Certainty is good. Fortunately, we enter Arizona’s 2013 Legislative session with answers to a number of critical questions that we had at this time a year ago. Will Arizona have a state-run healthcare exchange if the Affordable Care Act is not repealed? Will our state’s economy continue to improve? Will the balance of power in our Legislature remain far to the right or will it shift more to the center?
We now have the answers to those questions and with them have a better idea of what confronts us and what we have to work with.
Kindergarten-through-12th grade, state-run universities and community colleges have all felt the the effects of the economic downturn with significant cuts in recent years. Proposition 204 on the November 2012 ballot was intended to solve the funding woes and provide a dedicated and permanent source of revenue to fund education in our state. But the proposition’s failure brings education funding back to the drawing board.
Most will agree the Legislature must find a way to increase funding for education, so expect this to be among the top issues this year. Also, expect to see education funding related bills introduced and promoted as workforce and economic development related.
Healthcare in Arizona
Access to and the cost of quality healthcare in the state is an increasing expense that impacts the bottom line of Arizona businesses. Prospective businesses can also measure in real dollars how Arizona stacks up against other states when determining the cost of doing business.
Healthcare in Arizona was already a big and complex issue prior to the passage of the Affordable Care Act, or Obamacare. Now Arizonans must also get ready to navigating through a new health exchange that will be run by the federal government. Expect to see efforts to block a federally run exchange by advocates for local control.
Simplification of Arizona’s complicated tax system will continue to be a top issue as momentum has increased after two years of significant progress. Recent tax reforms have reduced the burden on capital gains tax, corporate income tax and the assessment of business equipment and property. A significant burden that remains concerns the the administrative hassles facing Arizona businesses to comply with the state’s complex tax system.
Compliance represents a real cost to Arizona businesses and, along with the state’s current tax rates, it’s a major factor in our ability to be competitive in attracting new businesses to Arizona and encouraging existing businesses to stay and expand. Expect the Legislature to begin to adopt recommendations recently proposed by Gov. Jan Brewer’s Transaction Privilege Tax Simplification Task Force.
With a temporary 1-cent sales tax scheduled to end on June 1, expect the state budget to once again be an issue widely discussed and debated. Since the state expects an increase in revenues of more than 5 percent this year, state-run programs that were cut or reduced significantly will resurface and be promoted as priorities.
The relentless pressure to expand Arizona’s tax base by taxing services will continue and vigilance by those who oppose it will remain as strong as ever.
While Republicans’ control of the Legislature remains after last year’s elections, the margins are slimmer as Democrats picked up seats. Overall, expect the Legislature to shift a bit to the center with lawmakers becoming more cooperative across party lines in order to get things done.
Written by Jerry Bustamante. Jerry is senior vice president of public policy and oversees the Southern Arizona office of the Arizona Small Business Association, 4811 E. Grant Road, Suite 262, in Crossroads Festival, (520) 327-0222.
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