Jump to a bill
HB2279, HB2782 & SB1238 – Homeless shelter fund; performance audit
HB2282 – Unemployment; requirements; disqualifications; shared work
HB2296 & SB1320 – Corporate tax; business income; allocation
HB2375 – Guaranteed income program; prohibition
HB2502 – SNAP; mandatory employment; training
HB2503 – SNAP; waivers; exemptions
HB2906 & SB1744 – K-12 education; 2024-2025
HB2909 & SB1747 – Taxation; 2024-2025
HCR2047 & SCR1027 – State land trust; permanent funds
HCR2060 – Border; benefits; fentanyl; illegal entry
HCR2065 & SCR1047 Expenditure limit; school districts; authorization
SB1213 – Income tax; credit; labor costs
SB1388 – Temporary assistance; child only case
SB1397 – Paid leave; study committee; reports
SCR1040 – Tipped workers; wages
HB2279, HB2782 & SB1238 (S/E:) Homeless shelter fund; performance audit
Sponsored by: Representative Matt Gress and Senator Janae Shamp
AZCenter Position: Oppose
What do these bills do? Tried to divert $75 million and later $5.5 million from last year’s $150 million Housing Trust Fund appropriation. These bills also proposed arresting and punishing some people experiencing homelessness while seeking a safe place to sleep and supportive services.
Why do we oppose? Regardless of circumstances, we all deserve to have a roof over our heads. Arresting and punishing people experiencing homelessness will not solve the root causes of homelessness – the severe shortage of affordable homes for people with the lowest incomes and the increasing gap between incomes and housing costs.
In Arizona, there is one affordable and available rental home for every four extremely low-income renter households. Data from the Maricopa Association of Governments confirms that, in the Phoenix-Mesa-Chandler Metropolitan Area, availability of apartment units with rent under $1,000 have dropped from over 90 percent in 2010 to only 6 percent as of June 2023 – a stunning change of circumstances for families. Without affordable options, about four in five (79 percent) Arizonans with extremely low-income have no choice but to pay more than half of their limited incomes on rent.
Arizona’s Housing Trust Fund helps make housing more affordable by providing direct assistance to people and investing in building affordable housing. We should be investing more money into the Housing Trust Fund not clawing back its funds.
HB2282 Unemployment; requirements; disqualifications; shared work
Sponsored by: Representative Michael Carbone
AZCenter Position: Oppose
What does this bill do? Institutes additional red tape to utilize the Unemployment Insurance (UI) Program, ultimately requiring the Department of Economic Security (DES) to withhold paying benefits until information is cross-checked through seven databases. If information fails to match a database, workers will be automatically disqualified and referred for prosecution. In addition, although workers are already mandated to complete four work search activities per week in order to receive UI, the bill would needlessly require a fifth.
Why do we oppose? The additional red tape in this bill would be counterproductive to ongoing modernization efforts that will work better for consumers while also strengthening anti-fraud measures. Significant increases in fraud during the COVID-19 pandemic were attributed to the inability of the state’s outdated computer system to efficiently verify the integrity of large volumes of UI claims. DES is designing a solution through a technology modernization project that will greatly improve the ability to detect and prevent fraud in the future, particularly during periods of high unemployment.
With only one in six unemployed workers receiving UI in Arizona, this bill creates more barriers for people who need UI as a safety net until they find another job. In particular, workers of color face disproportionate obstacles to obtaining UI as a result of structural racism in the economy. The digital nature of work searches creates challenges and stress for people living in rural areas, those who are not digitally literate, or those with no internet access. More bureaucratic obstacles are not needed, especially when Arizona already has one of the most restrictive UI benefits in the country.
HB2296 & SB1320 Corporate tax; business income; allocation
Sponsored by: Representative Oscar De Los Santos and Senator Mitzi Epstein
AZCenter Position: Support
What do these bills do? Eliminates the option that allows large corporations to calculate their Arizona taxable income solely on sales. Large profitable corporations that do business both in Arizona and other states have a choice of two methods for calculating their Arizona taxable income. The first method is a calculation based on their payroll, property, and sales within Arizona compared to their totals nationwide. The second method is calculated based only on their sales.
Additionally, the law clarifies the sourcing of intangible property sold or leased in the state.
Why do we support? While the inclusion of a single-sales formula was enacted to spur economic development, research has shown that switching to a single-sales apportionment does little to shift economic activity to a state. Furthermore, the current law allows corporations to choose between single sales or a three-factor apportionment formula, ensuring that multistate corporations will pay the least amount to Arizona regardless of headquarters, principal place of operations, or nature of the corporation’s trade or business.
Additionally, the bill clarifies that intangible property sold to customers in the state will be sourced to this state. This clarification ensures that Arizona fully taxes large digital goods and service corporations that avail themselves of the Arizona market.
Currently, most corporations doing business in Arizona pay only the minimum tax of $50. During a time of increased budgetary pressure from the enactment of a flat tax, Arizona has a responsibility to generate adequate revenue to maintain K-12 school funding and other necessary public services and infrastructure. Shifting back to the double-weighted sales apportionment methodology and clarifying the sourcing of sales of intangible property will allow Arizona to fully tax business income rationally related to the benefits the state provides.
HB2375 Guaranteed income program; prohibition
Sponsored by: Representative Lupe Diaz
AZCenter Position: Oppose
What does this bill do? Bans counties, cities and towns from creating guaranteed income programs. Guaranteed income (or income assistance) programs help people and families afford everyday goods at a time when wages have not kept up with the skyrocketing costs of things like housing, child care, and groceries.
Why do we oppose? High costs are leading to unsafe and unstable consequences for people disproportionally experiencing homelessness like older adults and youth who have experienced foster care. Policy solutions like time-limited guaranteed income programs have been used in some communities specifically to support these seniors and youth, as well as others facing systemic barriers to economic security. Income assistance programs also keep money flowing through local economies.
Building local solutions that work for their residents and economies is the job of locally elected officials, and they should be allowed to do that job.
Read our blog on guaranteed income programs for more detailed analysis.
HB2502 SNAP; mandatory employment; training
Sponsored by: Representative Leo Biasiucci
AZCenter Position: Oppose
What does this bill do? Makes participation in the Supplemental Nutrition Assistance Program (SNAP) Employment and Training (E&T) program mandatory for people ages 16-59 unless specifically exempted. The SNAP E&T program helps some people receiving SNAP improve their jobs and earnings.
Why do we oppose? SNAP E&T programs can provide effective training and job support services when adequately funded. Given limited federal funding for SNAP E&T programs, a mandatory program would require significant state investment to ensure our program remains successful. HB2502 would not invest additional state dollars to this program.
Instead, it would water down current resources making it impossible to provide the meaningful training opportunities people need to improve their economic well-being and then put Arizona at risk of losing current SNAP E&T federal funds. Ohio, a state with a mandatory E&T program, has failed to meet employment goals for participants and is at risk of losing federal funds for not meeting federal requirements. Ohio is currently working on redesigning their E&T program back to a voluntary model.
Most importantly, a mandatory SNAP E&T program would take away nutrition assistance from people most in need. Among those most affected would be people with mental health conditions, people with disabilities, and single parents with children who would face barriers in providing exemption documentation.
HB2503 SNAP; waivers; exemptions
Sponsored by: Representative Leo Biasiucci
AZCenter Position: Oppose
What does this bill do? Requires legislative approval for the Department of Economic Security (DES) to request Supplemental Nutrition Assistance Program (SNAP) administrative waivers of work requirements for people ages 18-54 without dependents.
Why do we oppose? SNAP reduces poverty and food insecurity while stimulating economic growth, yet this bill would limit our state’s ability to respond to the needs of community when work is difficult to find.
Waivers are granted after considering the economic situations in the state. While the state unemployment rate may be low, this is not the case for many rural and tribal communities. For example, unemployment rate in Yuma county was 12.8 percent in 2023, Apache county stood at 7.9 percent, while Santa Cruz’s was 7.5 percent. These three counties also experience the highest rates of food insecurity with Apache experiencing the highest at 21.5 percent. Tribal communities experience even higher rates with 1 out of 4 people being food insecure. The most recent average unemployment rate for a designated workforce development area that includes thirteen tribes in Arizona, is 13.2 percent.
With every dollar from SNAP generating up to $1.79 in economic activity, this bill would limit SNAP’s ability to act as an automatic stabilizer during recessions. When emergency allotment amounts ended in 2022, redemptions for retailers in Arizona dropped $500 million in one year alone.
HB2906 & SB1744 K-12 education; 2024-2025
Sponsored by: Representative David Livingston and Senator John Kavanagh
AZCenter Position: Oppose
What do these bills do? Reforms the Empowerment Scholarship Account (ESA) program that will close a loophole that allowed children to receive ESA funds and attend a public school. It requires the Arizona Department of Education to publish a list of allowed and disallowed expenses for ESA funds. Furthermore, the bill will require any private school that receives ESA funds to fingerprint employees that will have unsupervised contact with children.
Why do we oppose? Despite the modest reform to ESAs, this bill falls short of implementing the necessary reforms to resolve the budgetary shortfalls created by an expanded ESA program. A recent report by the Brookings Institution highlighted that ESA funds tend to be utilized by children located in affluent zip codes. The positive correlation between ESA participation and income is concerning and suggests that ESAs primarily benefit those with the greatest ability to pay for private school tuition.
HB2909 & SB1747 Taxation; 2024-2025
Sponsored by: Representative David Livingston and Senator John Kavanagh
AZCenter Position: Support
What do these bills do? The bill caps the aggregate amount of the student tuition organization (STO) tax credit for corporate contributions to $135 million annually. STOs use the contributions received to award scholarships to students attending private schools. Unlike individual income tax contributions to STOs, which are capped for each person or couple filing jointly, corporate contributions are capped in the aggregate.
Additionally, the bill addresses the Qasimyar v. Maricopa County decision, in which the county was found to have incorrectly taxed property owners without considering a change of use of their properties. Under the decision, Arizona school districts must pay back significant amounts of money. The bill will allow the school districts to issue tax anticipation notes and will require the Arizona Department of Education to recalculate state aid to these school districts for the prior years impacted by Qasimyar.
Why do we support? The bill provides a modest measure to reform the STO tax credit for corporate taxpayers by reducing the cap on the total amount of credits to a set $135 million amount. Previously, the STO cap for corporations was set to increase based on inflation. This means the current cap of $158 million would have otherwise increased to $167 million in FY2025.
Prior to FY2023, the cap had been reached every year. Corporations have only claimed $116 million out of the $158 million tax credit limit in the current fiscal year. This may be due to STO tax credits becoming less popular as private schools receive more direct tuition funding through the Empowerment Scholarship Account (ESA) program. With the cap lowered to a fixed amount, the reform is a small a step forward even if it may have only a small impact on stemming the depletion of General Fund revenue to fund private schools.
HCR2047 & SCR1027 State land trust; permanent funds
Sponsored by: Representative Matt Gress and Senator J.D. Mesnard
AZCenter Position: Oppose
What does this ballot referral do? Extends the 6.9 percent distribution to K-12 education from the state land trust, but also leaves a funding shortfall for schools by redirecting already allocated funds toward increasing teacher’s pay. Increasing teacher pay as well as the pay for other essential school personnel is critical to get done without budget gimmicks such as this one.
In 2016, Proposition 123 increased the state land trust distribution directed to basic state aid from 2.5 to 6.9 percent from 2016 through 2025. This meant K-12 education was estimated to receive about $343 million for basic state aid instead of $72 million last year had distribution remained at 2.5 percent. Basic state aid is the state funding provided to K-12 school districts that do not collect enough funding from local property taxes to ensure an equal amount is spent on each student in Arizona.
Why do we oppose? While this proposal would continue the increased 6.9 percent distribution from the state land trust to K-12 education, it would redirect all or most of the distribution for teacher pay — away from basic state aid. Redirecting already allocated funds away from basic state aid would leave a $300 million plus hole for basic state aid that would need to be filled with General Fund dollars. Even if the distribution goes back to 2.5 percent, the General Fund would still need to pay the difference and JLBC has accounted for this in their baseline for this year’s budget.
Having General Fund dollars backfill loss of state land trust funding for basic state aid also increases K-12 education’s share of the General Fund pie. This brings up another concern: these bills do nothing to address Prop. 123 triggers that would reduce K-12 education funding should K-12 reach 49 percent of General Fund spending. With the diversion of public funds from public schools to Empowerment Scholarship Accounts (ESA), K-12 education funding is getting closer to this 49 percent trigger, which would result in an overall funding decrease.
HCR2060 (Proposition 314) S/E: Border; benefits; fentanyl; illegal entry
Sponsored by: Representative Ben Toma
AZCenter Position: Oppose
What does this ballot referral do? Subjects immigrants to state charges for not entering through an official port of entry and submitting false documentation when applying for employment and public benefits. By creating state penalties for immigration law violations, an area of federal jurisdiction, this ballot referral empowers state and local government law enforcement officials to incarcerate immigrants.
Why do we oppose? Immigrants are members of our communities and families, helping build healthy and growing state and local economies. In 2021, immigrants in Arizona accounted for about 16 percent of our state’s economic output – that’s $69 billion to our state’s economy. HCR2060’s targeting of immigrants and their families would disrupt the contributions of immigrants to our state and local economies.
Additionally, Proposition 314 is an unfunded mandate that will pose the highest cost to local communities closest to the border. When local governments need to raise revenues for law enforcement costs, they tend to increase property and sales taxes. Higher property and sales taxes affect all residents of a community, and we also note that both property and sales taxes are regressive meaning people with lower incomes would bear the highest burden. According to the Institute on Taxation and Economic Policy (ITEP)’s Who Pays? report, people with the lowest incomes pay almost triple what those with the highest incomes pay in property and sales taxes in Arizona.
HCR2065 & SCR1047 Expenditure limit; school districts; authorization
Sponsored by: Representative David Livingston and Senator Kavanaugh
AZCenter Position: Support
What do these bill do? Allow school districts to spend funds above the Aggregate Expenditure Limit (AEL) for the 2024-25 school year. The AEL is based on what school needs were like in 1980 and does not adequately consider the cost of education in 2024. The state legislature must lift the spending cap each year before March 1.
Why do we support? If the aggregate spending limit is not lifted, school districts would begin the school year in fear that they could face an abrupt cut on April 1, 2025, which could result in school closures or teacher layoffs.
SB1213 Income tax; credit; labor costs
Sponsored by: Senator Wendy Rogers
AZCenter Position: Oppose
What does this bill do? Creates a tax credit for employers who have to pay a local minimum wage that is greater than the statewide minimum wage.
Why do we oppose? This bill punishes any Arizona city that enacts a minimum wage which exceeds the state’s minimum wage. Though Arizona’s state minimum wage is higher than many other states, research shows that it is still less than a living wage in many Arizona cities. Additionally, higher minimum wages are positively correlated with increased economic activity. The state should not interfere in local policymaking where local leaders determine that livable wages are the right economic tool for their communities.
Furthermore, the bill is poorly written such that any employer paying any employee over the minimum wage would be entitled to an income tax credit, even in sectors where the market rate wage is above the minimum wage. The failure of the bill to restrict the employers that may claim the credit, ensures that cities like Flagstaff would lose the maximum amount of Urban Revenue Sharing funds allowed under the bill – posing a greater impact to General Fund than estimated.
SB1388 Temporary assistance; child only case
Sponsored by: Senator Lela Alston
AZCenter Position: Support
What does this bill do? Restores access to Temporary Assistance for Needy Families (TANF) cash assistance for children living in informal kinship care. Informal kinship care is when a child under the care of kin has never entered the foster care system.
Why do we support? For every 1 child raised by kin in foster care, 8 children are being raised by kin outside of foster care in Arizona. Yet, these 8 children have been ineligible for TANF support since Arizona cut their eligibility after the Great Recession.
By restoring TANF for children living in informal kinship care, Arizona will provide additional financial support to help informal kinship families cover the rising costs of housing and other basic needs. Additionally, such benefit is likely to be cost-effective, because it will help keep children out of the costlier state foster care system. Nationally, informal kinship caregiving is estimated to save more than $4 billion each year by keeping children with family and out of the foster care system.
Check out our blog on restoring TANF support for children living in informal kinship care for more detailed analysis.
SB1397 Paid leave; study committee; reports
Sponsored by: Senator Mitzi Epstein
AZCenter Position: Support
What does this bill do? Establishes a paid family and medical leave (PFML) study committee consisting of 21 members representing diverse labor and business communities across Arizona, state and local government officials, and medical experts to review the costs and benefits of implementing a state paid leave program in Arizona.
Why do we support? A PMFL study committee is an important start to establishing important data and facts about how a state paid leave program would work for Arizona workers, businesses, and economy.
Paid leave rose to importance in the minds of workers and their families during the pandemic. So much so that about 2 in 10 workers work for employers that began offering paid leave for the first time or strengthened paid leave benefits since the pandemic. Additionally, Congress gained and lost momentum to pass legislation to create a national paid leave program twice. With the failure to establish a national program, thirteen states have enacted state-paid leave programs, five of these states since the pandemic, to meet the need for workers to take time off to care for themselves or a loved one.
Despite a tight labor market and more workers receiving paid leave from their employers, 75 percent of Arizona workers, especially those in lower-paying jobs, still have zero access to paid leave.
Watch our video on Paid Leave in Arizona to find out why paid leave is the hero we all need!
SCR1040 (Proposition 138) S/E: Tipped workers; wages
Sponsored by: Senator J.D. Mesnard
AZCenter Position: Oppose
What does this ballot referral do? Lowers the subminimum wage for tipped workers whose hourly wage (including tips) is $2 above the state minimum wage from $3 less than the regular state minimum wage to 25 percent of the regular state minimum wage.
This means the gap between the state minimum wage and the subminimum wage for tipped workers would grow as the state minimum wage increases – forcing tipped workers to rely more on tips to maintain their wages. If Arizona’s minimum wage was $20, this legislation would require tipped workers to earn $5 from tips as opposed to $3 under current law to make the same amount.
Why do we oppose? Increasing the difference between the state minimum wage and the subminimum wage for tipped workers would lead to higher poverty rates for tipped workers. Under current law, tipped workers in Arizona have a 9.8 percent poverty rate compared to 5.5 percent for nontipped workers. SCR1040’s plan to lower the subminimum wage would increase an already high poverty rate for tipped workers. Tipped workers in states with the lowest subminimum wages experience poverty at double the rate of nontipped workers with waitstaff and bartenders at triple the rate.
Additionally, SCR1040 worsens a system where some workers are treated differently from everyone else. This creates a structure that exposes these workers to systematic mistreatment. With 2 in 3 tipped workers in Arizona identifying as women, Prop 138 would disproportionally worsen women’s exposure to abuses such as wage theft.
In 2012, USDOL found an 84 percent violation rate of wage and hour laws in investigating 9,000 full-service restaurants. USDOL described the two-tiered wage system as “unenforceable”, because of the unrealistic expectations it places on tipped staff to keep track of their earnings (hours and all tips received in both cash and credit cards) and job duties (tipped vs. nontipped duties and how much time was spent on each) to police their employers – while simultaneously performing their jobs.