Legislature weighs school voucher expansion, tax exemption increase

The Arizona Legislature is considering bills that could cut more than $175 million from the state’s general fund and give it to taxpayers, businesses and students — and that’s not counting the financial impact of the budget currently in negotiations.

The bills include tax cuts, new tax credits, tax exemptions and new spending. Here are some of the bills still in play:

School voucher expansion: Republican lawmakers are advancing identical measures — Senate Bill 1431 and House Bill 2394 — that would expand the Empowerment Scholarship Account program to all students by the 2020-21 school year. Legislative staff estimate the expansion could cost the general fund an additional $24 million a year once it’s fully implemented.

Income tax exemptions: HB 2528 would adjust the amount of personal income tax exemptions an individual can take based on the Metropolitan Phoenix Consumer Price Index. The adjustment would mean about $42 more per person the first year and would cost an estimated $3.6 million from the general fund next fiscal year, $10.2 million the following year and $16.3 million the year after. It’s expected to increase each year based on inflation.

Currently individuals get flat exemptions of $2,100 for a single person, $4,200 for a married couple or head of household, and $6,300 for a married couple with at least one child.

Day-care assistance: HB 2021 increases to 24 the maximum age a parent can get state child-care assistance while attending school instead of working. The current maximum age is 19. Legislative staff estimates it would cost the state $96.8 million to cover the day-care expenses of all qualifying parents. However, the program is financially maxed out with a long waiting list. Adding these individuals to the waiting list would not cost the state additional money.

Angel investors: HB 2191 would allow the Arizona Commerce Authority to give an additional $10 million in tax credits to small-business investors. Currently, the state certifies up to $20 million in tax credits for investments in small businesses.

Broadband valuation: SB 1326 would change how broadband infrastructure is valued, speeding up depreciation. Legislative staff estimates the proposal would cost the general fund $2.7 million a year.