The Farley Report from Phoenix #219: 2-18-15

It's been another wild week here with plenty of ups and downs. I'll launch right into a few…

1011BoardLR.jpg --> The first Democratic bill of the session to pass third read in the Senate was my SCM1011 to urge the federal government to revise Dodd-Frank regulations and use more common-sense underwriting standards for small business owners and sole proprietors who are trying to refinance their homes. It passed 29-0, and President Biggs explained his vote saying that this was the first Farley bill he has ever agreed with and voted for -- in fact, he was a co-sponsor.

The provisions get at a major issue with the federal Dodd-Frank Act. Sole proprietors can no longer refinancing home loans -- no matter how good their credit -- because they are now required to prove ability to repay via their Schedule C, whose purpose is to show how little income they have in order to reduce tax liability. They are in a no-win Catch-22 situation. My bill simply asks the Feds to revise the underwriting standards to allow common-sense credit measures like credit score, a long track record of on-time monthly payments, and more. Now it heads to the House. 

 --> My efforts to ban texting while driving in AZ made the front page of the Arizona Republic yesterday, and I appeared live with Mark Curtis on Phoenix's Channel 12 5pm News:

RepublicTextingLR.jpgThis year's version, SB1102, was not heard in the other three committees to which it was assigned by President Biggs and is thus dead in its current form (since this week is the last week for bills to be heard in their chamber of origin). It continues to generate a large amount of statewide publicity in all media, something that has the power to save lives when even just a few of the people reading or listening to the coverage make a decision to stop driving while texting, even without a law yet in place. 

While the bill is dead, I have strategies to force the content into consideration the floor. As always, I hold out hope that open debate among all members can finally turn this bill into a law. After all, we are one of only two remaining states who do not have any type of statewide ban, and a poll released last week showed that 88% of Arizona Democrats AND 90% of Arizona Republicans agree that texting while driving is a problem that must be addressed. When did you last see agreement like that between the major parties? 

Distracted driving is a clear and present danger to public safety which has killed and will kill Arizona citizens. It's time for a law. I will not stop until I make it so. 

--> SB1371 (Lesko), which would phase out desegregation funding for all school districts even if they are currently under a court order to provide those services (destroying TUSD by taking away $64 million a year on top of the more than $8 million taken by the Governor's budget), was heard last Wednesday morning, and I led the charge to stop the bill. TUSD Superintendent H.T. Sanchez testified eloquently against the bill, raising concerns even among Republicans on the committee. 

One unpleasant surprise was the written testimony of TUSD board member Michael Hicks, who -- identifying himself as writing in his official capacity -- undercut his superintendent, the rest of the board, his campaign promises, and the students, teachers, and parents he took an oath to defend by asking the committee to approve the bill and take away $64 million a year from the district. Here is a screenshot of his actual statement:


I was astounded. Although Hicks was not physically present, Chair Lesko read his words and title twice (something that is unheard of) because she liked the sentiment. I believe that the TUSD community needs to know that an elected board member was giving aid and comfort to those in Phoenix who would shut down our schools. I plan to address the TUSD Board at their next board meeting about the bill and confront Mr. Hicks directly about his outrageous and damaging behavior. If you are interested in joining me there, it will be at around 6:30pm, next Tuesday, February 24, at 1010 E. 10th Street in Tucson.

The bill itself squeaked out of the committee 3-2, and is headed to the floor. I am doing all I can to defeat it. If I am successful, it may never even make it to a final vote -- that is my goal.

--> SB1120 (Lesko) was heard in Finance this morning. It is an interesting case study demonstrating how we managed to pack more than $12.6 billion among hundreds of sales tax loopholes into our sales tax code over the past few decades -- which has led in part to the massive budget deficit we are facing. Every loophole has a reasonable-sounding argument to be made, but in the aggregate they bleed the public treasury dry while making the tax code more unfair for those who can't afford lobbyists.

This bill was brought by a number of Scottsdale art gallery owners who were upset that out-of-state artbuyers who visited their gallery or auction house on vacation would have to pay sales tax on the art they bought if they made the transaction in person and had the pieces shipped to their home out of state. The bill gives them an exemption costing several hundred thousand dollars at minimum out of the general fund -- all of which would otherwise be collected from people who don't live in AZ while those of us in AZ remain on the hook for the taxes.

I pointed out to the gallery owners in committee that they already had a tax deduction due to the clause in the U.S. Constitution that gives all powers over interstate commerce to the federal government. Practically speaking, that means that if an out-of-state buyer sees the art in Scottsdale, then goes home and calls in their phone number to place the order to be delivered to them, no one is subject to tax. 

Even after admitting that they already have this solution to their problem, one gallery owner actually claimed that he and his colleagues would leave the state and no one would ever come here to buy art anymore unless they got a special loophole just for them. I was told that, as an artist, I "just don't understand."

I explained my vote saying that this could be seen as an example where I, as a professional artist, am voting against my own interest and for the greater good. Number one -- no Arizona resident expects to get out of paying sales taxes when shopping in a store in Arizona, so why should non-residents be any different? Number two, and more importantly, every additional loophole in the tax code reduces revenues to the state, forcing more cuts to services like education, transportation, health care, and public safety that all Arizonans (artists and gallery owners among them) really need. 

It is time to draw the line. Everyone can come up with a good explanation of why they shouldn't have to pay this or that tax. But if we assent to all those good explanations, we undercut the government services we need to operate as a thriving society and economy. I will not be supporting any more exemptions that take away more revenues than they bring in -- and I don't buy voodoo economics that claim all tax cuts bring in more revenues.  

Thanks for your continuing faith in me as your Senator. 


Steve Farley

Senator, District 9, Tucson