Early in the morning of Tuesday, May 28, the Arizona Legislature officially wrapped up its work, capping an extraordinary 135 days of legislating that produced some of the biggest policies in recent years. Most notably was the passage of the Drought Contingency Plan, completed against a deadline imposed by the Bureau of Reclamation. The agreement created a new “Tier Zero” for drought planning of Colorado River water resources, allowing greater savings in Lake Mead for the future. Legislators passed legislation to address tax conformity along with tax cuts (combined $320 million savings for Arizona taxpayers), increased the state’s rainy-day fund to $1 billion, provided funding for school counselors, followed through on the next 5 percent of a promised 20 percent pay hike for teachers and finally, implemented license reciprocity. As a result of the adjournment sine die on May 28, the general effective date for new laws will be August 27.
The 2019 session ended shortly after a majority approved an $11.8 billion spending plan for FY20, a staggering $1.4 billion—a 13.5 percent increase—above what they adopted for FY19. Within the final budget, the Tucson Metro Chamber had numerous budget priorities receive funding:
$15 million for an expansion of Pima Community College’s aviation center, which will substantially increase highly qualified workers for the aerospace sector
$10 million for Career and Technical Education programs, providing qualified workers for a multitude of industries the day students graduate from secondary school
Funding to cover the offset created by fixing issues with the Rule B property assessment process, saving property owners millions in tax increases
As mentioned above, fulfillment of the second year of 20 percent by 2020 salary increase for Arizona’s teachers
Implementation of online sales taxes because of the Wayfair decision, bringing parity for sales tax collections for brick and mortar businesses
Funding for the required state portion of KidsCare, ensuring the children of Arizona most in need have medical care.
Going into the 2019 legislative session the Chamber’s Top 3 policy issues were:
1. Expansion of the Regional Transportation Authority language in state statue;
2. Addressing what is known as “Rule B” in property tax assessments; and,
3. Pursuing legislation clearly enabling Association Health Plans in Arizona.
I’m proud to report we accomplished all three, and in astonishing fashion. HB2109 increased the ability of our Regional Transportation Authority to levy up to a 1-cent sales tax when it goes for renewal in a few years. This is not a guarantee that we will go to 1-cent in our region, but it allows us to consider the option as we work to develop the next 20-year plan that will go to the voters. Options in policy are good to have, and we thought this was an important tool for our regional toolbox.
In late 2018, the Chamber was approached by a variety of business owners who had a substantial increase of their assessed property value. SB1248 is legislation written by the Chamber and sponsored by a Southern Arizona Legislator (Sen. Vince Leach) to address what is now known to be a statewide problem with Rule B property assessments. This piece of legislation placed what was a basic guideline into state statute, providing protection to property owners when they have made improvements to property. The second part of the bill raised the exemption amount from 10 percent to 15 percent—a staggering 50 percent increase in the trigger point for Rule B application. This will save property owners throughout Arizona millions in unexpected property tax increases.
Finally, SB 1085 provides the policy clarification for Association Health Plans in Arizona. This was particularly important to the Chamber, since we worked with 14 other Chambers of Commerce throughout Southern Arizona to offer an Association Health Plan for small businesses with two to 50 employees. We have seen moderate success, despite the federal rules under review. The passage of SB1085 provides a clear framework for us continuing to offer a needed benefit for small businesses when the time comes.
For a full perspective at how your Legislator did during the legislative session, please view our 2019 Legislative scorecard at tucsonchamber.org.
Robert Medler is vice president of the Tucson Metro Chamber.