2019 State Legislative Wrap Up
In the early hours of May 28, 2019, the 54th, 1st Regular Arizona State Legislative Session adjourned Sine Die after 135 days of session. This legislative session, a total of 1,318 bills were introduced and 331 were passed by the legislature. As of May 28, 2019, 256 of those bills were signed by the governor, seven were vetoed and 68 bills await action. The governor now has ten days to either sign into law, allow for the bills to become law without his signature or veto the remaining bills on his desk. All legislation unless otherwise specified will become effective on August 27, 2019.
One of the last items tackled by the legislature before adjourning was the passage of $11.8 billion-dollar Fiscal Year (FY) 2020 budget. As REALTORS® there are a few key areas of the budget that directly impact our industry. To be expected, the Arizona Department of Real Estate was appropriated 37 Full Time Employees and a lump sum appropriation of $2,911,700 from the state general fund.
Of other interest to our industry, the Arizona Department of Housing has been appropriated three Full Time Employees and an operating lump sum appropriation of $322,200. Of utmost significance to this area of the budget was the $15 million-dollar appropriation (up from the original proposal of $10 million) to the Housing Trust Fund. Of the $15 million, $3,500,000 million shall be spent on constructing or renovating facilities and on housing assistance, including support services for people who have been determined to be seriously mentally ill or chronically resistant to treatment. On a historical note, the State Housing Trust Fund was established in 1988 by the legislature to provide a flexible funding source to assist in meeting the housing needs of low-income families in Arizona.
Recap of Fiscal Year 2020 Budget:
Teacher pay and restoration of additional assistance: Continues the implementation of the average statewide teacher pay raise of 20 percent by school year 2020 ($165 million) and accelerates restoration of District and Charter Additional Assistance with $136 million.
K-12: Increases Result Based Funding by $30 million for a total of $68 million ongoing with the funding model directing more dollars to high-achieving, high-poverty schools.
CTE (Career and Technical Education): Phases in a $10 million bonus program for schools producing high-school graduates with industry certifications in hand.
Universities and community colleges: Increases funding to state universities distributed based on student population. Community colleges funded for coursework in allied health profession training ($5.8 million) and aerospace industry coursework ($15 million).
Moves the state from the current five brackets to four brackets and lowers the top rate from 4.54% to 4.5%. Aligns the state’s standard deduction with the federal standard deduction. The reform takes single taxpayers to $12,000 and married couples to $24,000.
The budget includes $130 million in Interstate 17 improvement dollars. The bill phases out the 2019 Highway Safety Fee ($32 dollars annually per registered vehicle) over two years.
The budget contains a $1.6 million revision to KidsCare enrollment to ensure the ongoing strength of the program with coverage for approximately 6,000 children.
Rainy Day Fund and Debt:
The budget will result in a $542 million deposit into the rainy-day fund, bringing the balance to $1 billion (a top priority of Governor Doug Ducey). The budget also pays off $190 million in recession-era debt.
Overall, the Fiscal Year 2020 spending plan ensures that Arizona remains competitive, attractive to job creation and prepares for our state’s future. The governor achieved many of his top priorities in the approved budget and it is anticipated that he will sign it into law.