By: Courtney LeVinus with Capitol Consulting
The 2011 Legislative Session is finally upon us and will officially commence January 9, 2011. By now, everyone is familiar with the general makeup at the Capitol. The Republicans gained significant power by achieving supermajority in both the House and Senate. This, combined with Republican Governor Jan Brewer, could spell significant changes for the coming years.
Representative Kirk Adams (R-Mesa) retains his role as House Speaker and Senator Russell Pearce (R-Mesa) takes over as the new Senate President. Other key leadership positions in the Senate include: Senate Majority Leader Scott Bundgaard (R- Phoenix), Senate Majority Whip Steve Pierce (R- Prescott), Senate Minority Leader David Schapira (D-Tempe), Assistant Senate Minority Leader Leah Landrum Taylor (D-Phoenix) and Senate Minority Whip Paula Aboud (D-Tucson). On the House side, leadership includes: House Majority Leader Andy Tobin (R-Paulden), House Majority Whip Debbie Lesko (R- Glendale), House Minority Leader Chad Campbell (D-Phoenix), Assistant House Minority Leader Steve Farley (D-Tucson) and Minority Whip Matt Heinz (D-Tucson).
So what can we expect this year at the Capitol?
For starters it’s safe to say that it will be another difficult budget year. The Joint Legislative Budget Committee (JLBC) has indicated that the State may be facing a $1 billion budget shortfall for 2011. Sales tax revenues did not reach their expected revenue projections, even with the 1-cent sales tax increase passed last year through Prop. 100. Also the propositions to sweep the Early Childhood Development and Land Conservation funds totaling $469 million were not approved by the voters in the November General Election, creating a greater shortfall.
Though the State has seen some indications of stabilization, we are still dealing with a high unemployment rate (9.5%), low consumer spending and a stubborn real estate market.
Last year the legislature was able to pass the 2011 Budget only after making significant cuts ($1.1 billion) to core services, most notably healthcare. The passage of Prop. 100 saved more severe cuts to education, but unfortunately that may have only delayed the inevitable. This year we should expect more cuts to healthcare, public safety and education.
Arizona’s tax structure may also see some changes in 2011. Republicans and democrats alike stress the need to attract new businesses to Arizona in order to create much needed jobs. Compared to other states around the country, Arizona maintains a low income tax rate and low homeowner property taxes, but levies high business property taxes. Many argue that there is a strong correlation between Arizona’s high unemployment rate and low supply of high quality jobs and the state’s high business property tax assessment ratio.
Proponents of job creation legislation in both parties agree that reforming Arizona’s tax structure to create a more business-friendly environment is critical. Major tax reform is no easy task. To move forward with reform, both parties will have to figure out how to: 1) reform the tax structure without jeopardizing funding for education, healthcare and other core services and 2) fairly balance the tax burden between the individual and the corporation.
Other tax reforms could include expanding the tax base to the service industries or moving to a more conservative leaning flat tax, fixed-rate system. Both options will likely be considered if the state revenue projections don’t significantly improve in 2011.
Finally, immigration will likely resurface again this year. The infamous SB1070 bill signed into law last year still awaits a decision in the 9th Circuit Court of Appeals; however, it’s probably safe to assume that the bill is headed to the US Supreme Court. That being said, expect more immigration enforcement packages aimed at curbing illegal immigration in Arizona.
As we head into 2011 and the 50th Legislative Session, remember that you absolutely do have a voice in your government. If your elected official is not representing you well, call or write a letter. At the end of the day it is your money that they are spending. As Mark Twain once said, “no man’s life, liberty, or property is safe while the legislature is in session.”