Feedback: January 2015

Question: What state government act or action has impacted (for good or bad) your industry?

Michelle Ahlmer
Executive Director
Arizona Retailers Association
Sector: Retail

The retail industry in Arizona is poised to receive some long-awaited relief from one of the most complicated sales tax systems in the nation. The majority of states conduct sales tax audits through a state agency; however, Arizona has allowed cities to audit businesses within their jurisdictions. This approach has put businesses in the position of having multiple audits and being subject to varying interpretations of tax liability. As of January 1, 2015, the Arizona Department of Revenue has begun administering a standardized state audit program as a result of historic legislation passed in 2013.

Governor Brewer supported the legislation and Representative (now Senator-elect) Debbie Lesko championed HB 2111, Sales Tax Reform, which created the standardized audit program that requires all state and city auditors be trained and certified by ADOR. Additionally, business will be subject to only one audit that will include state, county and city sales tax liabilities. Furthermore, city audits will be limited to taxpayers engaged in business in only one city, and multijurisdictional taxpayers will be audited only by ADOR.

Executive director of the ARA since 1996, Michelle Ahlmer administers its legislative and government affairs program on behalf of national, state and local retail companies. She is the spokesperson for the association — whose 1,400-plus members range from an independent confectioner to the largest retailer in the world — and a resource for ARA members as well as policy makers.

Tim Lawless
President
NAIOP Arizona
Sector: Real Estate

The current state budget deficit and a daunting structural deficit the following year will be felt by all. One harm it causes commercial real estate is it negatively impacts the ability to develop a well-qualified work force due to education cuts. The budget situation, however, creates the opportunity to reform many aspects of state and local government service delivery. Certainly, we can do a better job of getting more money as a percentage of every dollar spent into the classroom than we did since the passage of Proposition 301 in 2000.

Because of the budget, our top state priority will be to preserve the assessment ratio reduction savings for commercial property taxation passed into law in 2011 (HB2001). We need to send the signal that we will continue to address our top impediment to economic development, which are high property taxes.

Along with Governor Ducey, we will fight any effort to impose new taxes on business. This includes a new temporary sales tax rate increase or expanding the sales tax base to include goods and services currently exempted from the state base, such as commercial leases.

Tim Lawless joined the Arizona chapter of NAIOP as its president in November 2005. The Arizona Chapter of NAIOP is the statewide voice of the Arizona commercial real estate community at the legislature and before regulatory agencies. NAIOP’s membership is more than 700 strong and includes developers, brokers and commercial real estate service professionals.

Greg Vigdor
President and CEO
Arizona Hospital and Healthcare Association
Sector: Healthcare

Without a doubt, the re-opening of Medicaid rolls and restoration of coverage for the working poor has been the most impactful state action for Arizona hospitals and the healthcare industry at large. Medicaid Restoration, enacted by Governor Brewer and the Arizona Legislature in 2013 but implemented in 2014, has allowed 300,000 eligible Arizonans to access quality, affordable care. It has also reversed a troubling trend of spiraling costs borne by hospitals to provide care to the uninsured. As of October 2014, the cost of uncompensated care in Arizona had declined one-third from a year ago — a significant savings for hospitals, especially safety-net and rural providers.

This isn’t the whole story, of course. More than one-third of Arizona hospitals who responded to a recent AzHHA survey reported they continue to operate at a loss. There are real questions about whether a provider assessment paid by hospitals as part of the Medicaid Restoration plan is properly calibrated or unduly burdensome. This analysis is ongoing.

But there can be no denying the re-opening of Medicaid enrollment was an instance when state government took action to the benefit of hospitals, health providers and Arizona families.

Greg Vigdor is president and CEO of AzHHA, the state’s largest and most influential organization representing hospitals, health systems and affiliated organizations across Arizona. Vigdor earned his Bachelor of Arts from the University of Connecticut; a Masters of Health Administration from the University of Washington and a Juris Doctor from George Washington University Law School.