Expanding Liberty, Protecting Taxpayers

July 9, 2013 by  

Highlights from the 2013 Session

How was your money spent?:   With the exception of the Obamacare Medicaid expansion pushed through this past session,  the Republican Majority has made tremendous strides in the past three years in balancing the books of the State of Arizona. We are already seeing signs that Arizona is one of a small number of states poised to come out of the lingering recession with solid growth and strong balance sheets.  Budgeting is now required to be done not just for the current fiscal year but three years out.  By FY 2016, we can now predict that Arizona will have a structurally balanced budget.  Leadership in the legislature managed to maintain spending levels, but increase funding in a few key areas.

Total spending increased in FY 2014 by $289.9 million, or 3.35%.

K–12 Education – $99.1 million

DES – $57.4 million

Universities – $30.8 million

School Facilities – $13.8 million

Counties – $7.2 million

In addition, we have held on to the $450 million Rainy Day Fund, put in place last session to prepare us for the next two years’ expected revenue shortfalls.

Sales Tax Reform:  Among the most significant achievements this session was to clean up one of the most convoluted sales tax systems in the country.  HB 2111  makes a variety of changes to the transaction privilege tax (TPT) system:

Single point of collection for all taxpayers. All taxpayers will be able to remit a single TPT return and a single payment like most other states.

A standardized statewide audit system administered by the Department of Revenue (DOR). All multi-jurisdictional audits will be conducted by DOR. Audits of single jurisdictional taxpayers may be conducted by a city auditor who is trained and certified by DOR.

Trade or service providers hired directly by the property owner to maintain, repair, or replace existing property will no longer be subject to the state or city prime contracting tax, but will instead pay retail tax on materials at the point of sale.

Small Business Income Tax Relief:   Retroactive to tax year 2013. HB 2531 allows small businesses to depreciate a greater amount of their purchases which in turn helps them to invest in the economy and hire more employees.  Read how these Tax deductions could jolt Ariz. economy (AZ Republic, July 28, 2013)

Pension ReformThe Legislature continued efforts to reign in underfunded state public pension programs.  This year’s focus was the Elected Officials’ Retirement Plan (EORP). The existing defined benefit system is unsustainable and only 58.4% funded (underfunded by $253 million). Under HB 2608 (EORP; closure; defined contribution), as of January 1, 2014, newly elected officials and appointed judges will be covered by an Elected Officials’ Defined Contribution Retirement System that more closely resembles private sector retirement savings plans. This measure allows the State to pay $5 million annually for the next 30 years to amortize the EORP unfunded liability.

Tax Relief Package:  SB 1179 provides KEY tax relief for consumers and businesses in a variety of areas including • Ignition interlock devices – Destination management services • College Savings Plans Sales of Energy Drinks Biodiesel Fuel Manufacturing Facilities College Savings Plans Qualifying Charitable Organizations Multistate Service Providers

Welfare AccountabilityHB 2205 prevents welfare benefits from being used in liquor stores, in gaming establishments or adult oriented businesses.

Education 

Choice & Accountability –  Our State leads the way in school choice. This year the Legislature continued efforts to improve and expand options for students and parents. Arizona is the only state in the nation to have Empowerment Scholarship Accounts (ESAs), which provide options for children in failing schools or those with special needs. This Session, the Legislature expanded the program to include children entering Kindergarten.  SB 1363 also increases the amount of each scholarship.  Accountability for ESAs was improved with HB 2458, which strengthens ESA fraud prevention.

Protecting Student Records – The Family Educational Rights and Privacy Act (FERPA) is a federal law intended to protect the rights of students’ education records and applies to all schools that receive funds under a program of the United States Department of Education.  SB 1450  outlines a notification process for school districts and charter schools determined to be in violation of the FERPA.

Elections Reform  –  The voting process is the backbone of democracy.  Upholding the integrity of the electorate system is a core goal of the Republican Majority.  To that end, HB 2305 addresses multiple election reform related issues including • cleaning up the early voting roll  •  preventing early ballot abuse  • modifying  petition signature requirements in alignment with free market ideals and leveling the playing field and initiative & referendum reforms.  Plus, because Arizona’s campaign contribution limits are notoriously low, HB 2593 increases the contribution amounts individuals and political committees are permitted to give and that exploratory committees, candidates and candidate campaign committees are permitted to accept so that free speech is no longer stifled.

Health Care and Families

Transparent health care prices Obamacare implies that health care will miraculously transform into an affordable delivery of services.  However, the Affordable Care Act (ACA) fell short on a key element which empowers consumers – transparency. Patients are not privy to the closed door culture of medical pricing and network development. HB 2045 requires health care facilities to make available upon request the cash prices of the 25 most common services. Hospitals must provide at least 50 of the most common services.  This measure will enable the public to better understand what procedures will cost them should they elect to pay providers directly.

Military Personnel – Removing Regulatory BarriersThose serving our country will be relieved of some of the regulatory barriers to licensure in Arizona through the enactment of HB 2064. Having met the federal licensure requirements relating to medical and dental practice, the bill requires the Arizona Medical Board and the Board of Dental Examiners to issue a training permit so that these military professionals may participate in clinical training programs at civilian hospitals.

CPS – Funding –  Legislators placed a high priority on ensuring that Child Protective Services (CPS)  was adequately funded to improve the response time, protocol and services provided to children and families in crisis. One of the first measures signed into law was a supplemental appropriation of $4.5 million to hire 50 Full-time positions. The budget provided an additional $57.4 million to support the agency.  These funds bring hope that the additional 200 caseworkers and support staff will strengthen CPS and protect this vulnerable population.

Foster Care – With record numbers of children in the Child Protective Services system in need of a home and a family to tend to their needs, the Legislature took a number of measures to encourage and promote an increase in foster parenting.  HB 2074  extends foster care licenses from one to two years. The bill also authorizes the Department of Economic Security to place a child into a home beyond the maximum limit if there are siblings currently residing in the home, if the child has been previously placed in the home or if it is a kinship placement. In addition, SB 1108 removes the certification barrier by prohibiting DES from requiring foster parents to immunize their natural or adoptive children as a condition of licensure. Foster families are already required to fully immunize children placed in homes and the agency maintains discretion when considering placement.

More Foster Care/CPS Reform – Adoptive and foster families have voiced their concerns about the provision & coordination of services for children in the CPS system. Many have experienced denial and/or a delay in receiving behavioral health services for these vulnerable children. Constituent inquiries led to the discovery that the penetration rate for provision of medical and behavioral health care for these children was far below the national average and led to a corrective action plan with the current behavioral health provider. SB 1375  requires State agencies to gather data and determine if integration of comprehensive medical, dental and behavioral health services for foster children is administratively feasible.  SB 1375 also contains significant reforms to the child welfare system.

State control over Insurance – The Affordable Care Act (ACA) contains a one-size-fits-all approach to the health insurance market.  It mandates certain benefits be provided and creates an illusion that health care will be cheaper. Although the full effect of the expansive coverage in the ACA is not quantified at a set premium price, we do know that factoring in all global aspects of the market nationwide (such as age, geography, tobacco use and family size) will likely lead to costs that do not meet the public expectation. As such, the Legislature enacted HB 2550, which requires the Department of Insurance to adopt rules and orders to regulate health insurance policies sold in the State. The bill adopts local geographic rating areas that will aid in the development of guaranteed issued health policies in this State and keep regulation at the local level.

Behavioral Health Examiners Board Reform – SB 1374  makes sweeping changes to the Board of Behavioral Health to ensure qualified professionals in the counseling and social work fields can work in Arizona without undue and unjustified scrutiny while maintaining the standard of care for public safety.  The bill eliminates the credentialing committees currently in place and replaces them with academic review committees to keep pace with the appropriate curriculum and national standards to address frustrations with reciprocity licensure.

Bath Salts – to combat the availability of bath salt compounds and their destructive effects on our youth, the Legislature passed HB 2327, which expands the definition of dangerous drugs to include specific chemical configurations that typically compose synthetic cannabinoids and bath salts.  These synthetic drugs are known to cause heart attacks, strokes, seizures, paranoia, violent hallucinations, and panic attacks.

Tort Reform – Encouraging business growth and sustainability is a staple of the Republican Majority platform.  Two bills in particular address legal issues related to tort reform. SB 1346 (class  action; reform) seeks to reform the class action process by modifying procedures for appealing class certification in class action lawsuits.  HB 2485 (health and safety audit privilege) creates a privilege for certain occupational health or safety audits and related reports, and seeks to address issues related to product liability actions to ensure and maintain a thriving business community in Arizona.

“Medical” Marijuana Accountability – Following voter approval of an initiative allowing for the medicinal use of marijuana and the regulated growing of marijuana at dispensaries, Arizona counties became concerned that current statutes could allow a marijuana dispensary to open next to residential neighborhoods and schools.  SB 1098 (marijuana; cultivation; county zoning) allows counties to prohibit dispensaries from operating in certain areas in accordance with county zoning ordinances.

Public Safety

Families of fallen officers & firefighters – Safe communities are an integral part of a productive society. When a law enforcement officer or firefighter makes the ultimate sacrifice in the line of duty, HB 2204 ensures that the surviving spouse and dependents of a fallen officer or firefighter are provided health insurance.

Protecting 2nd Amendment Rights – Law abiding citizens are afforded inalienable rights under the Second Amendment to keep and bear arms.  In response to a New York media outlet posting the names and addresses of law abiding gun owners, HB 2326 (firearms; records; prohibited acts) restricts the ability of political subdivisions to keep records of identifying information regarding people who own, sell or transfer firearms.  Recognizing that it is not the government’s job to destroy weapons, HB 2455 (unclaimed property; firearms; disposition) prohibits the State, its agencies and its political subdivisions from facilitating the destruction of a firearm or acquiring a firearm for destruction.

Photo Radar – In an attempt to prevent cities from using photo radar strictly as a revenue source, the Legislature passed HB 2477 (photo radar on state highways). The bill prohibits a city or town from placing a photo enforcement system on a state highway unless it can be proven necessary for public safety and the city or town gets a permit from the Arizona Department of Transportation.

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