Arizona lawmakers focuses tax breaks as 2017 session draws to a close
PHOENIX — After approving a small teacher pay raise when they passed a $9.8 billion state budget package last week, the Arizona Legislature’s 2017 session concluded Wednesday after majority Republican lawmakers passed tax breaks to corporate interests to drive economic development in the state.
The Senate also passed a partial restoration of a welfare cut Gov. Doug Ducey pushed through two years ago when he made the state the stingiest in the nation for aid to the very poor.
The Legislature approved a new $10 million “angel investor” tax credit program for capital infusions into small businesses and approved another measure that expands eligibility for a state job training fund to smaller businesses.
Opposition to another economic development proposal designed to benefit big manufacturers like chip-maker Intel evaporated Wednesday after the sponsor narrowed an amendment that would have extended its scope.
The House and Senate then approved the measure by Rep. Jeff Weninger that extended to 2025 a job-creation tax credit for big companies that was set to expire this year.
Senate Bill 1416 also includes new lower property taxes for Intel and other manufacturers in special trade zones that already pay an ultra-low tax rate on new equipment.
Weninger tried to amend the bill Tuesday to increase the amount of sales tax revenues normally sent to the state that cities could use to expand roads and other support facilities.
Intel announced in February that it would finally complete a multi-billion dollar computer chip plant in Chandler that was build several years ago but never used.
Also slipped into that measure is a tax break pushed by corporate jet seller NetJets exempting it from sales taxes. Gov. Doug Ducey vetoed the measure by Republican Rep. Jill Norgaard last month, but she revived it Wednesday.
Norgaard called the measure a good part of the commerce package but said Ducey didn’t assure he would sign it. However, its inclusion in the Intel bill that he and Republican legislative leaders back makes another veto unlikely.
Democrats mainly opposed the tax breaks, saying the state has given away billions of dollars to special interests while the Republican majority begs poverty when it comes to social services and public schools
“At the end of the day there will always be the excuse that we just don’t have the revenue to provide for the developmentally disabled, we just don’t have the revenue to provide for public schools,” Democratic Minority Leader Rebecca Rios said. “And this is why.”
One Democrat backed the measure: Rep. Cesar Chavez of Phoenix.
“Not only will SB1416 provide high-paying jobs to thousands of Arizonans, but it will catapult economic development in the right direction,” Chavez of Glendale said.
Senate President Steve Yarbrough praised the bill, which will benefit Intel’s operations in his hometown of Chandler.
“We authorized a manufacturer to take the (sales tax) from their own facility, their own property where they are building in this case an enormous investment, and use that money to benefit the citizens of the community, whether it be roads or sewers or lights,” Yarbrough said. “We think that’s a wise investment.”
The Legislature adjourned for the year at an unusually early time: 7 p.m. Typically, the final day goes into the wee hours and has often extended until dawn.
Left in the dust was a major rural development tax credit bill that was the subject of furious debate when Republican House members met Wednesday morning.
Many rural Republicans urged backing for Senate Bill 1212, which would allow out-of-state companies that generate $50 million in rural investment capital to get $30 million in tax credits, which they would sell to generate cash to repay investors.
Many Republicans also oppose the measure, which they say would create a program with little oversight and only a vague promise of benefits.
Republican House Speaker J.D. Mesnard decided to withdraw a proposal he rolled out last-minute Tuesday that would have required school districts to spend half of their yearly inflation increases on teacher raises.
The proposal, an amendment to an unrelated education bill, would have required school districts to spend about $38 million a year on raises for their teachers. The state budget passed last week gave teachers a 1 percent raise at the cost of $34 million.
The House speaker said he wanted to focus on the issue and will continue to do so.
In the Senate, Republicans mainly backed a restoration of a welfare cut Ducey made in his first year in office, with little support from Democrats, who wanted a full restoration.
The Republican governor pushed through a measure in 2015 that limited lifetime welfare payments to one year, the shortest in the nation.
The measure includes work or job training requirements for adults and that they ensure their children are regularly attending school. It also reduces or eliminates payments if the person is caught with a controlled substance or quits a job.
As part of Ducey’s plan to help drug offenders re-enter society, his proposal would allow people convicted of a drug offence to get food stamps and it waives licensing fees for those people.
The Senate also approved the repeal of a requirement that welfare recipients be fingerprinted in order to qualify for benefits.
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