John --
Welcome to another stay-at-home update. I hope all of you are staying safe and healthy and practicing plenty of social distancing.
If you were celebrating, I hope you had a Happy Easter yesterday. Not the usual Easter celebration that we are used to of course, but I hope you got to spend some time with family, either in person or through technology.
I recorded my weekly video update this morning from my home office. You can watch the video on my Facebook page here <[link removed]>.
Today is April 13th, which when we recessed our legislative session a few weeks ago, was supposed to be our return date at the capitol. That isn’t happening, and while we have not received an official return date from legislative leadership, everything I am hearing points to early May at the absolute earliest, with later in the month a more likely possibility.
There are many hundreds of bills still stuck in the legislative process of course, but our most important priority right now is protecting our constituents and focusing specifically on any relief measures we can implement at the state level for either individuals or businesses.
Most of the financial programs you may have heard about, like unemployment benefits or the small business loan program are being handled and funded at the federal level. We have been receiving a lot of emails and calls about the CARES Act, which includes a provision to allocate $350 billion in loans to small businesses to help pay employees. I have personally been reaching out banks and community lenders in the hopes of speeding up approvals, so if you or someone you know is having difficulty getting an approval, please let me know and I will try to help as much as I can.
At the state level, we’ve approved $105 million in aid that the governor can allocate at his discretion. So while our session is in recess, our focus is connecting constituents with resources and answering questions that they may have about where to go to apply for federal programs.
One of our concerns these last couple of weeks has been our state revenue outlook, and we received our first briefing last week on the initial estimates for revenue projections going forward. Suffice to say, they are not good.
Earlier this year our revenue forecasts estimated a roughly $1 billion budget surplus. Now, with the impact of the coronavirus, we are potentially looking at a $1 billion budget deficit.
Why, you ask? Well, our state revenue is very reliant on two buckets: our state income tax and our state sales tax. Each accounts for about forty percent of our total state revenue. In a downturn, as we saw during the last recession, income tax dollars go down because people either lose their jobs or are furloughed, and people buy fewer things, which means we collect less sales tax. This also has a big impact on city and county government as well, who also collect a portion of sales tax revenue as well.
So looking ahead, the state is forecasting that we will collect far less revenue in both categories. The initial estimates are very speculative, and will change over time as we collect more data on jobs numbers, unemployment benefit claims, Medicaid numbers, and cases of COVID-19. Our state budget analysts are recommending that we don’t make any sweeping policy changes, like budget cuts, just yet.
There is also a possibility that a future Congressional relief package would include dollars to help state budgets. An important point: unlike at the federal level, where Congress can print money and add to the budget deficit if they choose to, we can’t do that at the state level. We have to balance our budget every year, and with revenue numbers falling off a cliff, which means we are going to be faced with some difficult choices over the next couple of months. With about half of our state budget dedicated to K-12 education, in a state where we already rank 48th in per-pupil funding, that means potential cuts there or to programs like AHCCCS, our universities, our prison system, infrastructure, and so on.
When we do return to the capitol, whenever that may be, it will likely exclusively focus on additional relief measures for this crisis, and any changes we have to make to the 2020-21 budget we just passed last month. That budget goes into effect July 1st, so we have about two and a half months to make changes if necessary.
On the COVID-19 front, the Arizona Department of Health Services (DHS) has thankfully updated their dashboard that contains information on the number of cases throughout the state. It now contains updated information for the number of cases by zip code. You can find the map here: [link removed]
On a local level, here is the number of cases for the zip codes in Legislative District 18, as of this morning:
85044: 15
85045: 6-10
85048: 24
85202: 29
85224: 43
85226: 16
85282: 21
85283: 14
85284: 1-5
When you look at the map, some zip codes, like 85224 in Chandler, cover a much large geographical area than others, like 85045 in Ahwatukee.
HELP FOR SMALL BUSINESSES
A concern I’ve heard from a number of small businesses in recent days, particularly restaurants, has been the collection of sales tax revenue, and our state Department of Revenue’s continuing policy of charging late fees and interest charges for businesses struggling to make payments. While these businesses are waiting for federal relief from the CARES Act, one of the policy levers we could implement at the state level is to add some flexibility for these payments, in the form of payment plans or deferrals until businesses can pay.
This would allow them the flexibility they need to continue paying their employees, operating take out service for their customers, and reduce the number of businesses going under. It’s the right thing to do, and my colleagues and I will be pushing for the governor and the Department of Revenue to make these changes in the coming days.
ADDITIONAL RESOURCES
A reminder that the state’s one stop shop for relief measures, including information about unemployment benefits, housing assistance, Medicaid, and more, can be found at: [link removed]
The Arizona Department of Health Services (DHS) website has a site that is being updated daily with information on the number of cases, including by ZIP code: [link removed]
The Arizona Department of Economic Security (DES), which covers SNAP benefits, unemployment benefits, and other forms of economic assistance, has a resource page here: [link removed]
If you or someone you know needs assistance from a local food bank, you can find a directory of resources here: [link removed]
Our Arizona 211 hotline is back up and running and is a great resource. [link removed]
In addition to sheltering in place and practicing social distancing, I hope you are all connecting virtually with family and friends, and taking walks and hikes when you can. I’m continuing to go on walks at least once a day, and on hikes at least once or twice a week.
I miss the capitol, and I miss being at work and seeing colleagues, staff, and constituents. We are all in this together, and looking at the data, it appears that social distancing is having an impact on the case numbers not just in Arizona, but across the country. A few more weeks of this, and hopefully the curve will start to flatten once and for all.
My best to you and your family, and if I can ever be of assistance, please do not hesitate to reach out.
Sean
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Sean Bowie for State Senate - PO Box 50802, Phoenix, AZ 85076, United States
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