Amid Crippling Inflation ⬇️ pic.twitter.com/qwOJSxorOH
After the governor’s action against the Republican proposal, 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.”
Senator Bolick faces a tough General Election fight in November for her bid to return to the Arizona Legislature for another two years. Arizona Legislative District 2 is one of the most competitive in the state, with a 3.8% vote spread in the past nine statewide elections. It is very winnable for Republicans, however, as the party has emerged victorious in six out of those nine elections.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Arizona’s housing costs continue to climb at a concerning rate for minimum-wage workers.
The National Low Income Housing Coalition recently released its annual report, showing how much renters need to earn to afford a modest apartment in each state across the United States. Arizona checked in with the 12th highest housing wage among all 50 states and the District of Columbia and Puerto Rico.
According to the report, Arizonans need to bring home $29.93 an hour to afford a two-bedroom rental home. Individuals would need to work 86 hours each week at the state’s $13.85 minimum wage to hold onto that two-bedroom apartment – or 71 hours for a one-bedroom rental.
In comparison, Arizona’s neighbor to the west, California, has the highest housing wage in the country. California renters must make $42.25 an hour to afford a two-bedroom rental home, and the state’s minimum wage workers ($15.50/hour) would need to toil for 109 hours each week to maintain their living arrangements.
Arkansas took the trophy for the State with the lowest housing wage around the union with a $16.27 per hour rate required to afford a two-bedroom rental home and only 59 hours of employment per week at minimum wage ($11.00/hour).
Arizona has 2,683,557 total households according to the report, and 917,899 of those households classified as renters (34% of households in the state). The percentage of renters in California is 45% of total households, while that number is 34% in Arkansas.
The report shows that the fair market rent for a 1-bedroom apartment in Arizona is $1,287 and $1,556 for a 2-bedroom apartment. The median renter household income ($52,391) would support a monthly payment of $1,310 for an apartment.
Addressing the increasing housing costs for the state was a priority for Arizona legislators, though those efforts produced few results. Republican lawmakers were able to strike a deal with Democrat Governor Katie Hobbs during the final stretch of the extended session to prohibit the rental tax for Arizona tenants. Arizona Senate Republicans claimed that “approximately 70 municipalities within our state charge this tax,” and that “this tax can cost as much as $200 per month.”
Senate Majority Whip Sine Kerr applauded the signing of this bill, explaining how important the removal of rental taxes across the state would be for countless Arizonans. She stated, “Rental prices aren’t going down anytime soon, and Arizona tenants are agonizing over just how much more expensive it is now to rent an apartment or house than ever before. For Metro Phoenix, June of this year saw the second-highest monthly total of evictions since the 2008 Great Recession. According to Maricopa County records, landlords filed to evict nearly 7000 times last month. We needed to act promptly. This bill will provide some help, and I’m proud the Majority Caucus spearheaded this change in tax policy.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
After vetoing a collection of budget bills last week, Democrat Katie Hobbs was ready to jettison another Republican-led policy as a divided state government remains far apart on solutions to help Arizonans weather the storms of a harsh economy.
Earlier this month, Republicans in the Arizona House and Senate passed legislation that would prohibit “municipalities from levying municipal tax on the business of renting or leasing real property for residential purposes,” sending SB 1184 to Governor Hobbs’ office on the Ninth Floor of the Executive Tower for consideration.
Governor Hobbs vetoed SB 1184, but her veto explanation struck a different tone than the one delivered to legislators after her rejection of their budget. The governor gave the following explanation for her veto: “I appreciate the legislature’s interest in addressing rising housing costs, particularly for renters. Lowering costs for Arizona families is a priority of my administration. Unfortunately, this bill suffers from two important defects at this time. First, this bill lacks any enforceable mechanism to ensure relief will be provided to renters. As noted by the legislature’s own attorney, provisions in the bill that purport to require that tax savings be passed on to renters face challenges under both the state and federal constitutions. If we are going to promise relief to renters, it’s important that we are able to ensure they actually receive it.
Hobbs then addressed the opposition to the legislative proposal from multiple cities and towns, including quotes from John Lewis (the President and CEO of PHX East Valley Partnership Board) and Yuma Mayor Douglas Nicholls (the League of Cities and Towns President), who had both urged the governor to veto SB 1184.
Republicans in the Legislature were not happy with Hobbs’ action to stop their bill from becoming law. Senate bill sponsor, Steve Kaiser, responded to the governor’s veto, saying, “Rent is the costliest expense for hundreds of Arizonans, but Governor Hobbs is clearly not among their ranks. If she was, she would know that in 70 cities across our state, renters see and pay for a rental tax line item on each monthly bill. Senate Republicans offered a substantive plan to fight spiking inflation that Hobbs vetoed. Governor Hobbs inflation plan? A limited tax exemption for diapers and feminine hygiene products. By her own logic used to veto SB 1184, her proposal would be a tax break for grocery stores, not consumers. Grocery stores, just like landlords, collect and remit tax paid for by consumers. Unlike Hobbs, our citizens don’t have the luxury of falling back on the semantics of tax collection, they feel the hurt of onerous taxation in their wallets.”
House Majority Leader Leo Biasiucci tweeted, “Removing the Home/Apartment rental tax would save Arizona renters $100-$200 per year. Yet, Governor Hobbs vetoed the rental tax repeal bill today. This idea that she’s a Governor for the people is now officially a lie! Watch, she’ll veto the grocery food tax repeal bill next!”
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!
On Wednesday, Senate President-elect Warren Petersen (LD-14) published his plan to help counter the burgeoning inflation crisis.
Petersen declared that four approaches would relieve the pressure of rising costs to Arizonans: eliminating rental and food taxes, increasing the housing supply, and reducing or eliminating occupational license fees. The president-elect insisted that the state could spare these cost-reducing measures because it has a surplus of funds.
“[H]ardworking taxpayers are reeling during this period of runaway inflation and are having a tough time paying for the most basic necessities,” stated Petersen. “These initiatives are not too difficult to accomplish. Local and state governments have surpluses in their coffers.”
The rental tax elimination proposal would allow tenants to stop paying a tax on top of their rent. Petersen reasoned that homeowners don’t have to pay a tax every time they pay their mortgage. He also noted that the state earns plenty from taxes to landlords.
“This initiative alone can put thousands annually into the pockets of tenants,” stated Petersen.
As for the food tax elimination proposal, Petersen argued that the state shouldn’t be taxing a necessity.
“This tax is regressive and hurts the poorest of the poor,” stated Petersen. “Let’s ban it completely.”
The increased housing supply proposal would cut through bureaucratic tape. Petersen indicated that incoming legislation would clear and expedite the administrative hurdles for land development and housing approvals.
“20 years ago, you could take a property from dirt and build a house within six months. Those days are long gone as a litany of hurdles have been placed in obtaining approvals for land development and housing. Now, it can take as long as four years!” observed Petersen.
The proposal to reduce or eliminate occupational licensing fees would likely boost jobs, with Petersen indicating that reductions of those fees would be half of what they are now.
Petersen shared that Finance Chair J.D. Mesnard (LD-13), Appropriations Chair John Kavanagh (LD-03), and Government Chair Jake Hoffman (LD-15) were on board to make these initiatives a reality.
Constituents interested in tracking legislative updates, especially concerning these four sweeping inflation-reduction initiatives, may access regular communications such as Kavanagh’s weekly “Kavanagh’s Korner” video reports.
The legislative equivalent of spring training began today in the senate with a pre-session orientation meeting of all senators. I will be keeping everyone informed with spontaneous tweets and my weekly Kavanagh’s Korner constituent video reports. pic.twitter.com/gI5Na1SySV
— Representative John Kavanagh (@JohnKavanagh_AZ) December 7, 2022
Arizona has the highest inflation rate in the country — specifically the Phoenix area, charting at over 12 percent. Inflation for the Valley rose by about two points every couple of months beginning in August of last year. Inflation reached a high in August at around 13 percent.
