Next week marks the beginning of the 54th Legislature, when the political machinery of the House and Senate will wheeze and start with a jolt. A larger coalition of Democratic legislators is joining the House. There are already fault lines among Republicans on taxes. Meanwhile, time-sensitive issues such as a drought contingency plan are careening at lawmakers.
How the session will play out depends on how skillfully lawmakers navigate the new political terrain. The Republican choice for House Speaker is Rusty Bowers, an enigmatic lawmaker from Mesa who also happens to be a professional artist and sculptor. The new Senate President is Karen Fann, a former House member who previously served as mayor of Chino Valley.
Unpredictable events or themes are certain to arise, too. See the #RedForEd revolt last spring, which resulted in the first-ever Arizona teachers' strike and thousands of educators storming the Capitol grounds, and a late-night education budget that gave teachers a pay boost.
Will politicians set Arizona's future aflame with some bone-headed idea or a brazenly unconstitutional scheme? Possibly. But if you want to prevent that from happening, you'll need to make your voice heard on the topics that may drive this year's session.
Blue wave effect?
Looming over all these issues is the narrow Republican margin of control in the House. The Republicans lost seats in the House, reducing their margin from 35 during the last session to just 31. This 31-29 split between Republicans and Democrats means that one GOP dissenting voice can make life difficult for the majority.
“Before, they could have several defectors and still be okay," local Republican pollster Mike Noble said. "And so now with it being far tighter than years past, absolutely [Democrats] will have more leverage.”
Marilyn Rodriguez, a progressive lobbyist with the firm Creosote Partners, suggested that the opportunity for Republican bills passed in the "dark of night" with little input from the Democratic side has been diminished. The tight margin may make the House a legislative goalie, reducing the number of bills that end up on Ducey's desk.
“Because of the closeness in the House, based on the fractures that you see within the majority caucus, you’re probably just going to have to see more bipartisan approval of legislation in order for it to have a chance of making it to the governor’s desk," she said.
Despite their efforts in several competitive districts, Democrats were unable to claw back the State Senate, so the 54th Legislature will be a continuation of last year's 17-13 Senate split.
Water fight
At the start of the session, lawmakers will immediately face the crucial decision on the drought plan for Colorado River water.
After months of painstaking negotiations by the Drought Contingency Plan Steering Committee (covered extensively by Phoenix New Times), the board of the Central Arizona Project canal has approved a plan that spells out how Arizona will apportion a reduced supply of Colorado River water under an all-too-likely drought scenario.
The Legislature and governor need to sign off on the plan, but they have very little time: The federal Bureau of Reclamation has set a Thursday, January 31, deadline for Arizona and other Colorado Basin states to get their drought plans in order.
As a result, lawmakers have just weeks to learn the details of a highly technical plan specifying how cities, tribes, and farmers will adjust to a reduction of 512,000 acre-feet in the amount of water Arizona gets from the Colorado River and Lake Mead in the event of a shortage that could begin in 2020.
Complicating the situation even more was the recent dispute over who should sign the interstate drought plan on behalf of Arizona after it is approved by the Legislature. In all likelihood, the signer will be the director of the Arizona Department of Water Resources, but the board of the Central Arizona Project had pushed for the right to co-sign the plan, before seemingly backing off.
A spokesperson for Ducey said that water is the governor's top priority during the new legislative session, but could not say immediately which individual (or individuals) will sign the interstate agreement.
Governor Doug Ducey and the CAP board have each pledged $5 million to help compensate Pinal County farmers through the development of groundwater infrastructure. The farmers are poised to receive less Colorado River water in a drought scenario, and their representatives recently released a study they commissioned showing their economic power.
Even as the Legislature hurtles toward the federal deadline, Bowers told public radio station KJZZ late last month that he doesn't want to rush the drought plan through the House. “There are things that everybody wants. But most of all everybody just wants a plan. And I think it’s almost like, we’re being panic-driven,” Bowers told KJZZ. “This is not a panic. There’s water available.”
Arizona's Trump tax
Another immediate problem facing the Legislature is what to do about a tax question that's divided Arizona Republicans.
The Republican tax cut passed by Congress and signed by President Trump in December 2017 was sold to voters as a shot of adrenaline straight into the heart of the economy. Now, however, Arizona legislators face a tax quandary because of the law, a dilemma which has also created a fault line between some Republicans and the governor.
Arizona hews to tax conformity, the idea that Arizona's tax code should match what happens at the federal level. In simple terms, Trump's tax cut reduced the number of deductions available to individual taxpayers, so if Arizona conforms state taxes to identically match the federal code, the amount paid by individual Arizonans will actually go up under the law. The Joint Legislative Budget Committee estimates that conformity could add $184 million in new revenue to state coffers during the 2020 fiscal year.
Like the DCP deadline, tax conformity has a time-pressure component. Pretty soon, Arizona residents will prepare to file their taxes for 2018, and the Arizona Department of Revenue needs time to prepare its forms.
Ducey has supported stuffing the millions of dollars in new revenue into Arizona's "rainy day fund," as reported by Capitol Media Services. This has prompted grumblings from legislators, such as outgoing House Speaker and State Senator-elect J.D. Mesnard, who would like to offset the financial bite for taxpayers somehow, possibly by reducing income tax rates.
Ducey's office emphasized that the governor is willing to work with lawmakers, and his support for moving the increased revenue to the rainy day fund "doesn’t take tax reform off the table," spokesman Patrick Ptak said.
"This is a one-time solution we’re putting forward for tax year 2018," Ptak said. "And the focus here is to give taxpayers certainty as they prepare their taxes for tax year 2018.”
The governor did not call for a special session for lame-duck legislators to resolve the tax conformity question. But Ptak sounded optimistic when asked about the tight timeline hanging over state government on both water and tax conformity.
"We have an urgency to address both these issues when the Legislature meets later this month and we’ll be working with the Legislature quickly to come to a solution," Ptak said.
Vehicle fee hike
The new tax scuffle comes as Ducey is already facing Republican resistance on another tax issue — the vehicle license-renewal registration fee authorized by the Legislature last year. The annual fee, which Ducey has avoided calling a tax, was designed to pay for the highway patrol and estimated to cost around $18 per vehicle. Only later did legislators learn the fee would cost drivers $32 when it was set by the director of the Department of Transportation.
The first bill filed for the new session was a repeal of the fee.
Despite a tax controversy on two fronts, Noble suggested that the governor has shown himself to be a canny negotiator before. "It seems like the governor’s done a really good job when it comes to finding solutions and also getting everybody on board to move things forward," he said.
Charter reform, maybe
Between the mismanagement and abrupt charter school closures, the controversial Turkish religious network tied to schools lauded by Ducey, and the massive multimillion-dollar payout to legislator Eddie Farnsworth after he converted his charter network to a nonprofit, Arizona's charter school sector finally may have reached the point where lawmakers are willing to approve more oversight.
Re-elected State Senator Kate Brophy McGee, a moderate Republican, and Attorney General Mark Brnovich both have expressed support for reform of Arizona's laissez-faire charter school sector.
When asked about the potential for reform last month, Ducey's office suggested that the governor is on board with improved charter school accountability for parents, teachers, students, and taxpayers. The governor is working with the state charter board, the charter association and individual charter-holders on reform, Ptak said.
"The Governor also wants greater transparency and accountability related to charter school procurement, particularly in related party transactions, and increased regulatory authority for the Charter Board to provide more oversight and technical support in the area of financial compliance," Ptak wrote in an email in December.
Education debate, Arizona-style
On the heels of the teachers' strike last spring, expect education and the state budget to be hotly debated subjects this session. In response to the threat of a walkout before the actual walkout, Ducey delivered a 20 percent teacher pay increase to take effect over three years. But #RedForEd leaders are ready to demand more, arguing that a hole amounting to hundreds of millions of dollars in the education budget has never been fully restored since the 2008 recession.
The only solution to funding is another statewide strike. We cannot continue to compromise our demand for adequate school funding.
— Dylan Wegela (@DylanWegela) December 17, 2018
Likewise, Republican lawmakers are still bitter about the weeklong walkout. Several bills characterized as retribution for the #RedForEd movement are already in the legislative hopper, aiming to stamp out any hint of political advocacy in public schools – something that is already illegal.
Representative Kelly Townsend, a committed #RedForEd opponent, has proposed giving Arizona legislators the ability to individually initiate an investigation by the Arizona Attorney General into school employees. Another bill from Townsend seeks to prevent school districts and charters from shutting their doors except in the event of a major disaster like a plague, wildfire, or "an act of God."
A bill sponsored by Representative Mark Finchem, which he adopted from a far-right campaign hoping to raise alarm about supposed leftist indoctrination in schools, would create a educator code of ethics barring teachers from engaging in political speech in the classroom or teaching controversial issues through a partisan lens.
This doesn't mean that the teachers who wore red to the Capitol last time are going to stay home this session, chastened. Aftershocks from the #RedForEd groundswell last spring will probably bring back the engaged teacher-activists who made the passage of an education spending bill an all-night affair at the end of the strike last May.
"I keep hearing from teachers from the #RedForEd movement who have already made plans to camp out on budget night," Rodriguez said. "They are gonna fill the galleries and sit there and watch the budget process again."
Josselyn Berry, the executive director of liberal action group ProgressNow Arizona, said that she has spoken with teachers who have a new enthusiasm for tracking policy after watching their legislators debate the budget or speak in committee.
"The #RedForEd movement really brought to the forefront the idea that you can go down to the state Legislature and talk to legislators and sit in committee hearings and sit in the gallery," Berry said.
A lot of people don't realize that they can go to the Capitol to participate, Berry said. People should feel free to explore it, she said, "because it is our State Capitol."
