Sneak peek at hot topics for 2021 Legislative Session
Arizona’s 55th Legislature convenes Jan. 11, 2021, for the regular legislative session, and Jaime Molera, Partner of Molera Alvarez, provided a preview of the upcoming session for the Greater Phoenix Chamber of Commerce.
Check out the highlights of his forecast below or view the recap video.
Top 3 issues of upcoming session and how they’ll impact business
The effects of COVID-19 will dominate all the major issues addressed at the legislature this year. The primary issue is going to be the budget, and, particularly, how to get businesses going again amidst the retraction of the economy due to COVID-19. Arizona is fortunate because we’ve been propped up by a lot of online sales, which has been our saving grace in terms of collecting sales tax. This is due to the fact that Arizona enacted legislation in 2019 that requires online sellers to pay transaction privilege tax.
On the flip side, there are a lot of Arizona small businesses not getting those sales, and they’ve been hit hard. We have to look at how these major blows to small businesses affect our sales tax revenues long term.
#2: Kick-Starting the Economy
Along those same lines, there will be a focus on kick-starting the economy. For example, how to get Arizona’s tourism industry—a key driver of the state’s economy greatly impacted by the pandemic—going again. This could mean giving tourism marketing authorities the resources to begin promoting and branding Arizona with renewed force, so once people begin to return to normal and get vaccinated, visitors will start coming back to Arizona.
#3: Liability Reform
There will be efforts to make sure businesses that are doing their due diligence to make sure people are safe during the pandemic can function and are not exposed to frivolous lawsuits.
What 2020 election results tell us about Arizona’s political landscape
In the 2020 General Election, Arizona turned blue at the Federal level, but Republicans maintained their majorities in the Arizona House and Senate. This means, if you have an “R” by your name for an Arizona statewide office, you’ll no longer be able to rely on an automatic win, as in years past. We now know the “Blue Wave” that was predicted to sweep the ballot doesn’t happen unless political candidates are strong and have equally strong resources behind them.
At the same time, Arizona’s electorate has changed. We’ve had significant in-migration from states like California where political philosophies may not be as extreme on either side of the aisle, but are more centrist. And we have a growing Latino population that is showing up at the polls in greater numbers. Political parties are going to have to do a better job of outreach to make sure their messages get heard.
What to expect from Legislative leaders
Republicans have very thin margins in the Arizona state legislature: the House of Representatives has 31 Republicans and 29 Democrats and the Senate has 16 Republicans and 14 Democrats. So, if one member defects and does not vote along party lines, it will be a very interesting process.
What’s going to happen at the start of the session will be incredibly telling. There’s a lot of infighting going on right now within the Republican Party. (The same could be said of the Democrats, but it really hasn’t manifested itself because they’re not in charge.) For instance, there’s a lot of disagreement on how the elections were handled, with many state senators calling for more action from their leadership, as well as the Governor, and Speaker Bowers receiving significant blowback. There’s also a clash over how the state is dealing with COVID-19. There’s a segment of the Republican Party that feels we shouldn’t be doing vaccinations, we shouldn’t be wearing masks, and we shouldn’t have restrictions of any kind related to the containment of COVID-19. All those things are going to come to a head when the session kicks off.
The question is how far will certain members go to block policy priorities outside these realms from happening, from bills to the budget. I will be interested to see how the legislative leadership will deal with these areas of internal discord, and how they’re going to get the basic legislative session going again.
Why and how business leaders should get involved in the legislative process
To paraphrase what Plato said—people who feel they’re too smart to get involved in politics are often doomed to be governed by those who aren’t so smart. If business leaders are reticent to get involved, they have to understand their livelihoods, the livelihoods of their employees, and their ability to service their customers, will all be put in jeopardy. Because if they’re not engaged, policies that affect their everyday lives will be imposed on them, whether they like it or not.
The easiest way to get involved is by being a member of the Greater Phoenix Chamber and, more than that, getting engaged. Whether you’re in health care, construction, or finance, the quality of our committees is exceptional, and we know how to utilize our members’ talents. By getting involved in these committees, we can make sure the policies that are being pursued marry good government and good business—which are not mutually exclusive. The Greater Phoenix Chamber’s leadership aggressively seeks input from business leaders, and the more we can utilize the talents of our membership, the better off Arizona government will be—at all levels. To stay up to date on Arizona government actions affecting business, subscribe to the Molera Alvarez newsletter.
Jaime Molera is Partner and Co-Founder of Molera Alvarez and serves on the Executive Committee of the Greater Phoenix Chamber as the Chair of Education & Workforce Development and Public Affairs.