Gov. Doug Ducey leveled an unprecedented threat to Arizona cities in his State of the State address: Create a patchwork of laws that conflict with the state’s interest, and you’ll pay for it.
Republican legislators followed suit, proposing and passing laws dinging cities on employee benefits, pet store regulations, plastic bag bans and business improvement districts.
But perhaps the biggest swat stemmed from Ducey’s address and the financial threat the governor followed through on. The new law takes aim at state-shared revenue, the money parsed back out to cities, towns and counties from taxes collected at the state level. If cities pass laws that conflict with state regulations, they could lose that funding, the law says.
While the state and its liberal-leaning municipalities have long had a tense relationship with the Republican-dominated Legislature, this year’s session seemed worse for cities, with more preemption laws and more intensity from lawmakers who felt empowered by Ducey’s speech, said Ken Strobeck, director of the League of Arizona Cities and Towns.
“To have that line in the sand drawn (by the governor), and to have it drawn in such a threatening manner, was quite a surprise to us. I think that then opened the doors for people to say well, maybe my bill will make it through this year if it was vetoed in the past or didn’t get through in the past,” Strobeck said.
Ducey has signed bills that prohibit cities from adopting policies on pet store regulations aimed at outlawing puppy mills, plastic bag bans, fringe benefits, municipal improvement district formation and “San Francisco-style’’ employee scheduling (requiring two weeks advance notice to change an employee’s schedule.) He signaled support for a bill aimed at blocking municipalities from adopting their own minimum wage, though the measure failed to reach his desk.
Some of the laws stemmed from policies already adopted at the local level, including the plastic bag ban and municipal district formation.
Others were preemptive strikes on issues making waves nationally, like local increases to the minimum wage and employee scheduling, that have yet to be adopted anywhere in Arizona.
Arizona cities are not alone in watching its state officials clamp down on local authority. As Republicans have gained control of a majority of state legislatures and governor’s offices across the country, local governments have become the new stage to debate and pass progressive policies. According to the Pew Research Center, Republicans controlled both chambers of the legislature in 30 states as of 2015, while Democrats controlled in just 11 states. Eight states are split, while Nebraska has a nonpartisan, unicameral legislature.
The trend toward preemption laws may stem from progressive interests seeking a willing audience, said Sen. Katie Hobbs, D-Phoenix. With one-party dominance in statehouses, liberal lawmakers and interest groups see more opportunities to succeed at the local level.
“I think that you’re seeing a lot of progressive groups have a lot of wins at the local level. And so when you don’t control a state legislature, or really any branch of government, then the local way is how you can get stuff done,” she said.
Senate President Andy Biggs, R-Gilbert, said he has seen a major shift in the statehouse since he took office in 2003. When he was first elected, the Legislature was “far more moderate” than it is now, with 36 Republicans in the House and 18 Republicans, including Biggs, in the Senate.
“Maybe as the Legislature become more conservative and the state itself became more conservative, maybe people who would otherwise have targeted a partisan election to try to advocate for a liberal, progressive cause, maybe said, ‘Look I can’t get that done in the state Legislature, so I’ll try to get it done at a local level,’” Biggs said.
James Brooks, city solutions director at the National League of Cities, said the surge also coincides with the end of the Great Recession. Municipalities watched as a stagnant Congress and similarly conflicted state legislatures failed to act on issues that mattered at the local level. So, local elected officials chose to act themselves.
‘Dangerous to democracy’
“In the absence of federal leadership, municipalities started to step up and exercise control to solve problems at the local level on meaningful issues that mattered to their constituents, and they started to be activists, more activist than they already were, as problem solvers,” Brooks said. “And that does run afoul of higher levels of government who would rather exercise greater control rather than solve problems.”
Those local elected officials are now butting heads with state government leaders who, from an ideological perspective, often believe government is the problem, not the solution, Brooks said.
The National League of Cities finds preemption laws, like those signed by Ducey this year, to be “dangerous to democracy,” he said. Preemption strikes at the notion of federalism and what it means, he said. Cities exist because the states gave them power to manage issues that affect everyday life, he said.
“They can’t have it both ways. They can’t say the state is going to decide what happens at the local level from sitting here in the state Capitol. … Either you give them power or you don’t,” Brooks said.
‘Creations of the state’
Jon Russell, director of the American City County Exchange, said Brooks misses the point: States have the legal authority to give and take authority from cities, regardless of debate over whether the policy affecting cities is good or bad for local governments.
“We remind local jurisdictions that they are creations of the state, they are political subdivisions, and, by law, whatever powers the state gives them are given to them by the state, and those powers that taken away are also taken away by the state,” said Russell, who also a City Council member in Culpeper, Va. “Whether we like it or not is really kind of irrelevant to the question. That’s the way the law is.”
American City County Exchange an arm of the American Legislative Exchange Council, drafts model policy for local governments. Russell said the group is working on a model resolution that would “reaffirm” the role of states in setting minimum wages, which gives local bodies a way to counter the policies other cities have passed setting higher minimum wages. Local governments have begun to overstep their bounds and push more progressive laws in policy areas that were traditionally left to the state, Russell said.
Ducey, too, has repeatedly stated policy matters like wages and employment, and even regulations of pet stores, are matters of statewide concern. The governor claims he’s not looking for a fight with cities – instead, he wants to provide businesses with predictable regulations statewide and to “make this the best quality of life for our citizens.”
“It’s very difficult for a citizen to know the difference between Mesa and Tempe, where one starts and the other begins. Same in the West Valley. So if you have these different patchworks of laws and regulations, it’s not only tough on the citizen, it’s also tough on the employer, and oftentimes it can cost hardworking men and women their jobs,” Ducey said.
Russell claims that the progressive values being pushed by local governments are not necessarily based on high-minded ideals. In fact, there are special interest groups that feel they’ve lost a voice at the federal and state level – perhaps because of federal stagnation and more conservative state legislatures, he said.
“Those things are contrived by special interest groups who no longer have a way to lobby or an ear to lobby in the statehouse, so they’ve taken their work to the local levels and tried to push the boundaries as far as they can,” he said.
Russell recognized that there are special interests working at both the local and state level to pass laws, and said business interests often find a more receptive audience at the state level because of ideology.
But lobbying at either level of government isn’t illegal, and it’s up to citizens to cut through the noise, he said.
“If you don’t like it, there’s two remedies. One remedy is work with your legislators to change it, or vote them out of office. Those really are the two options people have,” Russell said.
A patchwork of laws
Strobeck said there’s always going to be a tension between states and cities over power, but states should focus on the big picture issues like education funding, child safety and a general vision for Arizona, rather than trying to restrict cities.
State leaders often cite a patchwork of laws that can be confusing to businesses and citizens. But cities realize that the policies they set locally can affect their ability to attract businesses and people, Strobeck said, which is why many of them have decided not to mess with minimum wage and employee benefits.
Bills aimed at minimum wage preemption are focused on a “phantom problem,” Strobeck said, since cities in Arizona have explored the idea of raising minimum wage, but have yet to do so. Local officials are well aware that policy decisions they make can have ramifications for their community in a statewide economy, he said.
“I think most of the time those issues can be worked out through either a non-legislative solution or some sort of collaboration between the state and the cities rather than just have bills introduced that take away our local authority without any sort of consultation with the city officials,” he said.
Turning to the courts
The solution in Arizona will likely be found in court. Strobeck acknowledged that the League of Arizona Cities and Towns is preparing for a potential lawsuit should the state try and withhold state-shared revenues. And local officials like Phoenix Mayor Greg Stanton are brash in the face of the state Legislature imposing its will on his city. Stanton said he refuses to allow Arizona legislators to put cities “into their narrow, ideological box.”
“I just think it’s silly and counterproductive to present cities as somehow a problem in the state of Arizona,” Stanton said. “If you look at where most of the economic activity is happening, it’s happening in cities. Phoenix is leading the way in Arizona’s economic recovery. So instead of attacking us and present us as a problem, I might politely suggest that the state should partner with us.”
In spite of his threat, Ducey said he’s only trying to shelter businesses from “feel-good laws” that have swept the nation at the local level, and which he claims have resulted in poor economic outcomes.
“I want to protect Arizona from that. And as governor, I’m going to do everything I can to make the state a better place to live, rather than to sit back and let bad policies move forward,” Ducey said. “When we can stop something that is a bad idea, oftentimes that can be just as hard as moving something forward that’s a good idea.”
– Jeremy Duda contributed to this report.