Many Arizonans lived with food, housing and financial insecurity before the pandemic hit.
The state of Arizona is doing fine financially — thanks to sales tax revenue (collected primarily from online sales) and pandemic relief from the federal government– but the Legislature is doing little to help those in need. People at the top and people in the middle, who still have their pre-pandemic jobs, are doing OK. The people at the bottom who had low wage jobs or multiple gig economy jobs before the pandemic are the ones who are really suffering during the pandemic. Some of those prolific pre-pandemic gig jobs like rideshare drivers, hotel staff and restaurant workers have almost disappeared. Many of those jobs won’t return because of changes to our lifestyles.
Although Arizona’s economic forecasters warned of the increasing wealth gap in Arizona, these people are being ignored by the Arizona Legislature. The Republican leadership is focusing on tax cuts for the rich people and corporations — rather than focusing in COVID relief or providing food, housing and financially security to struggling Arizona families. What are they offering to the poor to lift themselves out of poverty “by their bootstraps”? Dramatically increased gambling (HB2272). What could go wrong? [Sarcasm font.]
Lucky for me my committees, so far, have not been totally nuts with radical right wing bills like some of the other committees this year. Yes, we have heard some tax giveaways in both Commerce and Ways and Means but not the extreme ideological social engineering and voter suppression bills that are in other committees.
The Feb.3 Ways and Means Committee agenda included only one bill HB2391, sponsored by Rep. Steve Kaiser, one of the freshmen Republicans. This is a property tax and county government transparency bill from ATRA (Arizona Tax Research Association). Sean McCarthy from ATRA said that all of the counties report their property taxes in different ways. (Not surprising.) HB2391 says that the Department of Revenue (DOR) should design a “worksheet” for the counties to use worksheet and make the data available. I don’t think this goes far enough. I know many Tucsonans who are digging through PDFs and memos on governmental websites to try to determine how their taxes are being spent.
I agree with the push for governmental transparency and standardization in reporting, but I would take this a couple step further. I think these worksheets should be available on the county websites and on the DOR website in an easy-to-find location, and the data should be downloadable in Excel. This allows people — including data nerds, economists, grad students, and interested citizens — to look at the data and analyze it themselves. This is true transparency and accountability, in my opinion.
Many governmental websites are data rich and information poor. There are many numbers but very little context or explanation. For example, my bill HB 2255 is a transparency and accountability bill regarding the Arizona Commerce Authority (ACA). I have done a lot of digging around in PDFs on the ACA website to determine the effectiveness of the business incentives that the ACA has been doling out.
When I had my communication and public relations business, writing and designing annual reports was my niche. In fact, most of the little plexiglass statues in my office at the capital are awards that I won for annual reports or other corporate communication documents or programs.
With this background, I am particularly critical of the ACA annual reports that are on their website. First of all, I had to search for “annual report” in order to even find the annual reports. There are lots of cute number graphics, but eventually I found a large PDF which was the actual annual report. Buried in the middle was the number of jobs that are created by the different incentive packages. There was a list of businesses that received big incentive packages (including Caterpillar and Worldview in Tucson) but no indication where these businesses are located. Are most of the business incentives spent in Maricopa County? Probably but it’s hard to tell. What is the long view of these incentives? How many of these businesses are still in business? Many of these businesses got their money years ago, but only one figure is given for job creation. Is that the current number of jobs? Is that the total number of jobs that were created over X number of years? Again you can’t tell from the annual report. Often in a corporate annual report there is historic data like a five-year review or a 10-year review to show growth or change over time. The 10 year review often includes analysis and a continued story from previous annual reports. I never found anything like that on the ACA website.
I want transparency in the corporate tax giveaways, how about you?
I am all for more governmental transparency. I think the Arizona Commerce Authority should be included in this push for more transparency and more accountability to the taxpayers of Arizona. If you are on RTS, please give both HB2391 and HB2255 a thumbs up.
[Photo: I took the above photo at a 2017 Chamber of Commerce event at the World View Enterprises headquarters. World View is one of the businesses that received money from the Arizona Commerce Authority and got a new building from Pima County. How much taxpayer money did World View get, and how many jobs did that incentive actually bring to Pima County? This is one of my many questions.]
Usually, I’m telling you about bad bills and encouraging you to give them a thumbs down on the Request to Speak (RTS) system.
Today I am featuring for good bills that passed unanimously out of the commerce committee. Yes, this happens when the bills are moderate and useful to the general public.
HB2396 outlines a procedure where dating websites can identify predators and notify other users who have been contacted by the bad actor. Dating websites are infamous for old pictures and lies about age, weight, and marital status. That sort of personal spin will remain. This bill goes after fraudsters who whew people on dating websites and extort money from them. According to Rep. Regina Cobb, the bill sponsor, Arizona is lost $8 million to this type of fraud in 2018 alone.
HB2305 allows microbrewers and craft distillers to share equipment with like businesses but maintain separate businesses. if you’ve ever been to a microbrewery, you know that the tanks and other related equipment can fill an entire room. This allows multiple microbrewers to share a large space that would contain common brewing equipment, but have separate business locations at that address and separate taxes. Distillers can share equipment with other distillers. This should help small brewers and distillers.
HB2382 allows people who live in trailer parks to have live-in caregivers who may be younger than the age restrictions for a retirement trailer parks. This puts into statute a common practice. Sometimes trailer parks have restrictions regarding how many people can live in a trailer. Retirement trailer parks have age restrictions. This bill waves these restrictions to allow somebody who needs 24/7 care to have a live in caregiver. this is a consensus bill that has been negotiated by the stakeholders. It puts us in line with federal law.
HB2697 was a bill that everyone on the committee could relate to. This bill was brought to the committee by the attorney general’s office because of the large volume of complaints about spa and gym contracts during the pandemic. Gyms make it really easy to sign up for a membership but extremely difficult to get out of the contracts, even when they are month to month. This bill leaves the reasons to get out of a contract the same but adds email and electronic communication to the ways that consumers can communicate termination of their membership to the corporate home office.
If you feel so inclined, give HB2396, HB2305, HB2382 and HB2697 a thumbs up on Request to Speak.
One thing I must note here, although these bills are all OK, three of the four are solving “problems” for people with enough money in their pockets to buy gym memberships, join an online dating service, or own a brewery or distillery. Only the mobile home caregiver bill recognizes the state of many people in our state.
This post was originally published on Facebook on February 3, 2021.
On Monday, Feb. 1, 2021, in the committee of the whole, also known as COW, we debated HB 2113. This bill allows people to reduce their taxable income through charitable donations because it indexes the percent allowable to inflation. The current allowable amount is 25% of charitable donations (if you itemize your deductions, which almost no one does since the standard deduction was doubled.) At the current 25% rate, this tax cut, passed in 2019, took $24 million out of the general fund. This bill allows automatic annual inflation-based increases, with no sunset date, no cap, little accountability and “no guard rails”, as Rep. Mitzi Epstein pointed out in debate.
HB2113 is an income tax break for the richest Arizonans. You’ll remember that the Trump Tax Cuts and Jobs Act eliminated many income tax deductions including the charitable deduction and at the same time doubled the standard deduction. This simplification of the tax code is something people have been clamoring for for years. Doubling the standard deduction is the primary reason why most Americans no longer itemize their taxes. To fund business tax cuts in TCJA, many individual tax deductions were eliminated and folded into the standard deduction.
In TCJA, the charitable tax deduction moratorium lasts for only five years. Epstein and I tried to add a sunset date to the Arizona charitable tax credit deduction to align it with the TCJA, but that amendment was defeated. With the 2019 bill and this 2021 bill, Arizona Republicans are not only cementing the charitable tax deduction for the wealthy, they are making it ever increasing by indexing it to inflation and not allowing it to ever decrease, regardless of the economy. That is a Sweetheart Deal!
We ended the third week of the Legislature today and finally voted on some bills on the floor of the House. Since everyone was not there, we didn’t vote on anything controversial. Consequently, there were only a handful of vote explanations.
Although I didn’t say much, I ended up saying more than many people today. I introduced the LD9 doctor of the day.
I took a tip from our Coms guy and explained my vote on HB2109 with one word … “Bingo!”
Some of the new members were wondering about my “no” on HB2122, so I explained my vote on that also. HB2122 allows municipalities to move financial advising fees for bond issues out of the bond budget and allows those fees to be paid from another unspecified source. In my opinion, this is a transparency issue. I know many constituents who are looking at budgets and data on governmental websites in order to determine how local, county, state and federal governments are spending our tax dollars. If they look at the budget for a multi year bond issues, they expect to see the total cost. They shouldn’t have to dig around in layers of PDFs on a governmental website to find out the total cost. The cost of government should be transparent and readily available to the people.
The Commerce Committee had a rousing debate over HB 2161 this week. It allows municipalities and counties to create multiple quasi-governmental taxing authorities (called marketing authorities) across the state.
The concept behind 2161 is that local governments can designate a specific geographic area to be within the marketing authority with the consent from 67% of the lodging establishments within the boundaries. Hotels and other lodging establishments inside the marketing authority would agree to add a bed tax (or in some cases an additional bed tax) to the per night room rate. Proceeds from the new tax from the multiple marketing authorities across the state would be sent to the Department of Revenue, who would process the new tax funds, and, in turn, return the bed tax money to the local governments who would funnel the money to the Board of Directors for the marketing authority and the local tourism bureau to be used for advertising the area. I am against this bill for multiple reasons:
I don’t think the state should abdicate taxing authority to quasi-governmental authorities because they are not accountable to the taxpayers.
This is a tax on consumers, but consumers will get no direct benefit (unless they want a housekeeping or wait staff job in the future).
This bill creates more bureaucracy locally and at the state level. Proponents say this won’t cost the state any money. I disagree. It will enable creation of an unknown number of new taxing districts with different tax rates which all send funds to DOR for processing. DOR funnels the money back to local governments and to the local tourism bureaus to be used for advertising. That process is not free. It will obviously require significant personal time, new procedures, database augmentation for the new taxes, and more.
During the pandemic, there have been multiple news stories about states (like Arizona) and countries (like Italy and Spain) that have lost significant revenue during the pandemic because they have historically relied upon tourism and fees levied on tourists as primary sources of income. The travel and tourism industry — along with conventions and air travel — have been hard hit by COVID. Conventions, concerts, music festivals and other big events have been canceled. Besides canceled events, people aren’t traveling for multiple reasons: they are sick; a family member or friend is sick or has died of COVID; they’re afraid they or family members will become sick or die; they’re afraid to be in enclosed, non-social-distancing spaces, including airplanes, trains or abuses; they’re afraid to spend the night in a motel room or go in public restroom; they don’t trust the government to keep them safe (obviously a good reason with 400,000+ dead); or they are at high risk for COVID and don’t go anywhere.
Also … let’s not forget the biggest reasons why tourists and conventioneers might choose to go elsewhere. Arizona has a habit of creating negative press for itself. For example:
Arizona has bungled the pandemic. Arizona has been a COVID hot spot for weeks and has been intermittently worst in the nation multiple times in the past year.
Since the Jan. 6 US Capitol Insurrection, Arizona is also known as the home of the infamous organic-food-loving Q Shaman and multiple insurrectionist elected officials.
The Arizona Legislature continues to waste time on inappropriate and radical legislation such as Rep. Walt Blackman’s “homicide by abortion” bill (HB2650) and Rep. Shawnna Bolick’s HB2720 which creates layers of unnecessary bureaucracy, has voter privacy concerns, and hands the presidential election decision to the Arizona Legislature. (What could go wrong?)
Jon Stewart of the Daily Show dubbed Arizona is the “Meth Lab of Democracy”. This references the founding fathers’ idea that the states would be “laboratories for a democracy” and would test new ideas. If enough states adopted those novel ideas, the federal government would adopt them for all states. As the Meth Lab of Democracy, Arizona is known for our racist, sexist, homophobic, anti-science laws.
Not a good look.
All of the slick ads about cowboys, sunsets, warm weather, and the Grand Canyon will not overcome our bad reputation. The goal of the marketing authorities is to bolster the tourism industry and subsequently the state’s economy. Arizona has a lot of self-inflicted marketing wounds that we have to overcome before people are going to come here post Covid.
The tourism industry needs to rethink itself for the post Covid world. Travel, tourism, conventions and air travel will not be the same as they were before. The sooner we realize that and start innovating and planning for it, the better off we will be. We should cast aside the old paradigms.
If you are on RTS, vote “no” on HB2161, HB2650, and HB2720. Let’s focus on helping Arizona’s survive the pandemic physically and financially. That should be our first priority in the legislature.
[Photo: Arizona House members stand to watch a country music tourism video of cowboys, sunsets and the Grand Canyon.]
