Farming isn’t the only job that necessitates working on a holiday. The Arizona Legislature provided a Memorial Day to remember, working throughout the entire holiday to wrap up the state budget and adjourn Sine Die in the wee hours of the morning on Tuesday, May 28.
While they did not achieve their statutory deadline of a 100-day session, the last five months were full of major policy issues that required legislative action. For the agriculture industry, that included passage of the Drought Contingency Plan (DCP), policies to reign in county assessors, a statute clarifying that fertilizers and crop production materials are exempt from state and municipal sales tax, and a budget appropriation to secure agricultural water infrastructure in central Arizona.
What already proved to be a fast-paced legislative calendar in Arizona was taken to a new level in January when the Department of Interior announced a deadline for the Lower Basin States to adopt the agreed-upon Drought Contingency Plan (DCP). Arizona’s portion of the agreement required legislative authority in order for it to be enacted. A lot of disagreement among the major water entities in the state resulted in hours and hours of hearings lasting well into the evenings. However, with compromise through amendments, the DCP was passed and signed by Governor Doug Ducey on January 31.
DCP is the biggest water policy change in Arizona in the last 40 years. It represents a major shift to conservation over productive use. It allows entities that hold Colorado River contracts to keep their allotment in the reservoir without that water being offered for use to others. Through this agreement, the state has also made significant investments into securing additional water to be left in Lake Mead to prevent further shortages and cutbacks. One component of this is the Colorado River allotment that central Arizona irrigation districts were set to receive through 2026. Under the DCP, they will lose their river allotment in 2023. To compensate for the loss, the state has agreed to help fund the well infrastructure necessary to allow these districts to transition back to groundwater.
On the tax front, Western Growers pursued major policy changes to support our members. Through the budget process, we were successful in clarifying that fertilizers, pesticides and other crop protection materials are exempt from state and municipal sales tax beginning December 1, 2019. Until now, Arizona was one of only two states in the nation charging a sales tax on fertilizer used in commercial ag operations. Since fertilizer is a commodity that fluctuates in price, this sales tax based on price rather than consumption was especially punitive to farmers when fertilizer prices would spike. For cities with a population less than 50,000, the municipal tax is eliminated in June of 2021 to allow a phase out period for most rural cities. Laws to protect the business personal property tax exemption at the county level and the ag property tax classification for farmland subject to fallowing due to drought were also signed by the governor.
Some successes came in the form of bills that did not reach the governor’s desk or were amended in such a way that they were no longer a concern. A bill to ban several pesticides from use in Arizona was never given a committee hearing. Another bill to provide additional representation by the residential pest industry on the Arizona Department of Ag Advisory Council was amended to keep the original council intact and provide an alternative forum for the residential pest industry to provide input to the department.
Our successes this session were the product of hard work among the ag lobbying coalition and a strong representation of farmers and ranchers serving in the Arizona Legislature. Due to another resignation of a state representative for ethical issues, we saw a fourth ag legislator added to the ranks this year. Senator Sine Kerr and Representatives David Cook, Tim Dunn and Steve Pierce are an agricultural force to be reckoned with in Phoenix. All of their livelihoods depend on ag and we are fortunate for their service as state lawmakers.
While legislators, staff and lobbyists all missed out on their Memorial Day barbeques, the work done that day to move the State of Arizona forward was well worth the sacrifice. WG staff is already working on plans for the 2020 legislative session to ensure that our members can continue to operate and produce the best medicine in the world.
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