Officials from the town and the Gilbert Chamber of Commerce are preparing for the 2019 legislative session with water and education looming as large issues with effects that will be felt in town.
Other issues could emerge—“Until you see what hits, we never really know,” Gilbert spokeswoman Jennifer Alvarez said—but each group is keeping an eye on certain items.
While some may be handled as broader state or regional issues, the effects are still important to Gilbert. Chamber President and CEO Kathy Tilque used state education funding as an example.
“Our members are very engaged in the community,” Tilque said. “[Education is] a community issue, and so that’s one reason it would raise to the top.
“The other piece is that we understand that we’re the beneficiary of a good education system.”
Heading into the session, here are some of the items the town and chamber identified as ones they will be watching.
Gilbert also is part of the Phoenix Active Management Area. That is an area that without intervention actions from a drought plan probably would deplete its water resources, Gilbert Intergovernmental Relations Director René Guillen said.
Gov. Doug Ducey announced a proposal to put $30 million into an effort to stabilize water levels at Lake Mead. The lake is one of the Colorado River’s reservoirs critical to supplying water to the Southwest. Arizona, Nevada and California officials are also grappling with a drought-contingency plan for the river’s lower basin.
State officials want to solve the issue because if the drought causes the level to go too low in the lake, the U.S. Bureau of Reclamation will take over. The bureau would then decide what to do with the water, Guillen said. The states, Guillen said, would prefer to come up with their own solutions and keep control locally.
Discussions among the members of the state’s drought-contingency plan steering committee have moved away from asking cities to waive some of their water rights, according to Gilbert Town Council Member Eddie Cook at the Dec. 6 council meeting.
“From a municipal perspective and from a Gilbert resident perspective, that should give you more confidence that those other resources that we have secured will remain secure into the future,” Guillen said. “From a town perspective, that’s really what we’re going to be looking at—to protect and preserve.”
Protecting that supply would mean Gilbert would continue to be able to certify with the state that it has a 100-year assured water supply. Without that certification, Gilbert would not be allowed to continue on its growth path toward build-out, Guillen said.
The U.S. Supreme Court in South Dakota v. Wayfair in June found that states may charge tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state.
Guillen said states and municipalities watched that case carefully. It is an issue of fairness to brick-and-mortar stores that are creating jobs and adding to the local economy, he said.
He used LetterCraft, a small local store that makes handcrafted wood products, as an example.
“LetterCraft has made the choice to locate in Gilbert,” Guillen said. “So they are investing in our local economy. They are creating jobs in our local economy, and yet they’re at an economic competitive disadvantage to ‘e-LetterCraft.com’ that has made no investment. They’re not creating jobs, and yet they’re getting the better tax rate.”
Taxing such entities also helps municipalities like Gilbert broaden the tax base and keep rates low. The town has a 1.5 percent sales-tax rate.
The Legislature may consider what the threshold for taxation in the state is. That is what the South Dakota law that e-commerce company Wayfair challenged did, Guillen said. He added the town has no specific thoughts on the threshold but is open to the discussion.
He did caution that people may be “over-predicting” the impact of what those tax revenues will be.
For example, he said some special-interest groups might consider the possible windfall as a reason for a tax cut before seeing what the actual revenues are.
Home-sharing businesses like Airbnb, VRBO and HomeAway have come under scrutiny as people advertise renovated homes. Some homes have been turned into something like a mini-hotel or, as Gilbert has seen recently, used to rent homes out for special events.
Residents in a Circle G Ranch community recently complained to Town Council about one such home being used for special events.
Mayor Jenn Daniels, however, told the residents the town’s hands were tied by state law protecting the property owners.
Guillen said municipalities would like a law that would allow the sites to stay true to their original purpose—renting a spare room or a home while away. That could give the town tools to combat properties that create neighborhood issues.
Chamber of Commerce
Tilque said that while education is top of mind for the chamber, election reform is its key initiative. She said Arizona’s low signature threshold for propositions to get on the ballot allows outside corporations, groups or people with substantial monetary backing to bring their agenda to Arizona.
“What’s happening is we’re changing laws not based on what Arizona people want,” she said.
Tilque used Proposition 127 on renewable energy, which failed on the November ballot, as an example of a ballot measure that came from parties outside the state. California billionaire Tom Steyer’s NextGen Climate Action nonprofit group largely financed the campaign for the proposition.
The proposition would have required the state to get 50 percent of its energy from renewable sources by 2030.
Conversely, Proposition 305 to repeal the Legislature’s Empowerment Scholarship Accounts expansion was a grassroots effort. In that case, public-school educators within the state organized to put it on the ballot.
The next step for education funding goes beyond meeting the promises made in the 2018 legislative session for additional money for teacher salaries and restoring District Additional Assistance for capital needs. Instead, funding education is about long-term sustainability, Tilque said.
“I believe that everybody down there [at the Capitol]wants to adequately fund education,” she said. “I think where we start getting into problems is how’s [education]going to be funded? You can’t make a commitment to just take this money out of the general fund for years to come if you don’t know if you’re going to have that money in the future, which is why we got in this position with the recession.”
The regional tax for new roads and road maintenance from Proposition 400, which passed in 2004, will go away in 2025. That proposition gave a 20-year extension to a half-cent sales tax for transportation projects in Maricopa County.
Tilque said the chamber would like the Legislature to give the county the authority to put a renewal proposition on the ballot.
The chamber is working closely with other East Valley cities and chambers on the issue, Tilque said.
“That’s going to be an issue of how do we move the needle on that discussion,” she said. “The regional tax will take care of Maricopa County, but it doesn’t take care of the state. … That’s finding another long-term sustainable funding source to ensure that our roads are keeping up with the demand and our growth and that they’re safe.”