On February 23, 2023, Governor Katie Hobbs vetoed a MAGA Republican-approved bill that would have given tax relief mostly to landlords to the detriment of local governments, with no state budget in place for next year, and without ensuring any relief for renters.

In a letter explaining her veto, the Governor relayed:

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“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. For working families faced with ever-increasing rental prices, this proposal just doesn’t fit the bill.”

“Second, the bill includes an appropriation of roughly $270 million over the next 18 months. To approve such an appropriation outside of a comprehensive budget agreement would be irresponsible. If the majority caucus is committed to such an appropriation, I expect it will be brought to bipartisan budget negotiations for consideration.”

The Governor also announced her veto on social media:

In her press release, Governor Hobbs also cited two advocates for local government’s support for vetoing the bill:

“John Lewis, President and CEO of PHX East Valley Partnership Board, said of the bill, “We respectfully urge you to veto SB 1184, as it will not provide meaningful relief to renters. Instead, it will force local governments to weigh increasing other local taxes or reducing services – putting the vitality of our burgeoning region at risk.”

Douglas Nicholls, League of Cities and Towns President and Yuma Mayor said, “We urge you to veto SB 1184, the proposed residential rental tax preemption. The presumed intent is to help Arizonans struggling with inflation and the substantial increases in rent seen statewide. However, this bill does not provide meaningful relief, will likely harm those it’s purported to help, and will likely only accomplish providing a tax break for landlords.”

More praise for the Governor’s veto can be found on social media. These include:

 

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