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ARIZONA HOUSE OF REPRESENTATIVESFifty-seventh Legislature First Regular Session |
House: PSLE DP 8-7-0-0 |
HB 2221: law enforcement; defunding; prohibition
Sponsor: Representative Marshall, LD 7
Caucus & COW
Overview
Mandates a city or town (municipality) not to reduce a law enforcement agency's annual operating budget (budget) below the previous year's budget.
History
The Urban Revenue Sharing (URS) program provides that a percentage of state individual and corporate income tax revenues are to be shared with municipalities in Arizona. Through FY 2023, the amount distributed to municipalities was 15% of net income tax collections from two years prior to the current fiscal year. Laws 2021, Chapter 412, increases the URS distribution from 15% to 18%, beginning in FY 2024. URS monies are distributed to municipalities based on population (A.R.S. § 43-206; JLBC FY 2025 Baseline, GF Revenue; DOR Tax Handbook, Individual Income Tax).
Revenues collected through state transaction privilege tax (TPT), often called "sales tax", are also shared with Arizona’s counties and municipalities through a complex system of formulas established in statute. The Department of Revenue transmits all TPT revenues to the State Treasurer, a portion of which are designated for distribution to counties, municipalities and other purposes. After the required distributions, remaining monies are credited to the state General Fund (A.R.S. § 42-5029; DOR Tax Handbook, TPT).
Provisions
1. Prohibits a municipality from reducing the budget of a law enforcement agency below the previous year's budget. (Sec. 1)
2. Provides that a municipality that reduces its law enforcement agency's budget will not have its state-shared monies withheld if:
a) the municipality does not have sufficient monies;
b) the budgets of all other departments and agencies are reduced by an equal or greater amount as the reduction in the law enforcement agency's budget;
c) the municipality has not experienced population growth; or
d) the municipality increased the law enforcement agency's budget in the previous year for a one-time capital expense. (Sec. 1, 2 and 3)
3. States that if a municipality reduces their operating budget, the municipality:
a) must reduce all other departments' or agencies' annual operating budgets first; and
b) may not reduce the annual operating budget for a law enforcement agency in an amount greater than the reduction to all other municipal departments' or agencies' annual operating budgets. (Sec. 1)
4. Requires a municipality that reduces a law enforcement agency's budget to notify the State Treasurer. (Sec. 1)
5. Requires the State Treasurer to withhold URS and state-shared TPT monies, from a municipality that reduces a law enforcement agency's budget, in an amount equal to the budget reduction. (Sec. 1, 2 and 3)
6. Specifies that the State Treasurer is to continue withholding state-shared monies until the municipality restores the law enforcement agency's budget. (Sec. 1, 2 and 3)
7. Stipulates that the State Treasurer is not to withhold any amount of state-shared monies that a municipality certifies as necessary to make required payments for debt service on bonds or other long-term obligations issued or incurred before the law enforcement agency's budget reduction. (Sec. 2 and 3)
8. Defines law enforcement agency. (Sec. 1, 2 and 3)
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