#AZLeg Votes on Tax Cuts, Term Limits, Minimum Wage, & Childcare

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HB2523 lower minimum wage
HB2523 lower minimum wage

The Arizona House has been moving slowly this session. The Republican leadership has been cautious and strategic regarding when the House votes. With the 29D-31R split in the chamber, Speaker Rusty Bowers needs all 31 of his members sitting in their chairs during the final “Third Read” votes on ideological bills such as lowering the minimum wage, revenue neutral tax conformity, or attacking Clean Elections.

We have taken some interesting votes in recent weeks. You can see patterns in the votes. Green = Yes. Red = No. All of the Republicans voted for lowering the minimum wage and for all of the tax cuts/tax credits, which primarily benefit the wealthy. Thirteen also voted against accepting federal childcare subsidies — Reps. Allen, Biasiucci, Bolick, Fillmore, Finchem, Grantham, Griffin, Kern, Payne, Petersen, Roberts, Stringer and Townsend. (Let’s lower the wages of young parents and refuse them federal childcare subsidies, which cost the state nothing. What could go wrong?)

Here is just a sampling of the action.

Tax Giveaways

The biggest loser in the tax cut game is public education.

HB2357 land tax cut
HB2357 is a preemption bill and a tax break for speculative builders. Currently, cities and towns can allow speculative developers to deduct the cost of the land when they file their taxes after making a sale. The law is permissive. HB2357 mandates that all cities and towns give this tax break on every deal that meets the speculative development criteria in the bill. If cities want to use this strategy in their economic development tool box, let them, but the state shouldn’t be mandating what local government can or can’t do.
HB2359 charitable income tax cut
HB2359 is an above-the-line charitable income tax deduction for people who make large charitable contributions and who itemize their taxes. This is another Republican attempt to zero-out the state’s $150 million financial benefit from the Trump Tax Cut and Jobs Act by spending it. Revenue-neutral tax conformity eliminated all of the TCJA funds but was vetoed by Governor Doug Ducey. This charitable income tax deduction would spend all but $10 million of the $150 million. Both Republican plans benefited the wealthiest Arizonans. Ducey and the House Democrats want full tax conformity, which would allow the state to keep the full $150 million and decide how to spend it during the budget process.
HB2425 school tax credit
HB2425 broadens how existing school tax credits can be spent by schools. Currently, taxpayers can take school tax credits and designate their funds to certain schools. Under this system, schools in wealthy parts of the state naturally receive far more money in tax credits than schools where most of the children are on free or reduced lunch programs.  Currently, school tax credits can’t be spent in the class room. The funds go for extras like sports and band uniforms and other items that schools can’t afford these days. This bill expands how tax credits can be spent and includes capital expenditures other items like desks. The wealthy schools have so much money in tax credits that they can’t spend it all with the current limitations. This bill takes a system that already has huge disparities and makes it worse. The state should fund public education equitably and fully– instead of doing patchwork deals like tax credits and performance-based funding.
HB2493 tesla tax cut
HB2493 is a complicated tax cut bill that primarily benefits Tesla. The Department of Revenue and Tesla (AKA Solar City) have been in court over how leased solar panels should be taxed for many years. Initially, back in the ’00s, the Arizona Legislature said that solar panels add no value to your house. County assessors interpret this as: if you add solar panels to your house, they are not going to run out and say, “Ah ha! You owe more property tax because your house is worth more with solar panels!” Leased panels are another tax category because they are not owned by the homeowner; they are owned by the lessor corporation– most often Tesla in Arizona. A recent court case said that the Department of Revenue can’t tax leased panels as part of the electrical grid, but that left the door open for county assessors to tax them as business personal property. Tesla has been fighting business personal property tax in Arizona and other states. The big problem is: if the state of Arizona gives a business person property tax carve out for leased solar panels to Tesla, that is picking winners and losers. Other businesses who pay business personal property tax will come back to the Legislature for their business personal property tax cut. The biggest loser in the tax cut game is public education. Yes, I know the environmental groups were pushing a “yes” on this bill, but I urge everyone to look long term. HB2493 is potentially very dangerous for education.
HB2617 tax cut vote Arizona House
HB2617 is one of those tax giveaway bills with an unknown cost. This bill was assigned to Ways and Means and Appropriations but was only heard in Rules. When I talked with Rep. Mitzi Epstein about this bill before, she said emphatically that this bill should have been heard in the House Ways and Means Committee and probably wasn’t because they knew that she and I would pepper the presenters with questions. Who benefits from this tax giveaway? Look at the “For” list on Request to Speak: Arizona Public Service Company, Salt River Project, Invenergy, UNS Energy, Grand Canyon State Electric Cooperative Association, First Solar, and Arizona Municipal Power Users.

Lowering Minimum Wage

College students have high tuition, high fees, high rent, and high debt. The last thing the state should do is significantly lower their wages!

HB2523 lower minimum wage
HB2523 lowers them minimum wage from $11 to $7.25/hour for fulltime students who are under 22 and work part time. The theory behind this bill is that young people will find it easier to get jobs if they’ll just work for $3.75/hour less. If you look at the Request to Speak System for HB2523, you’ll see the Goldwater Institute and the Free Enterprise Club are the only backers. There are literally hundreds of people signed in against. In committee, the Goldwater Institute said that this bill doesn’t violate Prop 105 (the Voter Protection Act) because the minimum wage increase (Prop 206) was billed as helping “working families.” It didn’t matter how many real life examples of teens helping to support the extended family or young parents trying to go to school and raise little ones the Democrats offered. The Republicans stuck to their belief that lowering the minimum wage was a great idea for young people. College students have high tuition, high fees, high rent, and high debt. The last thing the state should do is significantly cut their wages! On the floor, I offered a Prop 105 amendment to this bill; if adopted, that would have required a 3/4 vote, since the minimum wage increase was a Citizens’ Initiative. Despite being discriminatory and unconstitutional, HB2523 passed the house on a party line vote. Contact President Fann and ask her not to hear this, contact your senators and tell them to vote NO, and contact the governor and tell him to veto this horrible bill. (Hopefully, this will be killed in the Senate.)

Federal Childcare Subsidies

This passed the house with flying colors.

HB2125 federal childcare subsidies
HB2125 is one of the bills related to accepting and appropriating the $56 million in federal childcare subsidies that Arizona left on the table a year ago during the budget talks. This passed the house with flying colors.

Term Limits

The Arizona House voted on term limits at the federal and local levels– but didn’t look at reform at the state level.

HCR2022 articla V term limits
HCR2022 Article V convention for term limits is a scary bill. You may remember the slew of Article V Convention bills that the Republicans have passed in the past two years. Article V of the Constitution is the section that talks about changing the Constitution. You can have an convention of the states in which you get together to “open up the Constitution” and tinker with it. THAT is not a good idea– especially since Republicans have passed bills that identify the Arizona delegates as members of their party. The other way to modify the Constitution is my an amendment that is ratified by 3/4 of the states. (That is the route the Equal Rights Amendment is taking.) Article V Conventions are risky business because the event could start with the intent on fixing one item– Congressional term limits, in this case– but it can veer off into anything. I agree with the term limit intent of this bill to prevent Congress members from serving for decades. You can accomplish that goal without term limits or an Article V Convention by getting money out of politics. If we had nationwide Clean Elections, that would level the playing field. People would have to win on their ideas– not on how rich their donors are.
HB2721 allowing local term limits in Arizona
HB2721 allows local residents to pass a citizens’ initiative for local term limits in Arizona. Apparently, municipalities and counties didn’t have this right before. We voted to give it to them. You’ll note that the Arizona House voted on term limits at the federal and local levels– but didn’t look at reform at the state level. We have term limits in the Legislature, but they are very flexible. Each person can serve eight years in one chamber and another eight years in the other. Technically, they are “termed out” in both chambers after that. Unfortunately, politicians can choose to recycle themselves and start the clock over again in the chamber where they started. People on both sides of the aisle do this. I think 16 years in the Legislature is plenty.

 

4 COMMENTS

  1. Wow, that’s some serious sophistry, John. Even under the logic of your deeply misleading argument, the ones who primarily benefit are the well-off; like those who want to deduct their STO contributions to pay for private school tuition, AND take the standard deduction… for example 🙂

    • WOW!!! Saying it ain’t true with a big word does not make it false. Do you really think the rich with all their medical deductions, mortgage and charitable deductions, state and local tax deductions and job travel and education expenses forgo all those tax write offs and use the Arizona standard deduction – a big $10 K for a married couple.

      Bad post Michael.

  2. You got HB2359 wrong. It does not benefit the rich. It helps non-profits and working and middle-class taxpayers. Non-profits, such as the Salvation Army, lobbied for this bill because they fear a drop in donations due to the increased amount of the federal standard deduction. With more people taking it, they fear charitable deductions will fall because they can only be taken as a tax deductionby those who itemize.
    The bill does not help the rich who usually itemize but it helps lower income people who do not. Under this bill they can both take the standard deduction and also deduct charitable donations.

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