A contentious fight is brewing in the Arizona legislature, the possible reauthorization of the Arizona Commerce Authority (ACA). Governor Hobbs has made the reauthorization a top priority of her administration this session, mentioning it in her State of the State address. But the debate has an ironic element considering the history of its inception.
In 2011, the state was crawling out of a crippling recession, having lost literally hundreds of thousands of jobs and even selling off the state Capitol buildings to dig out of a deficit. The legislature, in collaboration with the Brewer Administration, introduced an omnibus bill sold as a “jobs package” which refashioned the bureaucratic Department of Commerce into the Arizona Commerce Authority, and incorporated both new targeted tax credit programs and incentives, as well as phased in corporate income and commercial property tax cuts.
Democrats a Decade Ago Opposed the ACA
The bill at the time was uniformly opposed by Democrats, including then Representative Katie Hobbs. Republicans mostly coalesced around the bill, with a handful of key conservatives voting in opposition of the legislation, largely in protest of the corporate welfare and multi-million-dollar “deal closing” fund with no legislative oversight. For those unfamiliar with the deal closing fund, it is a large pot of money appropriated to the Director of the Commerce Authority to throw at corporations to convince them to relocate to Arizona.
After the ACA was passed and signed into law, it would seem that only a few conservative voices and the Club itself would prove prophetic at the lack of oversight and inevitable gift clause violations, which is a constitutional protection from the government subsidizing private industry…
A bill proposed by state Sen. Warren Petersen, R-Gilbert, to require cities and counties to have a 2/3 vote to increase taxes passed out of the Senate Government committee.
Every Republican voted yes, while every state Senate Democrat voted no.
Senate Bill 1056 “Prohibits the common council of a municipality from increasing an assessment, tax or fee without a two-thirds vote of the common council of the municipality and “Prohibits the board of supervisors of a county from increasing an assessment, tax or fee without a two-thirds vote of the board of supervisors of the county.”
“Basically, if you want to increase taxes or fees, you need to have a supermajority, or a two-thirds vote, I should say,” Petersen said in summation of the bill during the state Senate Committee On Government meeting.
Taxes are often the biggest expense people face in their lifetime, Petersen said.
“Right now, our citizens are reeling from inflation, which has been caused by a large part by Washington, D.C. and our printing of money and overspending,” Petersen said. “The last thing we need to do right now is increase taxes and fees on our citizens.”
Governments need to find more efficient solutions, according to Petersen.
“I saw one study,” Petersen said, “It shows over your lifetime. You spend over one out of every three dollars of your money on taxes, whether you’ve got income tax when you receive money. When you spend money, sales tax, you’ve got property tax. You have utility taxes. I could go on and on and on.”
Government is very well represented while the taxpayer is limited, Petersen continued.
“I think this levels the playing field a little more between the taxpayer and the government,” Petersen said.
Elizabeth Troutman is a reporter for AZ Free News. You can send her news tips using this link.
Arizona’s Republican Senate President is standing with families over a recent decision from the Internal Revenue Service (IRS).
Late last week, the Arizona State Senate Republican Caucus announced that President Warren Petersen “is working diligently to come to a resolution that will protect the more than 700,000 recipients from having to give the federal government a portion of [the 2023 Arizona Families Tax Rebate] this tax season.”
🚨 FOR IMMEDIATE RELEASE: Senate President @votewarren Works to Prevent Biden's IRS from Taking Advantage of "Arizona Families Tax Rebate" Recipients ⬇️ pic.twitter.com/Y2B2JisOvy
According to the Senate Republicans, the IRS recently made the decision to collect federal income taxes on the rebate, which was passed in the 2023 Arizona budget compromise between legislative Republicans and Democrat Governor Katie Hobbs. The caucus noted that “more than a dozen other states have passed similar legislation, in which the IRS concluded those funds were not considered taxable income.”
On February 10, 2023, the IRS released a determination that taxpayers in many of the states that issued special payments in 2022 would “not need to report these payments on their 2022 tax returns.”
In a statement that accompanied his news release, Petersen said, “It makes zero sense that the IRS is choosing to hurt Arizona families by taxing a tax rebate. I’m thankful for the help from Senator Sinema’s office in working to get this matter front and center with the IRS and U.S. Treasury. With tax season less than two weeks away, time is of the essence. While litigation likely isn’t the best approach, I appreciate the Attorney General’s office reaching out to us on this matter.”
The Senate President was critical of Governor Hobbs’ perceived inaction to protect families in this matter, saying, “I am, however, incredibly disappointed our Governor is again nowhere to be found on an issue that could ultimately cost our citizens tens of millions of dollars. I’m calling on her to not turn a blind eye on this issue, as she did with gas prices last spring, and to work with us on solving this problem for Arizona families.”
Petersen’s sharp rebuke follows a back-and-forth between the Governor’s Office and legislative Republicans this past fall, after Hobbs championed “the deployment of the Arizona Families Tax Rebate.” Hobbs said, “I made a promise that when I took office, I would take every opportunity I had to make it easier for Arizonans to provide for their families and lower the cost of living.”
Hobbs’ actions surrounding the issuance of rebates to Arizona families earned a Cease and Desist letter from attorneys for Petersen and House Speaker Ben Toma. The letter highlighted an agreement in the FY 2024 budget that “[n]o letter relating to the Arizona families tax rebate issued under this section shall…reference the governor’s office.” According to the letter, the Arizona Department of Revenue had “distributed, apparently to all individuals who are eligible for the Families Tax Rebate, a letter that advises them to ‘visit the Arizona Department of Revenue’s online claim portal….’ The advertised URL, however, not only explicitly references the Governor but directs users to the Governor’s own website. Further, clicking the designated link on the homepage brings the user not to the Department’s portal, but rather to another webpage in the azgovernor.gov domain that features a video of self-congratulatory bloviations form the Governor.”
Republican Senator Jake Hoffman shredded the action from the Governor’s Office, stating, “The sad reality exposed by this situation is that Katie Hobbs doesn’t care about anyone other than herself. She tried to play fast and loose with the law, as she so often does, and forced Director Woods to violate it.”
Yesterday the legislature sent @KatieHobbs’ Director of the Dept. of Revenue a Cease & Desist Letter due to ADOR illegally spending millions at the direction of Hobbs.
Under state law, the Director of ADOR is personally liable for the illegally spent public funds, estimated to… pic.twitter.com/lenpnMauv4
Another Senate Republican, T.J. Shope, said, “I know the Governor wanted no part of this tax rebate but thankfully, the Arizona Senate and House caucuses, led by the Arizona Freedom Caucus, stood strong and demanded it be part of the State Budget. When we stick together, we can provide positive things for Arizona’s families.”
I know the Governor wanted no part of this tax rebate but thankfully, the @AZSenateGOP & @AZHouseGOP caucuses, led by the @AZFreedomCaucus, stood strong and demanded it be part of the State Budget. When we stick together, we can provide positive things for Arizona’s families.… https://t.co/JP2VndTeKU
President Petersen will try to make contact with liaisons from the IRS and U.S. Treasury Department in an attempt to reverse the decision from the federal government in the days before the new tax season commences.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Arizona’s leading legislative Republicans are cheering on the nation’s high court as it agreed to hear arguments in a significant case of interest to the state.
Earlier this month, the General Counsel for the Arizona House Republicans, Linley Wilson, announced that the Supreme Court of the United States had granted cert in City of Grants Pass, Oregon v. Johnson and Logan. Senate President Warren Petersen and House Speaker Ben Toma had filed an amicus brief at the Court in September 2023 in the matter concerning “three homeless individuals in Grants Pass (who) filed this lawsuit to try to stop local and state governments from combating the public safety threats, the public health dangers, and the inhumane conditions associated with these homeless encampments.”
The city had received unfavorable opinions from the federal courts at both the district and appeals (Ninth Circuit) levels, leading to the appeal to the nation’s high court.
In their brief, Petersen and Toma asserted that “the Legislature also has a pressing interest in homelessness because it confronts the realities of America’s homelessness crisis every day, including only a few blocks from the state capitol complex. Phoenix, Arizona, is home to one of the nation’s largest homeless encampments, commonly known as ‘The Zone.’ With hundreds of homeless residents, The Zone is a place of intense poverty, frequent crime (including multiple homicides), social instability, and poor living standards.”
The lawmakers also opined, “the Ninth Circuit decided it was better at making policy than elected state legislatures and city councils.” They argued the opinion from the Ninth Circuit “injects the federal courts into a policymaking area reserved for state and local lawmakers, entrenches a plainly incorrect and deeply damaging construction of the Eighth Amendment, and improperly interferes with state and local policymaking on the critically important issue of homelessness.”
Wilson previously pointed to a social media post from California Governor Gavin Newsom about the issue of federal courts inserting case law into “local efforts to clear street encampments,” stating, “This humanitarian crisis is not a partisan issue. The 9th Circuit’s opinions harm the homeless and the Legislature’s ability to craft effective policies.”
This humanitarian crisis is not a partisan issue. The 9th Circuit’s opinions harm the homeless and the Legislature’s ability to craft effective policies. Read the amicus brief filed today by @RepBenToma and @votewarren in SCOTUS👇🏼https://t.co/7VCv5B3MOMhttps://t.co/QyfE8C8gkd
Partisan lines have been drawn over the Arizona Governor’s Executive Budget Proposal for Fiscal Year 2025.
Late last week, Democrat Governor Katie Hobbs released her second budget for the Grand Canyon State. In a statement accompanying the announcement, Hobbs said, “Arizonans are counting on us to make the state we call home the best place to live, work, and raise a family. We made incredible progress during my first year in office, and my Executive Budget proposal builds on this foundation and expands opportunities for every Arizonan to reach their full potential. We are cutting out the wasteful taxpayer spending while making critical investments that will help middle class families buy a home, expand access to childcare, make prescription drugs more affordable, and protect disabled Arizonans and seniors. This is what it looks like to invest in our communities and build a state that works for every Arizonan.”
🧵 I just released the Fiscal Year 2025 Executive Budget – a balanced appropriation that reduces overall spending while investing boldly in affordability, health & safety, and preserving our natural resources. Please read about it below ⬇️ pic.twitter.com/Cbsyj9gEXt
Legislative Republicans were quick to come out in opposition to the governor’s proposal. Senate Appropriations Chairman John Kavanagh wrote, “These elements in her proposal are dead on arrival with the Republican Majority. Her grandstanding of bipartisanship during her State of the State Address is a far cry from the reality of this budget proposal, as her funding cuts strictly target Republican priorities.”
House Appropriations Chairman David Livingston added, “Like last year’s proposal, the governor’s budget is an unserious mess. Her revenue and enrollment predictions don’t reflect reality, and her solution to the deficit proposes cuts to K-12 and water investments. We understand most of this is meant to appeal to her base. When she is willing to engage more seriously, Republicans are ready.”
🚨FOR IMMEDIATE RELEASE🚨 The Legislature Will Not Raise Taxes or Cut School Choice, as the Governor’s Budget Proposes
“Like last year’s proposal, the governor’s budget is an unserious mess,” stated House Appropriations Chairman David @Livingston4AZ . “Her revenue and enrollment… pic.twitter.com/XGPvBcwHSS
Hobbs’ allies in the Arizona Legislature supported her proposal. House Democratic Leader Lupe Contreras released a statement, saying, “We applaud the Governor for producing a budget that protects the priorities that will drive our state forward and that our caucus has consistently championed for our communities – public education, affordable housing, childcare for working families and vital services for the most vulnerable Arizonans. She is listening and leading.”
The Senate Democrat Caucus posted, “This budget is a good first step in providing Arizona families with assistance in affording the high costs of childcare, housing, and prescription medications.”
Today, Governor Hobbs released her FY2025 Executive Budget. This budget is a good first step in providing Arizona families with assistance in affording the high costs of childcare, housing, and prescription medications.
In the inaugural week of the 2024 legislative session, Republicans and Democrats took political shots at one another over the budget in anticipation of the governor’s proposal. Arizona Senate President Warren Petersen accused his Democrat counterparts of “refusing to come to the table for budget negotiations,” threatening that his caucus might have to move on without them. The Senate Democrats Caucus clapped back at the Republican chamber leader, asserting that he had “moved forward on every other budget without Democrats, so this newest attempt at grandstanding falls flat.”
The early back-and-forth between the two political parties follows Democrat Governor Katie Hobbs’ second State of the State address, where she called on legislators to “find common ground” and to “work together to solve this gap.”
Both parties have vastly differing approaches to solving the state’s budget shortfall, though their rhetoric is somewhat similar at the start of the legislative session. In the Senate Republicans’ Majority Plan for 2024, they vowed to complete this mission “without irresponsibly tapping into the Rainy-Day Fund or using budget gimmicks,” promising instead to “use sound fiscal management strategies, like trimming unnecessary spending and prioritizing government’s top functions.” Hobbs stated that her soon-to-be-released budget would “rein in wasteful spending without sacrificing public safety and public education, establish guardrails on unaccountable programs without hurting hard-working families, and tighten our collective belts through increased efficiencies and innovation without gutting programs that support small businesses, seniors, and those in need.”
Last year, House and Senate Republicans approved a budget that was vetoed by Hobbs. Despite many partisan fights in the public eye between Republicans and the governor, Petersen and House Speaker Ben Toma deftly managed a surprise budget compromise, in which their policy priorities remained largely intact. Hobbs will be under increased pressure this time around to extract more concessions from Republicans – especially over the Empowerment Scholarship Account (ESA) program.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
