[{"_1":2,"_112":-5,"_113":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76,88,100],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6103558,"mediaKeyId","2794339-6e78ced7851b84bdef6f7aca8f45a686","parentId",2794339,"title","Committee backs plan to cut income tax rate by formula tied to structural surplus; critics warn of long‑term risks","audioSeconds",2827,"startMs",2759135,"endMs",5586810,"viewUrl","/Search/View?dp=1&key=2794339-6e78ced7851b84bdef6f7aca8f45a686&start=2759&end=5586","thumbnailUrl","https://assets.pipeline.soar.com/2794339-6e78ced7851b84bdef6f7aca8f45a686/thumbnail_2759135.jpg","articleUrl","/articles/6103558/Arizona/Committee-backs-plan-to-cut-income-tax-rate-by-formula-tied-to-structural-surplus-critics-warn-of-longterm-risks","mediaUrl","https://secure.pipeline.soar.com/6103558-425fddb81d2627ef1ce18d61e96f0af7/orig.mp4?Expires=1771163026&Signature=fcrYzzeSStSdveKIMrJ8NheYoq0zp1r4voSctvQd1~dN5-rWjrSexF1lJINwe1as9g-3ER1qKtMFRGjaEa3rWmB8tn7B18QW7s~2n59eqaFSkuiuVXpb-Dh2X76mdCwoHbaV5x-4DkaqQOdXMpoetwR~LbvZTWYB3UcUjsheqon9cQbp0chL3NLoMJNyzHpzDR7h22zObV0OBWJarrKUcQhVHFfBehSbN9TPeUEJWSLqTMa7S7~P~eDHVqQ7Bs50SQ06ZOdHdGDI4yQz4s94~I3rXxQ8dFlXJYBPqD7WjXIuTqWoxPMLFO5Yql1q~qxK6DpdaRTgdJVuGK2JBEul2A__&Key-Pair-Id=KUT5TJCACFTXG","author","Arizona Legislature","date","2025-03-26T00:00:00Z","article","The House Ways and Means Committee advanced two related measures — Senate Bill 1318 and Senate Concurrent Resolution 1014 — that would require the state to reduce the individual income‑tax rate by 50% of a defined “structural surplus” beginning in taxable year 2026 (SB 1318) or taxable year 2028 if approved by voters (SCR 1014). The committee returned both measures with due‑pass recommendations.

Sponsor Senator Mesnard framed the plan as a predictable, formulaic approach to return part of structural surpluses to taxpayers while dampening government growth in strong revenue years. He and other supporters said the proposal differs from Colorado’s Taxpayer Bill of Rights (TABOR) because it is narrower: it refunds half the structural surplus, uses a historical high watermark adjusted for population growth and inflation, and does not automatically ratchet down permanent spending in lean years.

Opponents warned the automatic trigger for rate reductions creates fiscal uncertainty and could leave state and local governments short after a downturn. Tom Savage of the League of Arizona Cities and Towns said automatic rate cuts would directly reduce the urban revenue sharing that funds municipal services and argued the legislature should make deliberate choices about tax reductions rather than rely on an automatic formula. Joseph Palomino of the Arizona Center for Economic Progress said income‑tax rate reductions disproportionately benefit higher‑income taxpayers and that the state already has statutory guardrails (including a reference to Arizona Constitution Article 9, Section 17) and a supermajority requirement for tax increases.

The committee heard detailed fiscal and policy questions: witnesses and members discussed the distinction between one‑time and ongoing surpluses, the relationship to the rainy‑day fund and the state stabilization account, and how the bill’s calculation is made in arrears (using realized revenues). The Department of Revenue told the committee it could not produce a precise fiscal estimate because the bill allows more organizations or taxpayers to qualify over time and the number of qualifying entities or taxpayers cannot be predicted.

Economic analysts told the committee that a permanent structural cut of the kind proposed would reduce general‑fund revenue over time; one estimate offered during testimony (an illustrative model, not an official JLBC estimate) suggested a reduction on the order of $1.4 billion if a rate cut from 2.5% to 2.0% were realized, with the top 1% receiving a far larger absolute tax cut than lower quintiles. Supporters said the bill’s design — returning only half of the structural surplus and not ratcheting down spending irrevocably — would provide guardrails that reduce the risk of the most extreme outcomes.

Committee action: SB 1318 was returned with a due‑pass recommendation (tally: yes 5, no 2, absent 2); SCR 1014 (the ballot referral version) was also returned with a due‑pass recommendation (tally: yes 5, no 2, absent 2). Sponsors and opponents said they expected continued debate during floor consideration and noted the measure would change state fiscal rules if enacted or approved by voters.","mediaType","Video","parentTitle","03/26/2025 - House Ways & Means #1 & #2","oneSentenceSummary","The House Ways and Means Committee returned Senate Bill 1318 and a companion ballot measure, SCR 1014, with due‑pass recommendations after a lengthy debate over a proposal to reduce Arizona’s individual income‑tax rate by half of a defined structural surplus.","taxTitle","2025 Legislature Arizona, Arizona","taxId",78572,"location","Arizona","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6103563,"House committee advances bill to clarify who qualifies for Arizona charitable tax credits amid foster-care group concerns",1468,3440,1472240,"/Search/View?dp=1&key=2794339-6e78ced7851b84bdef6f7aca8f45a686&start=3&end=1472","https://assets.pipeline.soar.com/2794339-6e78ced7851b84bdef6f7aca8f45a686/thumbnail_3440.jpg","/articles/6103563/Arizona/House-committee-advances-bill-to-clarify-who-qualifies-for-Arizona-charitable-tax-credits-amid-foster-care-group-concerns","https://secure.pipeline.soar.com/6103563-e72f26de3dac8cf587a6b26f0099faba/orig.mp4?Expires=1771163026&Signature=mLdSDmeg0PS-EwcWUft7GDTWfhgUfLeC17b3mQTF~VKwRiTpt4dgej1A4QrxW~RSCxHyD--yKpNLmOeQ69ZUOWg26CvYDvDbJeG7jjmdmd-Um-BUPyeVrhENt1hUKXb3M6D0KmTn2-cshIdqkEXaPGH~NlhTQRhE03NOQ2vQePhh37UyFlnH5gUAaXx9bk5qflhMECie35AvSEdpwmrl2qmJ05Z~krsebw98r~SHobP8yBnDZEZOfXW-Ln-M2w6Uvi3jTPJfttbqOW4PjXaB5pJtID4w8I9kyHxmrd35m4ptc0-7nFKyKb6Jh2-RHJIj3vtggn8KWYisqmSy0a-JLg__&Key-Pair-Id=KUT5TJCACFTXG","Senate Bill 1496, a proposal to revise the statute that defines services for Arizona’s qualifying charitable organizations (QCOs) and qualifying foster care charitable organizations (QFCOs), was returned by the House Ways and Means Committee with a due‑pass recommendation after a half‑hour of testimony and discussion.

The bill would create a single definition of “services” for both tax credits and add language that requires a qualifying charitable organization to “direct” at least 50% of its budget to certain state residents (recipients of Temporary Assistance for Needy Families, low‑income residents, or individuals with chronic illness or physical disability). Sponsor Senator Mesnard and stakeholders said the measure is intended to restore prior practice after recent Department of Revenue guidance narrowed who qualifies.

Committee members and witnesses said the goal is to preserve access to the credit for groups that have historically participated, while preventing an unintended expansion. Brandy Petrone of Arizona Impact for Good summarized the background: the Department of Revenue began work three years ago to standardize QCO guidance, and the finalized guidance last year left some organizations off the certified list. Petrone said the department gave stakeholders time to seek legislative fixes and the bill aims to prevent long‑standing organizations from losing eligibility under the new guidance.

Delta Dental Foundation testified that it has historically acted as a “pass‑through” or directed grants to local nonprofits and that the department’s clarified guidance now treats that practice as nonqualifying. Delta Dental representative Mark Osborne told the committee his foundation would have to change its operating model to provide services directly rather than fund other nonprofits; he said the intent of the bill is to preserve the foundation’s existing eligibility, not to expand the program.

Several QFCO representatives opposed the bill in its present form. Danica Robinson, president and co‑founder of ASA Now and a long‑time foster parent, testified “I am here today to testify against SB 14 96 in its current form.” Robinson said QFCOs are smaller, serve distinct needs of foster children and rely on targeted services for trauma‑informed care. She said the bill’s changes raise four principal concerns: (1) removal of minimum service thresholds that ensure organizations are serving significant numbers of foster children; (2) allowing umbrella organizations that collect and regrant donations to participate, which she said could dilute funds available to direct service providers; (3) expansion of the list of allowable services (behavioral health, education workforce development, housing and other items); and (4) an inconclusive fiscal note that does not analyze how many additional organizations might qualify or how the general fund would be affected. Robinson said there are 58 QFCOs and about 258 QCOs in Arizona and that taxpayers claimed $84 million in QCO credits in 2024.

Molly Murphy, representing the Department of Revenue, told the committee the finalized guidance led the department to determine that organizations that simply “direct” funds would not qualify under the guidance; the bill’s drafting, she said, would allow organizations that direct funds to qualify again. Murphy said the department had provided technical feedback to stakeholders but did not take a policy position about whether directing should qualify.

Committee Chair and the sponsor emphasized they want a floor amendment negotiated with QFCO stakeholders if necessary. After the hearing the committee returned the bill with a due‑pass recommendation (tally: yes 5, no 2, absent 2). The chair and the sponsor said they will convene stakeholders — including QFCOs, Arizona Impact for Good and Delta Dental — to try to craft amendment language that preserves foster‑care groups’ funding.

What’s next: The bill will proceed to the House floor with the committee’s recommendation while the sponsor and stakeholders seek clarifying amendments. Witnesses urged a post‑committee stakeholder meeting to avoid unintended harm to foster‑care organizations that provide specialized services to children.","Senate Bill 1496, which would unify the definition of services for two Arizona charitable tax credits, was returned with a due‑pass recommendation by the House Ways and Means Committee after testimony from nonprofit funders, foster‑care charities and the Department of Revenue.",{"_33":89,"_35":36,"_37":38,"_39":90,"_41":91,"_43":92,"_45":93,"_47":94,"_49":95,"_51":96,"_53":97,"_55":56,"_57":58,"_59":98,"_61":62,"_63":64,"_65":99,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6103549,"Committee approves widening income‑tax subtraction to include public health and other uniformed services",837,7233465,8071090,"/Search/View?dp=1&key=2794339-6e78ced7851b84bdef6f7aca8f45a686&start=7233&end=8071","https://assets.pipeline.soar.com/2794339-6e78ced7851b84bdef6f7aca8f45a686/thumbnail_7233465.jpg","/articles/6103549/Arizona/Committee-approves-widening-incometax-subtraction-to-include-public-health-and-other-uniformed-services","https://secure.pipeline.soar.com/6103549-cb64945f9b36fa3b3e26daa9a465362e/orig.mp4?Expires=1771163026&Signature=WivKTLhg4WRj4fnXe79YhSAfUFtlgjV7QsOTyOpYtWsZEyxeTSDpxGz8QyJ1YJ-Qgl-IHbzdHyqSqdQ3S7R8UYLlozfOX~9mKXuytgxUc5e8nJKZRxC4rqDyWdWDXzUKbIdZd7NqWLW82-59y9BuxCj-11dL29IqCsqqaqSlK7Tt7dKSS~mXXKtQG4GWhkNwSqjQjxqko4Z1ZxXorPYdjqANPclG6vcFjxB8VRkBjlqzpEjDlqYk9CAasVrJPh7WajCLYQEODvqhe33xoYhdmVtgv1YynrO1ekzz7ODoChv9~9C-GzjWMqNbQWIMTVnQyFhBBFNQoHAYi~7OHkWp8Q__&Key-Pair-Id=KUT5TJCACFTXG","Senate Bill 1155, which amends the individual income‑tax subtraction for active service by replacing the phrase “armed forces” with “uniformed services,” was returned with a due‑pass recommendation by the House Ways and Means Committee.

The change would align state tax code language with the broader federal categorization of uniformed services and would extend the subtraction to certain uniformed officers not included in the narrower “armed forces” label, principally officers of the U.S. Public Health Service (USPHS) and, where applicable, National Oceanic and Atmospheric Administration officers. Witnesses emphasized on‑the‑ground service in Indian Health Service, tribal clinics and other remote postings in Arizona.

Darren Venters testified in support and described the measure as a correction of an earlier omission: Department of Revenue guidance issued in 2010 had limited the subtraction to armed forces only, excluding some uniformed services even though a 2005 fiscal note had implied they were included. Captain Robert Boyle and family members spoke in support; Boyle described multiple deployments and routine public‑health missions across Arizona’s tribal communities. Emily Boyle described how USPHS assignments brought her family to multiple Arizona communities and urged equal recognition for the public‑health uniformed service.

Committee action: The committee returned SB 1155 with a due‑pass recommendation (tally: yes 7, no 0, absent 2). Members said the change restores parity among uniformed services and fixes a drafting/interpretation inconsistency in prior guidance.

What’s next: The bill advances to the House floor with committee endorsement.","The committee returned Senate Bill 1155 with a due‑pass recommendation to replace the term “armed forces” with “uniformed services” in an active‑service income tax subtraction, extending the state tax benefit to members of the U.S. Public Health Service and other uniformed services.",{"_33":101,"_35":36,"_37":38,"_39":102,"_41":103,"_43":104,"_45":105,"_47":106,"_49":107,"_51":108,"_53":109,"_55":56,"_57":58,"_59":110,"_61":62,"_63":64,"_65":111,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6103554,"Committee advances bill to extend aircraft maintenance sales‑tax exemption to general aviation; opponents call it tax break for wealthy",1547,5622830,7170315,"/Search/View?dp=1&key=2794339-6e78ced7851b84bdef6f7aca8f45a686&start=5622&end=7170","https://assets.pipeline.soar.com/2794339-6e78ced7851b84bdef6f7aca8f45a686/thumbnail_5622830.jpg","/articles/6103554/Arizona/Committee-advances-bill-to-extend-aircraft-maintenance-salestax-exemption-to-general-aviation-opponents-call-it-tax-break-for-wealthy","https://secure.pipeline.soar.com/6103554-5f8b5cc8a6e1602f3bc2fe5e613e8ee8/orig.mp4?Expires=1771163026&Signature=fTquAH6sgRuckLZL30bOS-hDOm2sdIAhJhZkRl56uu2fjdnP7L3cfWZhtf0UmaOg98PvxJcLzEzESJDmyHjdo5KIiUO36A~Mbh~CsNyqgLka74H4B2CmCNwnJvbYD2AkR2A1AOVjhzSn5qc~wW6jDTvW1iuhYPaVxrnOnJEgM3WBiNRxnsLwjT4PVpVnISX0x8xTUtm8FHf2JFPqD0lxeIEMokBFLNFpIxgySI1Sp0mwBwyVsEiBm9W9EGV3YfNtcWK2nZoHVPUEtFTYZB0wMRkIJl3ZskxUloBXNfzIPCf2QjMpbb7BdImYrcqwidXQ5jwWiyR3L7RPjWii8AfJLw__&Key-Pair-Id=KUT5TJCACFTXG","Senate Bill 1085, which would expand Arizona’s transaction‑privilege (sales) tax exemption for aircraft maintenance, repair and overhaul (MRO) to include navigational and communications instruments, accessories, and work on general‑aviation aircraft, was returned by the House Ways and Means Committee with a due‑pass recommendation after testimony for and against the measure.

Supporters, including representatives of Bombardier, Gulfstream, Ascent Aviation and local MRO operators, said the exemption creates parity with more than two dozen other states that have chosen to exempt aviation MRO in order to attract large maintenance facilities and associated high‑paying technical jobs. Stuart Goodman, representing Bombardier Aerospace, provided a map showing 34 states with similar exemptions and a prior private study estimating a net state revenue gain of $5.8 million to $11 million after accounting for additional payroll and economic activity.

Opponents included Opportunity Arizona, which asked why Arizona should give a tax break that benefits private‑jet owners and wealthy aircraft operators while working families face higher living costs. Blake Lister of Opportunity Arizona said the measure would “give out tax handouts for jets, including private jets” and argued the fiscal note showed a state revenue reduction likely in the millions. Other witnesses said the fiscal note could not precisely predict revenue impacts because the amount of MRO activity attracted is uncertain.

Proponents responded that aircraft and their operators already choose where to perform major maintenance; if Arizona does not offer a competitive tax environment they will go to other states. Several witnesses emphasized workforce development partnerships with local community colleges and described MRO jobs that begin at higher wage levels and do not always require four‑year degrees.

Committee action: SB 1085 was returned with a due‑pass recommendation (tally: yes 4, no 3, absent 2). Committee members split on the net fiscal effect and on whether the policy should favor the entire aviation sector (including general aviation) or remain limited to common‑carrier air carriers.","The committee recommended due‑pass for SB 1085 to extend a transaction‑privilege tax exemption on aircraft maintenance to navigational equipment and general‑aviation work. Aerospace firms and local maintenance facilities argued the change attracts MRO jobs; policy advocates warned the measure would shift costs and benefit private jet owners.","actionData","errors"]

Article not found

Committee backs plan to cut income tax rate by formula tied to structural surplus; critics warn of long‑term risks

House committee advances bill to clarify who qualifies for Arizona charitable tax credits amid foster-care group concerns

Committee approves widening income‑tax subtraction to include public health and other uniformed services

Committee advances bill to extend aircraft maintenance sales‑tax exemption to general aviation; opponents call it tax break for wealthy