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ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
state finance review; task force
Purpose
Establishes the Citizens Finance Review Task Force (Task Force) to analyze state General Fund (state GF) and nongeneral fund revenues and expenditures and outlines Task Force membership and requirements. Requires the Task Force to report its recommendations regarding the responsible retirement of existing state debt by September 30, 2023.
Background
The revenues collected from Arizona's taxes are deposited in a number of funds, including the state GF. In FY 2021, ongoing state GF revenue was $14.9 billion. Revenues from numerous taxes are deposited in the state GF and four taxes constitute most of state GF collections. Those taxes are: 1) sales tax; 2) individual income tax; 3) corporate income tax; and 4) insurance premium tax (JLBC Tax Handbook, 2021).
A majority of
state GF expenditures are determined by statutory funding formulas. In
FY 2022, funding formula spending constitutes approximately $8.4 billion of the
state budget, which represents approximately 64.9 percent of total state GF
spending (Statutory
Funding Formula and Lease-Purchase Costs, JLBC).
There is no anticipated fiscal impact to the state GF associated with this legislation.
Provisions
1. Requires the Task Force to:
a) analyze the source of state GF and nongeneral fund revenues, as compared to other states, including sustainable, stable and equitable fund revenues;
b) analyze state GF and nongeneral fund expenditures, as compared to other states, including budgeted expenditures based on an analysis of necessary funding levels to meet the responsibilities of the various state agencies; and
c) make recommendations regarding the responsible retirement of existing state debt.
2. Requires the Task Force to include, within the revenue analysis, an analysis of the impact of all tax credits and transaction privilege tax exemptions on economic development and the state GF.
3. Establishes the Task Force consisting of the following members:
a) three members of the House of Representatives (House), two of whom are appointed by the Speaker of the House and one of whom is appointed by the Minority Leader of the House;
b) three members of the Senate, two of whom are appointed by the President of the Senate and one of whom is appointed by the Minority Leader of the Senate;
c) the President of the Arizona Board of Regents (ABOR) or their designee;
d) the President of the State Board of Education or their designee;
e) the Director of the Department of Child Safety or their designee;
f) the Director of the Arizona Health Care Cost Containment System administration or their designee;
g) one representative of a statewide organization representing the business community who is appointed by the President of the Senate;
h) one representative of a regional business organization representing rural Arizona who is appointed by the Speaker of the House;
i) one representative of a statewide organization representing business and education leaders who is appointed by the Governor;
j) one representative of a statewide organization representing public schoolteachers who is appointed by the Minority Leader of the Senate;
k) one representative of a statewide organization representing school district governing boards who is appointed by the Minority Leader of the House;
l) one representative of a statewide organization that advocates on behalf of children in the areas of education, human services and the state budget who is appointed by the Governor;
m) three economists, appointed by the President of ABOR, one of whom works for each of the state universities;
n) one economist from the Arizona Department of Revenue (ADOR) who is appointed by the Director of ADOR; and
o) two private sector economists who are appointed by the Governor.
4. Requires the Speaker of the House and President of the Senate to designate the cochairpersons of the Task Force from the members of the House and Senate.
5. Requires the Task Force to submit a report of its findings and recommendations to the Governor, the President of the Senate and the Speaker of the House by September 30, 2023.
6. Requires the Task Force to provide a copy of the report to the Secretary of State.
7. Requires the Task Force, by January 31, 2024, to present the report to a joint meeting of the House and Senate Appropriations Committees and requires the joint meeting to allow public testimony.
8. Prohibits Task Force members from receiving compensation, except certain appointed members are eligible for reimbursement of certain travel and lodging expenses.
9. Allows the Task Force to use the staff of the following state agencies for technical assistance and preparation of meeting presentations:
a) the Joint Legislative Budget Committee;
b) the Governor's Office of Strategic Planning and Budgeting;
c) the state universities; and
d) nongovernmental entities.
10. Requires the Task Force to hold regular public meetings that allow public testimony.
11. Requires the Task Force to give the statutorily required reasonable notice of the public meetings.
12. Requires the Task Force to meet at least once in Tucson, Yuma and Flagstaff.
13. Repeals the Task Force on October 1, 2024.
14. Becomes effective on the general effective date.
Prepared by Senate Research
January 14, 2022
MG/AN/slp