The conclusion to this year’s legislative session was eventful to say the least. It was unlike anything I and many others who closely follow the Arizona Legislature, had ever seen before. Gov. Jan Brewer’s political maneuvers that led to the passage of an $8.8 billion state budget, including the expansion of Medicaid, with a powerless majority leadership witnessing it unfold in the wee hours of the night, were no doubt outside the status quo of how a state budget is passed.
The idea of suspending the rules, bringing a budget straight to the floor and members refusing to answer questions about it was astonishing.
Meanwhile, no written rules were broken as the governor and her coalition of lawmakers were using the powers the state constitution provides. The debate has now begun on how such unprecedented tactics will impact the political process, for better or worse.
The dust settles quickly at the state capitol after sine die, when lawmakers and all of us lobbyists go home. It’s a time when we tally up the wins and losses and take inventory of the political capital we have left in the bank.
I’m pleased to report that Arizona businesses have much to celebrate this year as major victories were achieved. I’d like to share with you some important wins that will make Arizona more business friendly.
• Transaction Privilege Tax (TPT) reform. Arizona’s sales tax system was among the worst in the country prior to this legislation. Despite strong opposition from Arizona cities and towns, which were relentless in opposing any change to the status quo, a compromise was finally reached. The passage of the reform bill (HB 2111) and Gov. Brewer’s signing it into law, will significantly improve the state’s sales tax system by providing a much-needed overhaul. This was, hands down, the biggest win for Arizona businesses, and one that will benefit Arizona’s business climate for years to come.
• Medicaid expansion. This proved to be the divisive issue that unfortunately fractured the Republican majority caucus, which has been very supportive of our pro-business agenda this year and in past years. Expansion of the Arizona Health Care Cost Containment System (AHCCCS) to cover childless up to 133 percent of the federal poverty level, is a win for businesses given our dependence on a healthy workforce. Keep in mind that many people entering the workforce following the Great Recession are young people. This expansion will also help ensure that Arizona complies with the 2000 voter mandates of Proposition 204.
• Unemployment insurance. A measure (HB 2147) was passed providing much needed relief to Arizona employers when it comes to unemployment benefits by shifting the burden of proof onto applicants who quit their jobs but claim they were fired. It’s now up to applicants of Unemployment Insurance, rather than the former employer, to demonstrate they left their job involuntarily.
• Gift card taxes. The Legislature agreed that paying taxes on gift cards is a bad idea. As businesses large and small continue to increase the use of gift cards, vouchers and other cash equivalents to increase sales, they will continue to be sold at face value under this new law (HB 2336) that exempts gift cards from sales taxes at the point of sale.
• Education funding. Finally, for the first time since 2008, public schools will be the recipients of $82 million in money to cover inflationary costs and another $3.6 million intended for school safety. The bill (HB 2425) that was passed ends Arizona’s Instrument to Measure Standards (AIMS) testing and introduces performance-based funding for K-12 education.
In addition to these five big issues, wins also came in the areas of reforming the process of class-action lawsuits and election campaign financing, among others.
As a statewide organization, the Arizona Small Business Association (ASBA) tends to look at business issues from 30,000 feet. Some with more specific issues might not agree, but ASBA strongly believes business in general scored some big wins during this legislative session. These wins are steps in the right direction to making Arizona more business friendly and more attractive for our economic development efforts.
Jerry Bustamante 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.