AZ Legislative Update 10-08-2021

As legislators prepare for the 2022 legislative session, the fate of some bills enacted earlier this year is still uncertain. After a Maricopa County Superior Court ruling blocked some high-profile policies in the state budget from becoming law, the Arizona Supreme Court said it will consider whether the legislature needs to change how it enacts a state budget – and whether the state’s limits on COVID-19 mitigations can go into effect. Those provisions are still on hold, though: Until it considers the challenge to the state’s budget tactics, the Supreme Court opted not to reinstate the laws.

The income tax cut enacted in the state budget could also face some extra hurdles, after advocacy groups collected signatures on a referendum that would ask voters whether or not to enact the new tax cut. The Secretary of State is verifying that the effort has enough valid voter signatures, and supporters of the tax cut are asking the courts to decide that citizens cannot overturn the legislature’s action on taxes. If the measure withstands those challenges, it will go to voters on the November 2022 ballot.

Organized efforts to refer a variety of other election and tax laws to voters did not collect enough signatures to advance. 

U.S. Treasury Opposes Arizona Use of COVID-19 Aid Funding

The U.S. Department of Treasury has concerns about Arizona’s use of federal COVID-19 aid funds and warned Governor Ducey that two new programs violate the intent of the funding. The Governor used resources from the Coronavirus State and Local Fiscal Recovery Funds to establish a grant program for schools that do not implement mask mandates and a voucher program that provides financial assistance to families of students who want to enroll in a new school because their current school requires face masks. There has been a high demand for the Governor’s programs.

The Treasury says the programs do not fit with the purpose of the funding, though, and asked the state to describe how it will alter them to mitigate fiscal effects stemming from COVID-19 and stop the spread of the virus. If the state doesn’t align with the federal government’s interpretation of the funding guidelines, it could have to repay the $173 million allocated to the two programs.

The Governor doesn’t intend to respond to the question, and on Thursday he said the federal government can sue if it wants to try to take back the funding he prioritized for school choice programs. He also plans to allocate additional funding to the programs that concern the Treasury.

Resignations, Changes Continue at the Legislature

The unusual upheaval in legislative membership continues, and three county boards of supervisors must act before the House and Senate vacancies are filled. This week, the Pima County Board of Supervisors delayed a vote on a replacement for former Senator Kirsten Engel (D-Tucson), who resigned a month ago to focus on her run for Congress. The Board was divided in support for three Democratic candidates: Current Representative Stephanie Stahl-Hamilton, former lawmaker Tom Chabin, and former Marine Larry Waggoner, and rescheduled their selection to October 19.

Pima County leaders will have another seat to fill soon: Dr. Randy Friese (D-Tucson) announced that he would leave the legislature next month to return to his medical practice. He ended his campaign for Congress early last month.

The Pinal County Board of Supervisors will appoint a new House member soon to fill the seat of former Representative Frank Pratt (R-Casa Grande), who recently passed away, and former Representative Bret Roberts (R-Maricopa), who resident to move out of state.

This week, the Maricopa County Board of Supervisors appointed a panel to nominate three candidates to fill the House seat that is empty because Raquel Terán (D-Phoenix) left the House to fill former lawmaker Tony Navarrete’s Senate seat. Teran was sworn into her new Senate role this week.

More legislators are expected to resign prior to the next legislative session as they pursue election to a higher office next year.

Senate Ballot Review Confirms 2020 Election Outcome

The Cyber Ninjas finally presented their review of Maricopa County 2020 ballots at the state Capitol, confirming the results of the election and announcing they did not find the fraud some sought. The leaders of the recount presented items that caused them concern, but Maricopa County said the presentation highlighted the participants’ ignorance rather than problems with the system.

This is not the end of the efforts to review the 2020 election in Arizona or around the country. The courts’ effort to enforce a ruling that requires the Senate and its partners to turn over more records about the ballot recount continues, and some – but not all – of the key players in the Senate’s efforts testified in Congress this week.
 
At the request of Senate President Karen Fann (R-Prescott), Arizona Attorney General Mark Brnovitch opened an investigation into specific parts of the Cyber Ninjas’ report. Fann pledged to pursue legislative changes to election processes, but the discussion will have to wait until next year: Governor Ducey said he’s not interested in a special legislative session on the topic.

The Senate’s efforts continue to influence the discussions that will take place during the 2022 legislative session. This week, Senator Michelle Ugenti-Rita resigned from her role as Chair of the Senate Government Committee – a key part of the decision-making about election laws. Her decision is likely connected to internal disagreement within the Senate Republican caucus: Ugenti-Rita has been a vocal critic of Senate leaders and their ballot recount.
 

Budget Update: State Agencies Publish Their Wish Lists

State agencies sent Governor Ducey their budget wish lists earlier this month, outlining their needs and the priorities they hope to have included in the budget proposal the Governor will publish early next year.

The Arizona Health Care Cost Containment System (AHCCCS) requested a total of $358.3 million in new state funding for the entities that provide care to AHCCCS members. This budget request reflects increased enrollment because of the pandemic, which continues to grow because federal policies have limited the agency’s ability to remove coverage for members who get new jobs or otherwise do not qualify any longer. Enrollment – and higher federal payments for AHCCCS – are expected to decrease as the system readjusts after the pandemic.

AHCCCS also hopes to receive $1.5 million in new state funding for a variety of policy priorities:

• Additional staff to provide care to those designated as Seriously Mentally Ill through the American Indian Health Program;
• IT expertise to help comply with the federal government’s standards for patient access to their health data;
• An installment payment toward replacing the agency’s data management system;
• Higher software licensing fees; and
• Increased costs associated with meeting the minimum wage for employees in Flagstaff.

Federal funding will provide a temporary increase in funding for the state’s home and community-based services, and AHCCCS will join the Department of Economic Security’s Division of Developmental Disabilities to ask the legislature for authority to spend more than $237 million for those priorities.

Like other state agencies, AHCCCS outlines plans to implement a compensation adjustment for its employees. There are no estimates about how that change would impact their budget request.
 

In the Elections

The Arizona Independent Redistricting Commission started the important work of shaping the state’s new legislative and Congressional district maps. State Senator Martín Quezada (D-Phoenix) joined the race for State Treasurer and Representative Michelle Udall (R-Mesa) wants to be the next Superintendent of Public Instruction.

Click here for a full list of candidates running in 2022 as a member of a political party, and click here for a list of candidates who are unaffiliated with a political party. 

In the Courts

The Governor asked a court to throw out a lawsuit challenging his cut to unemployment benefits. A federal judge ruled against some – but not all – of Arizona’s new abortion law, but Arizona Attorney General Mark Brnovitch wants to enforce that law while he appeals the ruling. A Maricopa County Superior Court judge is considering whether it is illegal for the legislature to fine the City of Flagstaff for its minimum wage law. The Arizona Supreme Court is considering a case with big implications for political speech.

In the News

The Massage Therapy Board has new members. The Arizona Auditor General has some advice for state entities that oversee sex offenders, tourism, school facilities, and groundwater. Daniel Ruiz, the Governor’s new Chief of Staff, has deep ties to Arizona. The legislature’s talking about forest health. State Representative Jennifer Longdon (D-Phoenix) is part of the CDC’s expanded effort to understand the impacts of gun violence. Unemployment insurance fraud cost the state’s Department of Economic Security. Governor Ducey joined other Republican governors at the border. The Arizona Department of Real Estate has a new director. Arizona took a step toward cybersecurity.