Arizona Legislature: Proposal to slash Proposition 208 revenue goes to Ducey

The Arizona House and Senate are in what they hope is the final week of their legislative session as they work to reconcile two budget-related bills and finalize a number of remaining bills. Reporters Andrew Oxford and Mary Jo Pitzl cover what happens hour by hour at the state Capitol.

Read recent coverage here:

Friday, June 25, at the Legislature | Thursday, June 24, at the Legislature

3:15 p.m.: Cut to Proposition 208 OK'd

One of the more passion-inducing bills of the session, the Arizona Senate passed Senate Bill 1783 on a party-line vote with Republican support and Democratic opposition.

It creates a new income-tax category for small businesses, and sets the rate at 4.5%, effective on income earned this year. It then drops the rate by a half percentage point a year until it hits 2.5% in 2025.

The new category is exempt from the provisions of Proposition 208, an education-funding measure approved by voters last fall. The ballot measure levies a 3.5% surcharge on any Arizona taxable income of $250,000 or above. 

The measure's passage raised Arizona's top tax rate to 8%, bringing protests from Proposition 208 opponents, who said voters were told the measure would not tax businesses. 

Sen. J.D. Mesnard, R-Chandler, crafted the bill to blunt the impact of the measure — and, he said, to hold the boosters to their word.

"This just holds them to account," Mesnard said. “It makes that promise come true."

Legislative analysts estimate the new tax category will cut the revenue Proposition 208 raises by up to $378 million a year, or more than a third of its projected take.

Democrats decried the legislation as a scheme to do an end run around the intent of the voters to increase education funding.

“I question if this is even constitutional," said Sen. Kristen Engel, D-Tucson. "We wouldn’t even need Proposition 208 if the Legislature properly funded schools.”

With the Senate vote, the measure now moves to Ducey's desk for his consideration.

— Mary Jo Pitzl

3 p.m.: Changes to election laws fail

The state Senate blocked two bills to change the state’s election laws as the Republican sponsors of the legislation sparred Tuesday.

Senate Bill 1083 would have changed the thresholds for recounting election results. Current law only calls for recounts in legislative races, for example, if the candidates finish within 50 votes of one another.

Sen. Michelle Ugenti-Rita, R-Scottsdale, proposed requiring recounts when candidates finish within one-half of 1% of the total votes cast.

Senate Bill 1241 would have made a series of changes to state election laws, like requiring that counties provide receipts to voters who cast their ballots at polling places where the ballots are counted on site, such as in Maricopa County.

Some county governments and Democratic lawmakers raised concerns about the potential costs of these measures. Changing the requirements for recounts would lead to more recounts, they argued, and receipts would require different equipment.

Ugenti-Rita opposed the latter bill, arguing it included worthwhile measures but that others needed refinement.

“I do think we need to take a more thoughtful and deliberative approach to election law,” Ugenti-Rita said.

That bill’s sponsor, Sen. Kelly Townsend, R-Mesa, argued Ugenti-Rita had wrongly held back many of the ideas in the bill as chair of the Senate Government Committee.

Townsend, in turn, voted against Ugenti-Rita’s bill.

Both were doomed.

2 p.m.: Senate says 'yes' to higher pay

On a 20-10 vote, the Senate approved House Bill 2053, more than doubling the daily stipend of lawmakers from outside Maricopa County.

If it were law today, it would pay lawmakers a daily stipend of $151, which is calculated by averaging the highest six months of per diem as determined by the federal government's General Services Administration. The current rate is $60 a day.

The bill passed with no comment, and with the support of the eight lawmakers who would benefit from the hike. Maricopa County lawmakers are not entitled to the stipend increase as they live within reasonable daily driving distance from the Capitol. Their rate is $35 a day.

The bill still needs approval from the House. It cuts the per diem in half after the Legislature hits its 120th day of the session. 

If the bill passes the House and is signed into law by Gov. Doug Ducey, it would take effect immediately, as it won enough votes to trigger the emergency clause.

— Mary Jo Pitzl

12 p.m.: Marijuana testing on agenda

The first conference committee of the sine die wind down will meet Wednesday to iron out differences in legislation regulating the testing procedures used for medical and recreational marijuana.

Conference committees are held when the House and Senate versions of the same bill don't match. Three members from each chamber (in this case, two Republicans and one Democrat) work out a compromise.

In the case of House Bill 2605, the goal is to beef up the marijuana testing program, said Rep. Randy Friese, D-Phoenix and the sponsor of the bill. 

"The testing program in Arizona is not as robust as it should be," Friese said.

He and Sen. Nancy Barto, R-Phoenix, worked on the bill as it was revived after Gov. Doug Ducey vetoed it in an effort to push the Legislature to send him a state budget.

Among other things, the conferees will work to define which contaminants the medical marijuana dispensaries must test for, and add a prohibition on a dispensary owning a testing lab, and vice versa.

Once they reach agreement, the bill will require a supermajority vote of the Legislature, as it seeks to amend the marijuana statutes, which are voter protected.

— Mary Jo Pitzl, 

9 a.m.: Senate vote would raise some lawmakers' pay

As the Legislature enters its 170th day in session, the state Senate is scheduled to vote on whether to raise the daily stipend for lawmakers from outside Maricopa County. 

House Bill 2053 proposes to replace the current $60 per day rate, which has been in place for decades, with the U.S. General Services Administration's rate for federal employees who travel to Phoenix. The rate varies monthly to reflect the higher costs during tourist season; the Arizona legislation would set the rate based on the six highest months in the federal schedule, which currently works out to $151 a day.

The bill further would cut the rate in half once the legislative session extends beyond 120 days.

Lawmakers have tried for years to raise their per-diem pay. This year's attempt is close to the finish line because it excludes Maricopa County lawmakers, who don't need payment to cover lodging and meals since they can go to their homes every night. But it's a different story for a lawmaker from Yuma or the Navajo Nation.

If the bill passes the Senate (where six of the 30 senators are from outside Maricopa County), it would need to return to the House to see if lawmakers there agree with the bill's latest version. 

— Mary Jo Pitzl

MONDAY

5 p.m.: Prison reform advances

Legislation that would expand the early-release credit program for Arizona inmates won House approval Monday on a 50-8 vote.

The legislation is intended to reduce the likelihood of inmates returning to prison after release by giving them better access to programs while behind bars, said Rep. Walt Blackman, R-Snowflake. And, he added, it would put Arizona in line with 47 other states that have adopted criminal-justice reforms.

“We are an outlier when we talk criminal justice reform," he said.

Blackman successfully introduced an amendment to Senate Bill 1064 that would expand programming to inmates interested in the early-release program and would remove a requirement that an inmate pass a psycho-education program to be eligible for the program.

The bill would allow inmates to accrue early-release credits at the rate of one for every six days served; and for certain drug offenses, one credit for every five days served.

It also requires than an inmate enroll in a literacy program before entering the early-release program, rather than having to first complete the literacy program. The goal is to get inmates reading and writing at an eighth-grade level before release, or, if that doesn't happen, as a condition of their probation.

“Mandatory sentences to do nothing to rehabilitate that inmate, which is going to cost Arizona taxpayers more money," Blackman said as lawmakers debated the changes.

He estimated the program could save up to $680 million in a year in recidivism costs, money that he said could go back into programs such as literacy instruction, drug counseling and other services to help a person be successful upon release.

The underlying bill already passed the Senate, but Monday's changes will require the Senate to take a new look at it.

— Mary Jo Pitzl

3:30 p.m.: Vetoed bills revived 

Maybe the second time is the charm.

The Arizona House of Representatives on Monday finished passing 22 bills that Gov. Doug Ducey vetoed last month as he sought to prod the Legislature toward approving a budget.

Overriding the governor’s vetoes would have required two-thirds supermajorities in both chambers, which would have doomed some of the bills that had passed only along party lines.

Instead of attempting to override the governor’s vetoes, senators filed the bills as new legislation and the Senate suspended its rules to vote on each one Thursday.

While the governor did not delve into the specifics of the bills, some were controversial.

One measure, now labeled Senate Bill 1840, bars state spending on any form of cultural or racial sensitivity training.

Other measures enjoyed broad support, however. The proposal now labeled Senate Bill 1831 would allow adult adoptees age 53 and older access to their original birth certificates.

Some of the measures hit a snag on the second pass through the House, however.

House Speaker Rusty Bowers, R-Mesa, sponsored legislation that would allow people convicted of certain sex offenses when they were under the age of 22 to petition in limited circumstances after they turn 35 to have their name removed from the state’s sex offender registry. The bill did not get enough votes to pass in the House on Friday but passed by a vote of 38-20 on Monday.

There also is the question of whether the House will override one of the governor’s vetoes, as the Senate did on Thursday in a highly unusual and entirely ceremonial vote.

Sen. Tyler Pace, R-Mesa, moved to override the governor’s veto on a technical bill Ducey had vetoed, and the Senate obliged with a vote of 25-5. Only leading Senate Republicans opposed the move.

Pace acknowledged the vote would not have any major effect on policy but suggested instead that it was meant to represent the Legislature’s independence.

If the House votes to do the same, it would be the first time in decades that the Arizona Legislature has overridden a veto by a governor.

— Andrew Oxford

2:30 p.m.: Bill to extend college credit

The Arizona Senate overwhelmingly approved a proposal on Monday to allow the state’s students to receive more credit for classes they take at community colleges and universities while working toward a high school diploma and let more freshmen and sophomores participate.

High school students can currently enroll in post-secondary courses and receive credit toward both a college degree and high school graduation.

Under the state’s policies for dual enrollment, students can receive at most half of what is known as a Carnegie unit — a basic credit hour measurement used to calculate credits for high school graduation. House Bill 2021 would allow students to receive more than half a credit and would lift a limit on the number of freshmen and sophomores who can enroll in dual enrollment courses.

“If you have freshmen and sophomores that are ready for dual credit, there shouldn’t be some random percentage that have to be upper (classmen),” state Rep. Michelle Udall, a Republican from Mesa and the bill’s sponsor, said during a House Education Committee hearing in January.

The Senate approved the measure by a vote of 28-0.

With the Senate short a couple members, the chamber adjourned until 10 a.m. Tuesday.

1:45 p.m.: Sine die ... in July?

The state budget is almost done, but two of the 11 bills that are part of the spending plan still need work by the state Senate. That pushes the Legislature right up to the constitutional June 30 deadline for approving a budget for the fiscal year that starts July 1.

The two budget bills — one dealing with K-12 and the other with criminal justice — arrived at the Senate on Monday. It takes three days to pass a bill, under normal legislative process, which means the earliest these two bills could get a Senate vote is Wednesday.

If the Senate disagrees with the changes the House made to Senate Bills 1821 and 1826, then more work is required to match up the differing versions — and that could extend beyond Wednesday. 

In the criminal-justice bill, the House and Senate versions differ in how they define when a local government rule or policy would trigger possible pre-emption by the state. The House version is more stringent.

In the K-12 bill, an expansion of the state voucher program is at issue. The Senate has approved growing the program to cover up to 60% of Arizona schoolchildren; the House rejected the expansion.

Also up in the air is a proposal the House tacked onto the K-12 bill that would require the state Board of Education to adopt a civics curriculum that would highlight the benefits of democracy by contrasting it with other political ideologies, such as a communism and totalitarianism. 

These differences can be ironed out by the Senate agreeing to the House changes, or through a conference committee that would bring together House and Senate members to work out a compromise.

— Mary Jo Pitzl 

11:30 a.m.: Public access to DPS body-camera footage under review

The House and Senate both approved a budget bill funding body cameras for Arizona Department of Public Safety troopers, but a separate bill that would significantly limit public access to footage is still under discussion.

The Legislature approved $6.9 million for DPS body cameras, $6.6 million for overtime funding and $23.5 million for a 10% salary increase in fiscal year 2022.

The House and Senate passed slightly different bills that would allow DPS to withhold body camera footage if the department determines there is not an important public purpose to release it. Both chambers must approve the same version of a bill for it to move to the governor's desk.

DPS is the largest law enforcement agency in the state where the majority of its force is not equipped with body cameras.

— Perry Vandell

10 a.m.: Bill would shift election-related litigation to AG’s office

GOP lawmakers on Thursday passed a measure to give Attorney General Mark Brnovich, a Republican, sole authority to represent the state in election-related litigation and prohibited Democrat Katie Hobbs, the secretary of state, from hiring attorneys of her own.

The bill gives Brnovich’s office control of such lawsuits through Jan. 2, 2023 — when Brnovich and Hobbs both are scheduled to leave their respective offices. Brnovich is running for the U.S. Senate and Hobbs is running for governor in 2022.

The bill next goes to Gov. Doug Ducey.

Brnovich and Hobbs' offices have a contentious relationship in addition to the leaders being of different parties. In October, Hobbs filed a complaint with the State Bar of Arizona about the legal representation provided by several members of the attorney general's staff. She alleged the Attorney General’s Office violated ethics rules in several cases, such as by advising her office in a lawsuit and later intervening on the opposite side. 

— Andrew Oxford

9 a.m.: House, Senate must reconcile differences

The House and Senate are in the waning days of their 2021 session. Senate President Karen Fann, R-Prescott, said on Friday that she expects the Legislature will work on Monday and also Tuesday as well as potentially Wednesday, the last day of the current budget year.

Issues still on the table include a final decision on an expansion of the state’s school voucher program, defeated on Friday in the House after being approved earlier last week in the Senate.

Other issues on the table include a last-minute measure by Republicans that would require the state Board of Education to work with three particular organizations in developing new civics education standards that include instruction on a “desirable citizenry” and the stories of people who fled communism.

The House and Senate must approve the same version of a bill before it can be sent to the governor to be signed into law.

— Andrew Oxford

Friday at the Legislature:Education bill passes without voucher expansion; House goes home.m.: