Fireworks and Finances‏

Today is Day 82 of the legislative session and Senate President Burns is still holding firm to his promise to hear only budget bills until the FY10 budget is completed (with one exception described below). The Senate has been hearing agency testimony and budget updates from the Joint Legislative Budget Committee. To see and hear the video of the committee hearing for any of the bills mentioned in this message, click on the bill link, then on "Show Bill Video" at the bottom of the bill page.

Fireworks!

The House, however, has been hearing bills. HB2258 Consumer fireworks; novelties; sales (NOW: consumer fireworks) (Andy Biggs, R - Gilbert) allows for the sale of “consumer fireworks” and “novelties” by dealers licensed by the state fire marshal. Licensing revenues would go into a new fund and be used for enforcement of the fireworks regulations required by the bill. The bill allows a city or town to regulate use of consumer fireworks and prohibits sale of consumer fireworks to anyone under sixteen years of age. Arizona has never permitted "consumer fireworks" and fire safety officials have expressed serious concerns about this bill. HB 2258 passed the House Committee of the Whole and now awaits Third Read action in the House.

Pennies in Your Paycheck

SB1185 Technical correction; disincorporation (NOW: conformity; internal revenue code) (Bob Burns, R - Peoria) conforms Arizona law to the Internal Revenue Code. This conforming bill is needed every year, but is complicated this year by the federal economic stimulus legislation that includes the "Making Work Pay" individual income tax credit. The new tax credit comes in the form of reduced federal income tax withholding -- which increases most employees' take-home pay. Under current Arizona law, state income tax withholding rates are tied to the federal withholding rates, so "Making Work Pay" has the unwanted effect of decreasing state cashflow by about $73 million. SB 1185 temporarily adjusts the state withholding rates to offset the withholding reduction, and then beginning in FY11 decouples state withholding rates from federal rates. Since it contains an emergency clause, the change in withholding rates can take effect immediately upon signature of the Governor.

Other Money Matters

On Tuesday, the Finance Advisory Committee (FAC), a group of economists that provides input to the Joint Legislative Budget Committee (JLBC), painted a grim picture of Arizona’s current state of fiscal affairs. The FAC reported that revenues are dropping faster than previously anticipated and recovery is still one year away. The FAC also estimates the state’s FY 10 budget to be $2.93 billion in the red, less than the $3.5 billion that was reported last month. With this information, legislative leaders continue to work behind closed doors on addressing both the current FY 09 budget shortfall of more than $500 million and the FY 10 budget.

State legislators asked the universities and other experts to noodle ideas to solve the budget shortfall other than cuts. Yesterday, they presented their recommendations. Read about their ideas in University experts recommend Ariz. tax changes, the Associated Press article by Paul Davenport.

Remember to SHOP PHOENIX and tell your legislators to protect city revenues!

Source: P.L.A.N.