- Associated Press - Tuesday, February 2, 2016

PHOENIX (AP) - Cities and towns being targeted by a bill that would cut off their state shared revenue if they passed regulations in defiance of state law reacted to the plan with anger and dismay on Tuesday.

The proposal by Senate President Andy Biggs would penalize cities and towns after an investigation by the Attorney General Mark Brnovich. They would be given 30 days to rescind the action or lose their state shared revenue.

The state sent nearly $1.1 billion from income and sales taxes to 91 cities and towns in the budget year that ended June 30. The sharing dates to a 1972 voter initiative that included a deal barring cities and towns from levying their own income taxes in exchange for the state sending them part of its revenue.

“For many years I think the Legislature has been frustrated that when we pass legislation a lot of cities and towns and subdivisions believe they don’t have to conform to the law,” Biggs said Tuesday. “This is just to say, “Look, you have to conform to the law.’”

Tucson city council member Steve Kozachik called Senate Bill 1487 a pre-emptive strike to stop cities and towns from enacting legal regulations the Legislature doesn’t like.

Kozachik said Gov. Doug Ducey and lawmakers are using the attorney general’s office as judge and jury to muscle cities and towns into falling in line. Ducey in his State of the State address last month threatened to withhold shared revenue from cities that boosted the minimum wage above the state rate. Biggs’ proposal doubles down on that promise.

“They are holding a financial sword over our heads and are frankly inviting a challenge,” Kozachik said. “The guy (Ducey) is just an autocrat and so is Biggs and they are getting Brnovich to do their heavy lifting for them.”

Phoenix Mayor Greg Stanton calls the proposal an illegal affront to local control because voters approved the sharing arrangement.

He said city leaders are elected to represent the core values of their constituents, and those don’t always mirror those held by the Legislature as a whole.

“It’s our obligation to be leaders on important issues of public policy,” Stanton said. “The city of Phoenix has been a leader on employment protections for LGBT citizens. We’re way ahead of the state of Arizona in that regard, just like we were way ahead of the state of Arizona on a Martin Luther King Jr. holiday.”

The Arizona Legislature has a long history of fighting with the federal government when it tries to impose rules on the state, but Biggs said that’s much different than the Legislature imposing its will on cities and towns.

“The states created the federal Constitution - the states have sovereignty,” Biggs said. “Guess what the Arizona Constitution says - it creates the cities, town and counties. They are subdivisions. That’s the fundamental difference. We give them authority to act.”

Ken Strobeck , executive director at the League of Arizona Cities and Towns, said city and town councils are in a better position than state lawmakers to pass ordinances that are reflective of their communities. Cutting off access to shared revenues would seriously impact municipalities that rely on the funds to provide essential services, he said.

“Cities and towns are not in the business of trying to impose regulations on businesses or individuals that are arbitrary or capricious,” he said. “They are not all cookie cutter. They are not all the same. They have different community standards and interests.”

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