Legislative Overview

Today is the 110th day of session. The beginning of the week had very light duty, but on Thursday the Senate took up the budget process in earnest with the Appropriations Committee hearing the 14 bills that make up the budget package. The House Appropriations Committee met Thursday night and also went through the budget bills. There are differences between the two packages, so there will have to be floor amendments to match them up. Below you will find an analysis of pertinent municipal issues within the budget that we know of at this time. The legislature is meeting today to hopefully wrap up the budget process. There are still other bills that will need to move through the system next week.

We remain at 106 bills passed, 105 signed, and one vetoed: the cursive writing mandate.

State Budget

This analysis is based on the bills passed by the respective Appropriations Committees. Floor activity is scheduled for today, although times are fluid.

First off, there are no formula changes to Urban Revenue Sharing, TPT Revenue Sharing or VLT Revenue Sharing accounts.
The budget proposes to sweep $96 million from HURF (the same amount swept last year) but then makes a one-time appropriation of $30 million from the General Fund to cities, towns and counties to be distributed in a manner similar to the HURF formula. After applying the formula specified in the bill, this results in an increase of approximately $16 million in new funds to cities and towns.
Additionally, there is a $66 million one-time general fund appropriation to the State Highway Fund to offset the remainder of the HURF sweeps. Included in these funds is $25 million to ADOT for acceleration of the SR 189 construction project. (This is a League resolution.)
The Senate proposal also includes an appropriation of $19 million from the State Aviation Fund for planning, construction, development and improvement of state, county, city or town airports. This represents a significant increase over last year's appropriation.
There is a one-time appropriation of approximately $1.3 million for border strike task force local support, $761,700 of which is to be used for local law enforcement officer positions within the task force. Access to these funds requires a 25% local match. The remaining $500,000 is to be used for grants to cities, towns and counties for costs associated with the prosecution and incarceration of crimes related to illegal immigration and other border-related crimes.
Also included in the Senate proposal is an appropriation of $1 million from the Automation Projects Fund to ADOA for a feasibility study to replace the tax accounting system at the Department of Revenue.
The Senate proposal continues the $20.7 million assessment to cover the costs of services ADOR provides to local governments. The one-time special assessment imposed on self-collecting cities has lapsed.
There are also proposed tax reductions totaling $26 million. The most significant of these is attributed to income tax reductions associated with accelerated depreciation for personal property ($8 million) and modifications to the exemptions to the state's portion of utility taxes ($7 million). The impact to cities and towns would be negligible.

Legislative Bill Monitoring

(All bills being actively monitored by the League can be found here.)

Legislative Bulletin is published by the League of Arizona Cities and Towns.
Forward your comments or suggestions to league@azleague.org.