Arizona cities and towns want a civil dialogue with state legislators, but at least two laws proposed by Arizona Sen. Steve Pierce [R-District 1] alarm local leaders, who plan to meet the senator to discuss state budget issues Monday, Feb. 7.
Clarkdale Mayor Doug Von Gausig, who also serves as vice president of the League of Arizona Cities and Towns, said communication with legislators is much improved since the league passed a resolution encouraging collaboration with the governor and Legislature to resolve budget issues.
However, Senate Bills 2020 and 2021, proposed by Pierce, could so fundamentally alter funding for municipal services, local leaders hope to persuade the senator his legislative goals can be accomplished without the legislation he supports, Von Gausig said.
The league’s formal analysis is not completed, but both proposals could wreak havoc with the way cities and towns pay for roads, parks, recreation and other services, said Cottonwood Mayor Diane Joens, a league member.
Senate Bill 2020 would freeze state revenue sharing for 20 years, denying cities and towns a portion of the income tax collected on their behalf by the state.
Revenue sharing came about as a way to discourage cities and towns from imposing municipal income tax. Instead of imposing their own income tax, Arizona cities and towns are given a share of income tax collected by the state, Von Gausig said. The proposal would deny municipalities their share of any increase in income tax collected by the state through 2040, he said.
“I don’t know if he really understands what the impact will be,” Von Gausig said. “We’re trying to quantify what the impact might be on services we render and products we provide the public.”
Senate Bill 2021 would limit the type of taxes a city may collect to those imposed by the state. For example, if the law passed, Cottonwood and Clarkdale would no longer be allowed to tax rental income, as they presently do, because the state does not tax rental income, Von Gausig and Joens said.
“That bill is a huge concern,” Joens said. “It would eliminate the ability of cities and towns to respond to local issues. It would force a one-size-fits-all approach for the entire state. Citizens who live in Verde Valley communities have lots of different ideas about how they want to live their lives. The state seems to feel they know that better than local people. I don’t understand that.”
Both Joens and Von Gausig said the actual impact of the law in terms of dollars has not yet been determined. Neither of Pierce’s proposals is contained in the governor’s proposed budget, Von Gausig said.
The league’s new approach to communicating with the Legislature is less adversarial. It has made a positive change in the relationship. A two-hour lunch meeting between league officials and state legislators in January was dominated by talk about how to collaborate, Von Gausig said.
“People on the league like the new philosophy and are committed to it and the Legislature really appreciates it too,” Von Gausig said. “It’s not a panacea, but the communication is a lot better than it was.”