John --



Good morning, and welcome to our latest weekly update from the state capitol! It’s Week 21!



This is my fifth year at the state capitol, and in none of my previous legislative sessions were we ever in session in the month of June. Yet here we are, June 8th, still in session and no clear plan about what will happen with the state budget.



Have I mentioned that we have a deadline of June 30th to pass a budget? The budget we ultimately pass goes into effect July 1st. That’s less than a month away.



The Senate was not in session last week, but I was in the office on Tuesday, Wednesday, and Thursday. On those days I was catching up on email, cleaning up the office, and going over ideas and plans for an alternative budget proposal that I think could garner bipartisan support and get us across the finish line.



We are still tentatively set to come back to the Senate this Thursday, but we have not received confirmation of that as of yet. Even if we do come back, there does not appear to be a plan to vote on a budget that has the necessary sixteen votes for passage.



The House was back in session yesterday, however, set to debate and vote on budget bills that were doomed to fail. If you’ve been reading my updates over the last couple of weeks, you would have known this already!



The House debated two budget bills, and each budget bill failed by a vote of 30-30. One Republican house member, along with every Democratic house member, voted down the flat tax plan that legislative leadership and the governor so desperately want. Again, we knew this was going to happen, but they insisted on bringing all the House members back to the capitol.



It’s like running into a brick wall, with some hope that maybe the wall will disappear before you run into it. Several of my Republican colleagues have very reasonable, passionate, solid reasons for opposing the flat tax proposal, and they are not going to be bullied.



So after two bills failed to pass, the House adjourned until Thursday, which is the same day that we may end up coming back. To do what, exactly? Who knows.



I want to point you to something I typed in a previous update I sent you. These words went out on May 11th, almost a month ago:



“But as long as a block of legislators insist on a massive tax cut that would harm our cities and towns, and not benefit all Arizonans equally, we’re going to be in session for a while. The sooner they realize the tax plan they want doesn’t have the votes, the sooner session will end.”



I wrote those words almost a month ago, and they still hold true today. Legislative leaders still may not realize their tax plan doesn’t have the votes to pass, and won’t ever have the votes to pass, but they don’t appear to be there yet.



So what happens now? As always, I am hard at work seeking ways to bring my colleagues together on a budget that has the necessary votes to pass and is actually good for the state. A bipartisan budget that puts ALL Arizonans first and makes critically important investments in our future while also including tax reform and paying off some of our state’s sizable debt portfolio.



In case you missed it, one of my Republican colleagues and I wrote a joint op-ed in the Arizona Capitol Times about the need for a modest, responsible state budget that aligns with the priorities I mentioned in the previous paragraph. You can read the op-ed here <[link removed]>.



So what does that kind of budget look like? And what kind of budget am I working on with my Republican and Democratic colleagues on advancing as an alternative to the current proposal?



I like to think of this budget as having three parts: tax reform, paying off state debt, and investments. Here’s what each would look like:



-Tax reform. The current proposal of a $1.9 billion ongoing flat tax is a complete non-starter. It’s too much revenue loss with too much uncertainty about future revenues and the impact the revenue loss would have on future budget cycles.



A combination of a much smaller ongoing tax cut (around $400 million), along with a one-time rebate check for lower-income Arizonans would be a dramatic improvement. We could issue one-time rebate checks to Arizonans making $50,000 or less a year with some of the one-time federal dollars we have. It would put money back in Arizonans’ pockets and not tie us to a long-term cost.



I would also like to see my bill from earlier this year to create an Earned Income Tax Credit (EITC) be included in the budget as well. It would be direct relief for working Arizona families, and it would only cost $75 million a year.



-Paying off state debt. The current budget proposal has some good elements in it relating to debt reduction, but we can definitely do more, especially with some of the one-time federal dollars we have. I would prioritize paying more of our pension obligations down, since the savings from those payments materialize quicker than other debt reduction.



And we should strongly consider starting to pay off our K-12 rollover debt of $930 million. The sooner we can pay that off, the stronger fiscal position we are in when the next downturn comes and we may be forced to use this accounting gimmick once again to help stave off devastating cuts to areas like K-12 schools or higher education.



-Investments. Any budget that hopes to attract bipartisan support will need to consider additional investments in several critical areas, like higher education, our K-12 schools, our state’s Housing Trust Fund, and KidsCare.



As always, I will be working the phones and the hallways the next several weeks to put together a budget that can pass. I hope we can get there, because about $13 billion of state revenue is counting on it. Not to mention our constituents, who want us to work together to solve these problems and produce a budget that puts all Arizonans first, not just a select few.



Continue to follow my social media feeds for updates throughout the week! And I fully expect us to be in session again next week, so look forward to another update from me next Tuesday.



Thank you,



Sean





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Sean Bowie for State Senate - PO Box 50802, Phoenix, AZ 85076, United States

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