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Arizona faces full federal tax conformity and a moratorium on data center tax cuts | Arizona Capitol Times

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Arizona faces full federal tax conformity and a moratorium on data center tax cuts | Arizona Capitol Times


Key points:
  • Legislature to send Gov. Katie Hobbs a bipartisan budget deal
  • Governor anticipated to sign, lawmakers expect to adjourn for summer on Friday
  • The $18.3 billion deal fully conforms Arizona to President Donald Trump’s federal tax cuts and pauses subsidies for new data centers for three years 

Gov. Katie Hobbs is expected to sign a bipartisan budget package now moving through the Legislature, calling the deal a compromise with legislative Republicans after including full conformity to President Donald Trump’s tax cuts and a three-year pause on subsidizing taxes for new data centers. 

The Joint Appropriations Committee passed the $18.3 billion package on Wednesday morning with only three lawmakers on the 28-member panel voting against it. Both chambers are expecting to vote on the budget package Thursday and adjourn sine die on Friday. 

Hobbs in May vetoed a $17.9 billion GOP-led budget proposal that kept the state’s sales tax exemption for data centers, but lawmakers and the Governor’s Office have reached an agreement after a month-long recess to focus on budget negotiations. 

“This bipartisan compromise shows what we can do when we put common sense before political games and focus on delivering real results for our communities,” Hobbs said on Tuesday. “It will put money back in the pockets of Arizona families and lower costs, make our communities safer and protect the vital services that Arizonans rely on.”

Republicans were primarily seeking to become the only state that fully conforms to the federal tax policy in last year’s One Big Beautiful Bill Act, H.R. 1. Full tax conformity is expected to reduce state revenue by over $1.4 billion over four years. While Democrats have largely opposed full tax conformity, Hobbs has supported “middle class tax cuts” that are also implemented in the budget, which includes the elimination of taxes on tips and overtime, an increased standard deduction and a new $6,000 tax deduction for seniors. 

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“This is a $1.4 billion tax cut budget,” said House Appropriations Committee Chairman Rep. David Livingston, R-Peoria. “It’s all that matters in this budget. Everything else is small potatoes.”

Hobbs had proposed some revenue sources of her own in her $18.7 billion budget proposal released in January. Those were kept out of the bipartisan deal, including a short-term rental $3.50 nightly fee and a sports betting fee that was expected to generate $146 million in revenue. The state’s Empowerment Scholarship Account program is also untouched after Hobbs asked for an income cap on the program earlier this session. 

“Arizona families will keep more of what they earn. Parents will keep school choice. Public safety will be funded. Government will be smaller. Welfare programs will be held to basic standards, and Governor Hobbs’ push for higher taxes and bigger government was stopped,” said House Speaker Steve Montenegro, R-Goodyear.

But Hobbs and Democrats did get the pause on tax breaks for new data centers, which lawmakers believe will save about $38 million annually. House Minority Leader Oscar De Los Santos, D-Laveen, said Arizona’s three-year moratorium on data center subsidies will be the longest of any state in the country.  

House and Senate Democrats are touting other wins in food assistance and public education support after a near 50% cut to the enrollment of the Supplemental Nutrition Assistance Program since last year. The budget funds free school meals for two years and allocates $235 million for food assistance programs and $66 million that will help public schools acquire textbooks, technology and transportation. 

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“We’re also using the money from stopping the data center tax giveaway to invest in food security and affordability,” De Los Santos said on Wednesday. 

And as Democrats secured money for those programs, Republicans got reforms to Medicaid and SNAP to include more strict eligibility and residency requirements for both programs as lawmakers are trying to reduce the state’s error rates to comply with federal requirements. 

“The reforms that we secured in this budget are going to drive down those error rates,” said Rep. Matt Gress, R-Phoenix. 

The only Republican who voted against the budget package on the joint committee, which included almost a third of the Legislature’s 90 members, was Rep. Justin Olson, R-Mesa. 

While Olson supports full tax conformity and the budget’s taxation omnibus bill, House Bill 4168, he said he couldn’t support the mass motion or the other budget bills with how much the state planned to spend.

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Republican leaders at the Legislature do consider this year’s budget spending growth to be a win relative to previous years. The budget has grown by 3.1% compared to last year, below the 3.9% combined change in Arizona’s population and inflation.

“I’m pleased that it increases much smaller than the amount that we increased the budget by last year, but I’m still very uncomfortable with a $716 million increase in state spending on top of the more than double the increase in population and inflation that was adopted last year,” Olson said.

Two Democrats, Sens. Mitzi Epstein D-Tempe and Lauren Kuby, D-Tempe, also voted against the budget in the appropriations hearing. Epstein did not support the tax conformity provisions in the budget, although she commended Democratic leaders for reaching a more favorable deal than the Republican budget presented earlier in the session. 

The GOP budget proposed cutting state agencies across the board by 10%, but that has now been reduced to a 2.5% reduction in operation spending which eliminates 1,000 unfunded full-time positions and requires the sale of vacant government buildings. The bipartisan budget also increases state employee healthcare spending by about $100 million and removes a 20% increase in premium payments that was in the GOP budget. 

Under the earlier budget, about 40,000 Arizonans would have been removed from the state’s Medicaid program, the Arizona Health Care Cost Containment System, but Democrats negotiated $20 million for 163 new full-time employees at AHCCCS and the Department of Economic Security to help administer the programs.

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“House Democrats stuck together and forced a better deal: one that feeds kids, supports public schools, lowers childcare costs, and protects healthcare,” Assistant House Minority Leader Nancy Gutierrez, D-Tucson, said in a Tuesday statement. 

The budget deal also includes a 4% stipend for correctional officers, $48 million to state childcare assistance programs, and $58 million for child safety operations. 



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Arizona

Arizona Chamber installs Monica Coury as board chair – Chamber Business News

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Arizona Chamber installs Monica Coury as board chair – Chamber Business News


The Arizona Chamber of Commerce & Industry has installed Monica Coury, vice president of external affairs at Arizona Complete Health, as chair of its board of directors, as the organization begins its new fiscal year.

Coury officially assumed the chairmanship during a ceremonial passing of the gavel at the Chamber’s June 26 board meeting. She succeeds Ted Geisler, president and CEO of APS, who served as board chair over the past two years.

As chair, Coury will lead the Chamber’s board while helping guide the organization’s efforts to advance policies that strengthen Arizona’s economy, improve the state’s business climate, and promote long-term prosperity.

“It is an incredible honor to serve as chair of the Arizona Chamber of Commerce & Industry,” Coury said. “I want to thank my fellow board members for the confidence they’ve placed in me, and I’m grateful for the opportunity to work alongside the Chamber’s outstanding team. The Chamber has long been one of Arizona’s most effective and respected advocates on behalf of the state’s job creators, and I look forward to building on that legacy as we continue working to make Arizona the best place in the nation to live, work, and do business.”

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Coury has served on the Chamber’s board for several years. She previously chaired the Public Affairs Committee and most recently served as chair-elect. In her role at Arizona Complete Health, she oversees one of the state’s leading health plans and has been a prominent voice on issues involving healthcare access, workforce development, and Arizona’s economic competitiveness.

“Monica is an exceptional leader whose collaborative approach, strategic vision, and deep commitment to Arizona make her the ideal person to lead our board,” said Danny Seiden, president and CEO of the Arizona Chamber of Commerce & Industry. “She understands that a strong economy depends on smart public policy, and she has consistently brought thoughtful leadership and sound judgment to the Chamber. I look forward to working closely with Monica as we continue advancing policies that help Arizona employers create jobs, invest, and grow.”

Seiden also thanked Geisler for his leadership during a period that included significant legislative successes and continued growth for the Chamber.

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“Ted has been an outstanding chairman, a trusted partner, and a friend,” Seiden said. “His steady leadership, business acumen, and unwavering commitment to Arizona’s economic future have helped position the Chamber for continued success. We are grateful for his service and look forward to his continued counsel and involvement on our board.”

The Chamber also installed the following governing board officers:

  • Chair-elect: Jimmy Lindblom, Willmeng Construction
  • Vice-chair, audit & finance: Don Isaacson, Isaacson Law Firm
  • Vice-chair, manufacturing: Angela Creedon, Intel

The Arizona Chamber of Commerce & Industry is Arizona’s leading statewide business advocacy organization, representing employers of every size and industry across the state. The Chamber’s mission is to advance Arizona’s competitiveness through policies that foster economic growth, job creation, and opportunity for all Arizonans.



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Records: Toddler found alive in hospital morgue after being pronounced dead by Arizona doctor 

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Records: Toddler found alive in hospital morgue after being pronounced dead by Arizona doctor 


GILBERT, AZ — An Arizona toddler was found breathing inside a Gilbert hospital morgue after being declared dead hours earlier by an Arizona doctor, according to police records.

A police report and body camera video reviewed by the ABC15 Investigators show that two Gilbert police officers saw signs of life multiple times, but the toddler was still taken to the hospital’s “cold room,” which is also considered to be the morgue.

One officer wrote in the police report that the baby was pronounced dead “in error” by the Mercy Gilbert doctor even after a tense exchange about a pulse possibly being detected.

The 18-month-old was rushed to Mercy Gilbert Medical Center after he was found inside the family’s pool on Super Bowl Sunday in February.

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It has taken months for the Gilbert police to release public records related to the near-drowning.

The ABC15 Investigators reviewed a half dozen body camera videos, including videos from the initial drowning scene and videos inside the hospital. Most of the videos are heavily blurred, and most of the audio has been muted, but one critical moment was captured between the doctor and the officer.

According to the police report, the officer wrote that a nurse in another room said: “I have a pulse.”

ABC15 is committed to finding the answers you need and holding those accountable.

Submit your news tip to Investigators@abc15.com

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The officer wrote that when he tried to alert the doctor who was with the family in another room, the doctor appeared to dismiss the concerns, “[The doctor] arrogantly told me he was the doctor, he has the medical degree, he went to medical school for a reason, and to let him do his thing.”

Records show that shortly after that exchange, the doctor went on to declare the baby dead.

Over the next hour, two Gilbert police officers continued to document signs of life in their police report.

One officer wrote, “The release of air was audible and visible,” later writing, “It also began to sound like [redacted] was gasping for air.”

The report goes on to say that when medical staff went to move the boy’s body to the morgue, the officer wrote that she “observed what appeared to be another audible gasp.”

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That was not the last time she heard signs of life, either.

While inside the morgue, the officer said, “I again observed what appeared to be a gasp or air release, which was now almost an hour later.”

A nurse who was there said those sounds could be a response to efforts to save the toddler.

Some of the last audio recordings heard on the body camera videos were of an officer telling the family that they could say goodbye.

The report says, hours later, at 11:52 p.m., the Medical Examiner’s transport showed up and found the toddler was breathing inside the hospital morgue. He was then flown to Phoenix Children’s Hospital for treatment.

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An MRI said that the baby had brain damage, and we are told he will need lifelong care.

An attorney representing the family declined to comment.

Mercy Gilbert said in a statement, “This is a heartbreaking situation. We immediately conducted a thorough review of all aspects of the care provided to learn what happened and to make meaningful changes to strengthen our care. Out of respect for the patient’s privacy, we cannot discuss details. We continue to work with the family and their representative. Patient safety and exceptional care is our highest priority.”

HAVE A TIP? Email Investigator Nicole Grigg at nicole.grigg@abc15.com.





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Arizona still pursuing nuclear energy despite hurdles | Arizona Capitol Times

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Arizona still pursuing nuclear energy despite hurdles | Arizona Capitol Times


Key Points:
  • Arizona utilities have begun a siting study to explore building a nuclear facility
  • The project hit a setback when the utilities were denied a Department of Energy grant 
  • Dwindling Colorado River water supplies could also challenge new nuclear growth

Arizona leaders are forging ahead with plans for new nuclear energy generation despite ongoing funding woes and water hurdles. 

At a June 25 Arizona Corporation Commission workshop, utility companies, universities, local governments and private industry stakeholders demonstrated their preparedness and commitment to turning the state’s dreams for a new nuclear power plant into reality. Arizona’s three largest electric utilities announced ahead of the workshop that they have commenced a siting study to find a potential location for the project. 

Arizona Public Service, Salt River Project and Tucson Electric Power are surveying a range of potential sites for a new nuclear plant, including decommissioned coal-fired plants. Commissioners celebrated that announcement at the workshop. 

“With the recent announcement that APS, SRP, and TEP have launched a preliminary siting study for potential new nuclear generation in Arizona, we’re seeing real momentum translate into meaningful action,” Commission Chair Nick Myers said in a statement. “The expertise and collaboration shared throughout this workshop will help ensure we’re prepared to seize the opportunities ahead and build a strong foundation for Arizona’s energy future.”

If all goes according to plan, the companies expect to hold community stakeholder meetings later this year near the potential nuclear sites. The companies will then “evaluate technical, financial and other factors” to determine whether to submit an early site permit application to the federal government.

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However, the utility companies did hit a snag in their process. They did not receive a U.S. Department of Energy grant they applied for in order to help finance that early site permit application, which would need to be submitted to the U.S. Nuclear Regulatory Commission. 

The utilities “will continue to work together to explore future funding opportunities to help mitigate the costs of evaluating potential new nuclear generation,” according to a joint statement. The companies stressed that a new nuclear plant is not a foregone conclusion, and they have not decided whether the potential project would use small modular reactors or large reactors like those at Arizona’s Palo Verde Nuclear Generating Station west of Phoenix.

The June 25 workshop also identified a few other potential obstacles that could slow Arizona’s nuclear energy progress, like supply chain constraints, community backlash and dwindling Colorado River water supplies. 

Cuts to Arizona’s Colorado River water allocation could be the most difficult obstacle for the state to overcome in order to pursue a new nuclear plant. Representatives from the Arizona Department of Water Resources and the Arizona Municipal Water Users Association told commissioners that the Colorado River is no longer a reliable water supply and alternatives will likely require significant investments.

Palo Verde uses recycled wastewater to cool its three nuclear reactors and APS has explored using low-quality groundwater for cooling at the plant. But with water likely to become more scarce and more expensive in Arizona, a cooling source for any new nuclear plant could be a significant hurdle. 

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Proposals attempting to clear the way for new nuclear technologies, like small modular reactors, also did not fare well during this year’s legislative session. Lawmakers introduced six bills that would have preempted local authority or streamlined environmental review processes for small modular reactors, but only one made it to Gov. Katie Hobbs’ desk.

Senate Bill 1418 from Sen. Frank Carroll, R-Sun City West, would have allowed utility companies to bypass the commission’s traditional environmental review process for project siting if the company planned to replace a coal generation unit with a small modular reactor. That bill could have benefited the joint project from APS, SRP and TEP if the companies eventually select small modular reactor technology for the new plant. 

However, Hobbs vetoed the bill, arguing it was not in line with the state’s goal to “responsibly reduce barriers to deploying new energy projects quickly.”

“We are not in the business of picking winners and losers in the energy landscape, and while advancements in small modular reactor technologies are promising, they are still emerging,” Hobbs wrote in a veto letter. “Deploying such a catch-all approach for an emerging technology, as laid out in this bill, is irresponsible.” 

Nevertheless, a potential new nuclear power plant has broad, bipartisan support in Arizona. And some communities are chomping at the bit to bring the technology to their areas, as Navajo County Supervisor Jason Whiting told commissioners on June 25. 

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“Northeastern Arizona’s energy communities… want to be part of it,” Whiting said. “They want to be involved with it. They will embrace this discussion and decision with open arms.”



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