P.L.A.N. Update - Budget Hot Potato Tossed to Brewer‏

Legislature Delivers Budget Bills

After almost seven weeks in this Special Session, on Thursday the Legislature transmitted the nine-bill 2009-2010 budget package to the Governor without the provision to send a temporary sales tax referral to the voters. This package of budget bills is very similar to the one that was vetoed on July 1, and includes a permanent repeal of the statewide property equalization tax. Because the counties must finalize their property tax bills this week (or is it next week?), there is urgency as the Governor considers her course of action.

This morning Governor Brewer signed HB 2014, Environment; Budget Reconciliation. She reportedly is putting off until next week any action on the remainder of the package. HB 2014 is important to Phoenix because it removes a requirement for a bond election for the City's Water Services Department to access about $6 million in federal stimulus dollars for water and sewer projects financed through the State's Water Infrastructure Finance Authority.

The House and Senate are adjourned until 1 p.m. on Tuesday, August 25.

Bills conveyed to the Governor include:

HB 2006 – general appropriations
HB 2008 – general government
HB 2009 – assets
HB 2010 – criminal justice
HB 2011 – K-12
HB 2012 – higher education
HB 2013 – health & welfare
HB 2014 – environment (Governor Brewer signed HB 2014 this morning)
SB 1025 – general revenues (which includes a $22M vehicle license tax cut, property tax repeal, and assessment ratio changes)

The Joint Legislative Budget Committee (JLBC) the budget analysts for the Legislature, have posted the following the following budget bill details:

8/20 Plan as Transmitted to the Governor
Summary of House and Senate Budget Plan (8/20/09)
Budget Legislation Summary (8/20/09)

How Long Can This Go On?

The Arizona Legislative Manual states there is no limit on the duration of a special session. Since the Legislature did not pass the temporary sales tax referral requested by Governor Brewer, her response to the remaining budget bills will determine next steps.

Concerns for Cities and Towns

As reported in last week's message, the budget bills still contain items of concern to the City, including: a $22 million shift of vehicle license tax (VLT) revenues to school districts (Phoenix would lose between $5 and 6 million); 2-year freeze on impact fees, building codes and construction sales taxes; identification checks for public services, and reduction of the assessment ratio for commercial property tax (impacting Phoenix's secondary property tax levy by approximately $14 million/year). The package does not include the proposed corporate and individual income tax cuts that could have reduced revenue sharing for Phoenix by approximately $18 million/year as of FY 2014.

Source: P.L.A.N.