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Sound fiscal practices in ’19 help Arizona weather ’20 storm

Arizona Capitol Building (Photo by Gage Skidmore/Flickr)

Arizona Capitol Building (Photo by Gage Skidmore/Flickr)

When Arizona Gov. Doug Ducey placed a priority on shoring up the state’s rainy day fund in 2019, he could not foresee the economic hurricane the state was headed for in 2020. Now, that fiscal prudence will help Arizona weather the crisis brought on by the COVID-19 virus.

Despite greatly reduced majorities in the Legislature (only two votes in the Arizona House of Representatives), conservatives held on to produce a series of wins on a variety of issues, according to the just released legislative ratings for 2019 produced by the American Conservative Union Foundation.

In back to back bills early in the session, the Arizona Senate protected the solvency of the state pension fund by stopping interest payments on payouts to beneficiaries. The Senate also increased the allowable appropriations to the rainy day fund to take advantage of the budget surplus. The House followed suit later in the year, in the latter case by that small two vote margin (31-29).

Larry Hart

Larry Hart

More fiscal responsibility was shown by paying down $190 million in state debt obligations, a vote carried in the House by that slim two-vote margin.  At the same time, Ducey was able to sign into law changes in the state tax code so that Arizona taxpayers could take advantage of the federal tax changes passed by Congress. Ducey had vetoed similar legislation in 2018, putting a priority on bolstering the rainy day fund.

Compare this to states like Illinois, which have ignored their growing debt for years and are crying out for a federal bailout to save them from the consequences of their bad fiscal policy.

As American Conservative Union Chairman Matt Schlapp noted, “We applaud Governor Ducey for his careful management of the 2018 budget surplus and commend those steadfast conservative lawmakers whose efforts have helped provide security for Arizonans and their families in these challenging times.”

While it is most readily apparent those budget measures were crucial in light of the coronavirus pandemic, lawmakers took critical action in other policy areas, too. School choice came up a winner, with one bill giving charter schools the opportunity to utilize vacant school buildings. 

Then there was what has become known as the Cruz amendment.  Senator Ted Cruz, R-Texas, was able to amend the federal tax cut bill to allow 529 tax exempt savings to be used for K-12 educational expenses. Arizona lawmakers added the same provisions to state law, allowing expenses for public, private or religious schools to be exempt from state taxation.

While narrow victories were eked out for these reforms, lawmakers were not so successful advancing other key conservative priorities. A bill to protect victims in class action lawsuits from unscrupulous trial lawyers who wind up with most of the money went down in the state Senate by two votes. Another bill to strengthen free speech laws passed the House, but fell one vote short of the 16 votes needed to pass the Senate.

However, Arizona is one of the few states to stand up to special interests by defeating a bill that has made the rounds in many other states and often been signed into law. This absurd measure makes it illegal to call a product “meat” or “milk” unless it comes from a cow. Thankfully, the House voted it down 22-36. (Do you believe almond milk comes from a cow? If you do, I wouldn’t admit it.)

All this produced for the Arizona House one of the highest Republican averages (91%) in the country, according to the 2019 American Conservative Union Foundation’s Ratings of Arizona. But what of the future?

Arizona has become a battleground state and Democrats are looking to wipe out those slim Republican majorities come November and take control for the first time in decades. It will be up to conservatives to preserve what they have or turn Ducey’s second term into a lame duck administration.

Larry Hart is with the American Conservative Union Foundation’s Center For Legislative Accountability. 

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