Water, taxes top crucial issues for Legislature
2019 session opens Monday
PHOENIX — Gov. Doug Ducey and state lawmakers begin the new legislative session with a deadline to act — and soon — on two issues crucial to Arizona residents.
The more pressing one is to get sufficient votes for a drought contingency plan crafted by various interests to deal with the problem of declining water supplies coming out of the Colorado River.
Most significant in the deal is a requirement for Arizona to leave some of the water to which it would otherwise be entitled inside Lake Mead. That is designed to keep lake levels from dipping below a certain point when Arizona would otherwise lose its allocation.
To do that, however, means someone who normally gets Colorado River water will not.
Some of that would be made up with purchases of water rights from tribes. Ducey has committed to putting up $35 million. And there also are plans — though not yet fully funded — to allow Pinal County farmers to replace some of what they will not get from the Central Arizona Project with groundwater from new wells.
But there is not yet actual legislation for lawmakers to consider. And there already has been some balking among various interests who question their cuts, as well as issues raised about whether cities should be able to take — and bank — water they do not need.
There also are questions about whether other sources of water should be considered in determining needs and allocations.
What makes the issue time sensitive is that Brenda Burman, commissioner of the Bureau of Reclamation, has given all the affected states to come up with and ratify an acceptable plan by Jan. 31 or she will begin the process of having one imposed by the federal government.
One complicating factor, though, has been the partial federal shutdown, meaning certain federal officials are unavailable to answer questions about what might or might not be acceptable.
The other pressing issue doesn’t have an Jan. 31 deadline. But it is something lawmakers and the governor need to resolve soon so Arizonans can start preparing their state income taxes.
In late 2017 President Trump signed a law to reduce federal income taxes rates for individuals as well as a boost in the standard deduction. But it also eliminated or curtailed various itemized deductions and subtractions that lower the taxable income and, by extension, the amount owed.
This is significant because Arizona is a “piggy-back’’ state, using the federally adjusted gross income figure as the starting point for preparing state returns. Arizona’s deductions generally mirror what’s allowed under federal law to make tax preparation simple.
Ducey wants Arizona to alter its tax code to “conform’’ to the federal changes. But disallowing those state deductions would increase what Arizonans owe the state this year — the returns due April 15 — by at least $170 million.
That is proving unpopular with many lawmakers, led by J.D. Mesnard. The current House Speaker and soon-to-be chairman of the Senate Finance Committee, said there is little sentiment for the federal tax cut to become a windfall for Arizona.
Ducey wants to put those extra tax collections from Arizonans into the state’s “rainy-day fund,” a special account for lawmakers to tap when revenue collections fall below projections.
But time is on the side of Mesnard and other foes of Ducey’s plan: If they do not approve it, the current Arizona deductions remain, despite the change in federal law, a move that means no net increase in state taxes but some additional calculations by Arizonans when they file.
Much of what else is on the legislative agenda this year has no hard deadlines — at least not yet.
Education is again expected to take center stage at the Capitol.
Last year lawmakers approved Gov. Doug Ducey’s plan designed to boost average teacher pay by 20 percent by 2020 over 2016 levels.
But that law did not provide additional dollars specifically for salary hikes for non-teaching staff. And questions — and a lawsuit — remain about whether the state is meeting its legal obligations to provide full funding not only for classroom activities but also the capital needs ranging from building construction to repairs.
Lawmakers did agree last year to renew the current 0.6-cent sales tax for education beyond its current 2020 expiration date. But the approval by voters earlier this year of a ban on sales taxes on services on any new taxes — and the renewal is, in fact, a new tax — opens the question of whether some things now taxed, like restaurant service, will be exempt, cutting into the revenues.
Sen. Sylvia Allen, R-Snowflake, who chairs the Senate Education Committee, is looking at a new ballot measure that would not just clarify that issue but add another 0.4 cents, boosting funding for education by an additional $400 million a year.
There also is some sentiment to revisit the plan to hike income taxes on the top 1 percent of wage earners. A plan to do that was knocked off last year’s ballot after the Arizona Supreme Court said the legally required description did not fully inform petition signers of the full effect of the change.
The 2018 teacher strike, the one that pressured Ducey into coming up with his pay plan, continues to generate fallout among those angry with educators who walked out.
One bill by Rep. Kelly Townsend, R-Mesa, would require the attorney general to investigate and punish teachers who violate the laws on political activities. Townsend also wants to make it illegal for school administrators to close a school in the event of a strike, regardless of whether they believe there will be sufficient staff on hand.
And Rep. Mark Finchem, R-Oro Valley, wants the state Board of Education to craft a code of ethics for teachers prohibiting them from not just endorsing candidates or commenting on legislation to introducing controversial issues that are not germane to the course or topic being studied.
There also is some pressure on lawmakers to revisit the statutes that allow for-profit entities to operate charter schools amid questions of whether there needs to be better financial and academic oversight for these operations that are technically public schools which get state aid.
It also remains to be seen whether supporters of vouchers of state tax dollars to allow students to attend private and parochial schools will be back this session with a new plan following the defeat at the ballot in November of a proposal to remove restrictions on who is eligible.
SAFETY & CRIME
A closely related issue deals with school safety and crime in general.
Ducey attempted to get lawmakers to approve a comprehensive plan last year he said would prevent mass shootings, with the keystone being a proposal to let judges take guns from some people considered “dangerous.”
That plan, dubbed Severe Threat Order of Protection, would set up procedures to allow not just police but family members and others to seek a court order to have law enforcement take an individual’s weapons while he or she is locked up for up to 21 days for a mental evaluation. Ducey contends that kind of law could have prevented some of the mass shootings that have occurred elsewhere.
But lawmakers watered down the plan before finally killing it outright, with objections not just to taking away weapons but locking up people against their will for a psychological evaluation.
Ducey is expected to make another run at the issue. But there also is sentiment among some lawmakers to go in the opposite direction, following the lead of Florida where legislators voted to allow school boards to let teachers with proper training be armed.
Lawmakers also are expected to take up the question of why Arizona has more than 40,000 people in state prisons.
Some legislators say this is a result of mandatory sentencing laws which took discretion away from judges, particularly for multiple offenders. But there also is some concern that some of the crimes that are now listed as felonies could as easily be classified as misdemeanors, reducing sentences and improving the odds of probation.
Any move in that direction would generate pushback from prosecutors who generally have argued that everyone who is in prison belongs there.
Finally there is the question of whether the recreational use of marijuana should remain a crime.
Voters did approve allowing medical marijuana patients to buy and use the drug, with some 184,000 now having state-issued ID cards. But a 2016 initiative to allow anyone to use the drug came up short.
One thing that could pressure legislative action is a possible marijuana legalization measure on the 2020 ballot. If approved by voters, lawmakers would be powerless to alter it; a legislative solution, however, could be amended as needed.
Under the category of health, abortion legislation is a perennial at the Capitol.
Unless and until the historic 1973 Roe v. Wade decision is overturned, Arizona lawmakers are powerless to outlaw the procedure. But foes of abortion have had success in prior years imposing new restrictions and hurdles on the practice, ranging from waiting periods and new reports to questions that women have to be asked before they can terminate a pregnancy.
Several states already are pushing the legal boundaries, including some that are trying to make the practice illegal at 20 weeks — weeks before the point of viability under current medical practice. In fact Arizona lawmakers approved such a ban in 2012, only to have it struck down.
But abortion foes are hoping for different legal results, particularly with a pair of Trump appointees to the U.S. Supreme Court.
• Lawmakers are expected to debate whether the state is ready to ban texting while driving by all motorists.
Current law applies only to teens with a learner’s permit or in the first six months of being able to drive. But a recent fatal accident where a texting motorist killed a police officer on the Salt River Pima-Maricopa Indian Reservation may provide some push.
• Also on the health front, lawmakers hope to find new ways to crack down on access to “vaping’’ devices by teens.
• Revamping deals with tribes over their exclusive right to operate casinos in exchange for giving the state a share of the profits. That also can get into the question of whether the Arizona Lottery state can operate keno games where numbers are chosen multiple times an hour, a practice that may run afoul of those gaming compacts.
• Rescinding or adjusting a $32-a-vehicle registration fee approved last year to fund the Highway Patrol, freeing up more than $180 million of tax dollars for other priorities. Some lawmakers who voted for the plan said the amount, which was not set in statute, ended up being far more than they were promised. Ducey is opposed to its repeal.
• Addressing whether Arizona should tax sales by out-of-state online retailers. A related issue is determining if some products delivered online, like software, should also be subject to state and local sales taxes.
• Enhancing the penalties for animal cruelty. Prior efforts have run into opposition from ranchers who say it could affect how they deal with the own animals.
• Debating whether to remove a “legislative immunity’’ provision from the Arizona Constitution. While the language does not technically immunize lawmakers for their acts, one lawmaker cited it as an excuse for driving more than 100 mph while another, stopped for drunk driving, gave police his legislative ID card instead of his driver’s license.
• Giving pay raises to state employees who, unlike teachers, have not gotten an across-the-board increase in years. That has led to some bad feelings particularly after the Ducey administration gave big pay hikes to some working directly for the governor.
• Moving the state’s primary from late August until May. That move would give more time for the intraparty wounds of a contested race to heal ahead of the November general election.
• Renewing efforts to have candidates for U.S. Senate selected by parties instead of through popular election. Similar legislation has failed in the past.
• Increasing to $10,000 the amount of money veterans can exempt from state income taxes. The current figure for 2019 is $3,500.