Latest Arizona Legislative Updates

One Ballot Measure Removed, Others Facing Challenges

The November ballot got slightly shorter this week when the One Fair Wage initiative failed to make it to voters. Thirteen measures remain on the ballot, but legal challenges to some of those proposals continue to make their way through the courts:

• The Arizona Supreme Court allowed legislative Republican’s description of the Arizona Abortion Access Act, which references “unborn human being,” to be used to describe the initiative to voters.
• Opponents of the Arizona Abortion Access Act asked the Arizona Supreme Court to keep the measure off the ballot because of the summary provided to voters.
• The Arizona Supreme Court allowed Proposition 314 to go to voters, ruling that the proposed changes to border enforcement do not violate the constitutional requirement that ballot measures cover just one subject.
• Supporters of the now-defunct One Fair Wage initiative asked the Arizona Supreme Court to remove Proposition 138, a change to tipped worker wages that the legislature sent to the ballot this year. Opponents of the measure assert that the title selected by legislative Republicans, “The Tipped Worker Protection Act,” is misleading.
• A superior court judge said the legislature’s description of the Make Elections Fair initiative is biased and must be rewritten, but House and Senate Republican leaders plan to appeal the decision. Courts also ruled that the initiative is constitutional and has enough valid voter signatures.
• A superior court judge ruled that 137, which would end retention elections for many judges, does not violate the single-subject limit for ballot measures and will remain on the ballot. The two Arizona Supreme Court justices who would immediately benefit from the measure plan to recuse themselves from consideration of the case.

State Agency Leadership Still in Limbo

This week, Governor Katie Hobbs (D) announced an agreement with Senate Republican leadership that would end a months-long standoff over state agency leadership. The agreement didn’t eliminate the frustration from either the Governor or Senate Republicans, though, and the superior court judge wants changes before he will sign off on the proposed settlement.

It’s not clear how the end of the lawsuit will result in any actual changes to the Senate’s treatment of Governor Hobbs’ nominees, which she is expected to resubmit by next January. Senate President Warren Petersen (R-Gilbert) does not plan to change the controversial confirmation process and urged the Governor to find nominees that will make it through the Senate’s rigorous evaluation for partisanship and performance of the nominees.

Governor Hobbs and other Democrats also have a broader goal in mind: They hope to alter the political dynamics in the Senate by reducing the number of seats held by Republicans.

State Budget: Fiscal Year 2024 Ends with Good News

As the state calculates the final details of the last fiscal year, which ended June 30, there’s good news for the budget that started July 1: The state’s General Fund collected more than expected. State budget offices are still calculating the final expenses, but Fiscal Year 2025 began with as much as $412 million above economists’ forecasts.

Throughout Fiscal Year 2024, the state’s main revenue streams often differed from predictions:

• Sales taxes grew slightly over the year, growing by a total of 3.3%. That’s the slowest growth rate since 2016, reflective of slowed spending nationwide, but it still brought in $49 million more than expected. Contracting activities helped drive the sales tax growth, climbing more than 12% to mark the seventh consecutive year of double-digit increases in this category.
• Individual income taxes were down 7.5%, but that was $156 million higher than expected – largely because economists weren’t sure what to expect as the state implemented the final phase of its income tax rate reduction.
• Corporate income taxes declined by 4.3% compared to 2023, but that decrease was less than expected and comparable to many other states. The tax still generated $92 million more than economists forecast.
• Insurance premium taxes were $51 million higher than expected, largely due to increases in insurance premiums last year. AHCCCS enrollment did not decline as much as economists expected after the COVID-19 pandemic, which also impacted the insurance premium tax revenue.

Legislative economists warn that much of the excess revenue is one-time rather than recurring, but it still provides much-needed optimism after a notable budget deficit last year.

In the Elections

The Secretary of State certified that the Arizona Abortion Access Act has enough signatures to go to the ballot – it will be Proposition 139. Arizona has a dramatic way to decide a tie in some elections. Maricopa County settled a lawsuit related to voting machines. There’s a new effort to combat abortion advocates’ campaign to remove Arizona Supreme Court Justice Clint Bolick. Details matter when you vote. After his retirement from the Maricopa County Board of Supervisors, Bill Gates will head a new effort to train election workers.

In the Courts

An appeals court reversed an earlier ruling on proof of citizenship for Arizona voters, but Republican lawmakers appealed the decision to the U.S. Supreme Court. The Arizona Supreme Court further delayed enforcement of the state’s abortion ban. A Maricopa County judge said the state’s Election Procedures Manual violates free speech rights; Secretary of State Adrian Fontes

(D) plans to appeal the ruling ahead of the General Election.

In the News

Dr. Eric Meyer (D-Phoenix) is back in the legislature for a few months. The University of Arizona has a new President. The Arizona Board of Regents has a new member and a new Executive Director. Arizona schools almost lost school improvement grant funding – the Joint Legislative Audit Committee and the Governor want Superintendent of Public Instruction Tom Horne (R) to answer questions about it. A school board opened an outside investigation into sexual harassment claims against Rep. Elda Luna-Nájera (D-Phoenix). Governor Hobbs joined with New Mexico’s Governor Lujan Grisham to urge action to improve the regional power grid. Senator Wendy Rogers (R-Flagstaff) is back in the headlines. The casita conversation is already happening in some areas of the state.

Brought to us by Pinnacle Public Affairs, LLC