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4 ways the Arizona Legislature can help lower what you pay for housing and food

Arizonans need relief from rising housing and food prices. Here's how lawmakers like me can help.
Arizonans need relief from rising housing and food prices. Here's how lawmakers like me can help.

As the holiday season sets into motion a barrage of spending on gifts, festivities and travel, many hardworking citizens within Arizona are finding themselves struggling to pay for basic necessities in the face of crippling inflation.

Despite hopes from analysts that inflation is cooling, the Consumer Price Index is still up more than 7% nationally for the year, and metro Phoenix is worse at 12%. That means putting food on the table, filling up the gas tank, making rent and paying bills is even more challenging for those living paycheck to paycheck.

At the same time, government has collected a record amount of revenue. When comparing fiscal year 2019 to fiscal 2022, General Fund revenue for Arizona has increased by 48% – a whopping $5.64 billion!

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While the federal government continues to exacerbate the problem with reckless spending, there are at least four actions we can make at the Legislature to counter the effects of rising prices and help our citizens reeling from runaway inflation.

1. Eliminate the tax imposed on renters

Charging rental tax is bad tax policy. Arizona is one of the few states that allows it.

The government already collects property tax on the property and should not also charge the tenant a tax for that same property. This tax can be anywhere from $50 to $200 a month, ranging across the state between 1% and 4%. Phoenix charges 2.3%, one of four Valley cities charging 2% or more.

That’s money a tenant could use for gas or groceries.

It’s not fair for tenants to pay the tax. People who own homes don’t pay a tax every time they make their mortgage payment.

This initiative alone can help the average renter stretch their dollars a little further. We should join the vast majority of states and ban this unfair tax.

2. Ban regressive grocery taxes statewide

Food is not a luxury. Food is a necessity.

Shockingly, food prices have skyrocketed over the past year between 15% and 45% for items like eggs, butter, lettuce, coffee, bread, potatoes and poultry.

A tax on food is regressive and hurts everyone. According to a 2019 news report, Arizona collects a total of $115.2 million annually from this tax.

This figure has since increased due to inflation. Fortunately, many cities do not charge a food tax.

Let’s ban it statewide.

3. Reduce home construction delays

Twenty years ago, you could take a property from dirt and build a house within six months. Those days are gone as a litany of hurdles have been placed in obtaining approvals for land development and housing.

Today, it can take up to four years for the same approvals.

Let’s increase the housing supply by shortening the lengthy and burdensome regulatory window review timeframes. Each local community varies, but this can take anywhere on average between 12 and 24 months, according to recent testimony heard during the Legislature’s Housing Supply Study Committee.

One way to accomplish this goal is through administrative approvals for all projects that meet existing laws and requirements.

More housing product means lower prices to own or rent a home. Quicker approvals also mean more certainty for business.

Recently, a large tech company told me they wanted to expand in Phoenix. Their biggest hesitation was the time it would take to build the project.

4. Slash or nix occupational license fees

Whether you're a barber, realtor, loan officer, contractor or other licensed professional, you are required to pay fees to the state to hold your license. For example, a new license application from the Registrar of Contractors ranges between $580 to $1,050. Renewal costs between $480 and $750.

Regulatory agencies within Arizona collect more than $40 million annually in these fees. These government-imposed surcharges are passed directly on to the consumer. Let’s cut those in half or eliminate them altogether to lower the prices of goods and services for everyone.

State and local governments are enjoying record surpluses, but taxpayers are hurting. These initiatives are simple, broad-based and provide effective relief from inflation now.

Local governments will likely use the scare tactic that tax cuts will hurt public safety. The reality is, municipalities will continue to collect record revenues because the taxpayer will spend what they get back, which in turn will be taxed via income and sales tax.

Not to mention that with the record revenues government is receiving, there is undoubtedly enough to fund public safety and provide a little inflationary relief to their citizens.

I look forward to working with my caucus, Senate Finance Committee Chair J.D. Mesnard, Senate Appropriations Committee Chair John Kavanagh and Senate Government Committee Chair Jake Hoffman to counter the effects of rampant inflation.

Warren Petersen is the Arizona state Senate president-elect for the 56th Legislature and represents Legislative District 14. Reach him at wpetersen@azleg.gov.

This article originally appeared on Arizona Republic: Arizona Legislature can slow inflation's effects. Here's how