Transcript Highlights:

• </c> providers it begins rebalancing that tax providers it begins rebalancing that tax structure<00:04
• When we go to taxes, there will be a slight tax impact, and we'll have to discuss that.
• </c><00:16:03.720><c> impact</c> taxes there will be a slight tax impact taxes there will be a slight
• or asking for um that are cutting taxes or asking for tax<00:20:13.200><c> exemptions</c><00:20:13.679
• tax breaks for particular property tax breaks for particular seniors<00:21:25.279><c> and</c><00:21:

Transcript Highlights:

• and use tax cap.
• County raises their taxes to 2.5 on their sales tax, what about cities? What happens to cities?
• County's property tax, I mean, sales tax.
• And then in another thing, property tax, I mean sales tax.
• A.B. 1768 does not raise taxes. Make it clear: AB 1768 does not raise taxes.

Transcript Highlights:

• Corporate income tax.
• year 2025 income tax forms assume conformity with the HR1 federal tax law changes.
• in the current DOR tax forms.
• laws would be matching what's on the DOR tax forms.
• laws would be matching what's on the DOR tax forms.

Summary: The Finance Advisory Committee met for its January session to review Arizona revenue and economic conditions ahead of the budget process. JLBC staff presented the January baseline, noting projected positive cash balances through FY 2029 and about $577 million to $578 million in discretionary capacity, but also highlighting major unfunded items not included in the baseline, including federal tax conformity costs, ongoing one-time spending for state employee health insurance and school facility repairs, and administrative costs tied to H.R. 1. Staff also reviewed revenue trends by category, saying FY26 general fund revenues were running above forecast overall, with strength in retail, restaurants and bars, and individual income tax payments, while contracting and utility-related collections were weaker or flat. They also compared JLBC and executive revenue assumptions and discussed the executive’s proposed revenue changes, including border reimbursement assumptions, sports betting tax changes, data center-related tax and fee proposals, and other non-general fund measures. A major topic was income tax conformity with recent federal tax law changes. Staff explained that current Department of Revenue forms assume “straight conformity,” but the governor’s proposal and vetoed SB 1106 do not fully match those forms, creating possible amendment and timing issues for taxpayers and the department if the legislature adopts a different policy. Members also discussed the difficulty of forecasting revenues amid volatile monthly collections and uncertainty over how much of the current revenue strength will persist in the second half of the fiscal year. Danny Court of Elliott Pollack gave a broader national and state economic outlook, arguing that the U.S. has avoided recession despite several warning indicators, largely because of AI and data center investment, while employment growth has softened and inflation remains above the Fed’s target. He said Arizona remains relatively resilient, with strong population and job pipelines, but faces housing affordability constraints, slowing employment growth, and a more concentrated population forecast in the Phoenix area. Panelists generally agreed that Arizona remains in better shape than many states, though they cautioned that job growth is slowing, population estimates may be revised, and budget and revenue forecasts should be treated carefully given uncertainty in the data. No votes or formal actions were taken.

Transcript Highlights:

• To the tax notes, Section Two is the certificate of obligation portion.
• We were gonna use tax notes, and we were gonna basically back them.
• Tax notes are backed by full faith and taxation.
• Currently, we use it to stay within our current tax rate.
• As you've heard, there was an abuse of tax anticipation notes, absolutely.

Bills: SB512 , SB1024

Committee: House Pensions, Investments & Financial Services

Transcript Highlights:

• This is our annual tax conformity bill.
• any other state or the Tax Foundation.
• The Tax Foundation has a number of $82 million.
• Okay, so I'm looking at the actual Tax Commission, I mean, excuse me, the Tax Foundation calculations
• Is there this—do you have any comment on the Tax Foundation?

Committee: House Revenue and Taxation

Transcript Highlights:

• I get more tax-related questions as a result of that, having nothing to do with property tax.
• And equalization of property tax. There is a state ...our end and equalization of property tax.
• I own land and I pay taxes.
• What I'm saying is the tax, and the tax burden is on anybody who has land that pays taxes, the burden
• , which is a city sales tax or a county sales tax, or both.

Committee: Joint Tribal and State Relations Committee

Transcript Highlights:

• for that tax year.
• DEADLINE TO CLAIM A TAX REFUND OR CREDIT FOR AT THAT TAX YEAR IS ALSO EXTENDED.
• TO SEND A NOTICE AND DEMAND FOR PAYMENT OF TAX WITHIN 60 DAYS OF PROCESSING A TAX FILING, INDIVIDUALS
• — if you raise tax on capital gains or raise taxes on businesses or raise taxes here — sorry for talking
• OR RAISE TAXES ON BUSINESSES OR RAISE TAXES HERE -- SORRY FOR TALKING SO FAST.

Transcript Highlights:

• , as well as the sub-district's 2% sales tax and 2% hotel occupancy tax.
• The request is for the full sales tax, at least the sales tax that is available for this project.
• The other request is for the general fund tax, the state's general fund tax, currently 1%.
• The local tax, well, the local taxes are also... ...full amount? Correct. State and local?
• It's just the authority's taxes and the economic development district taxes, but yes.

Summary: The committee first adopted the fiscal status statement and five-year baseline summary after a brief discussion about how the baseline percentages are calculated and why projected expenditures exceed revenues in later years, with staff explaining that inflation assumptions drive much of the increase. The Office of Facility Planning and Control then received approval for several items: adding eight higher education deferred maintenance projects, approving a $412,993 change order for LSU’s Jesse Coates Building project, reporting four smaller change orders for information, and combining two Hornbeck water projects into one expanded water plant/well and distribution plan. The committee also approved a two-year extension for UL Lafayette’s Banner ERP consulting contract and approved additional Water Sector Commission funding of $5.5 million for the Tensas Water District Association, with a $100,000 local commitment noted. The most extensive discussion centered on a proposed tax increment financing package for a new 1,000-room Omni headquarters hotel adjacent to the New Orleans Convention Center. Project representatives said the hotel would require about $550 million in private investment, with the authority contributing land and $80 million, and that the package would dedicate state and local tax increments for 45 years after opening. Senators and representatives questioned the structure, the length of the incentive, the expected return to the state, possible cannibalization of existing hotel tax revenue, and why the convention center would receive a 1% stream for so long. Several members said they wanted more information on projected annual revenues and the overall return before voting, and the committee deferred the item to the next month. Later, Louisiana Economic Development requested one-year extensions for two marketing-related contracts with Zender Communications and Graham Group, and the Department of Education sought an amendment to the Odyssey contract for the Louisiana Gator program. The education discussion focused on the per-student cost of $143.50, the use of current enrollment and appropriation levels to set the contract ceiling, the fact that startup costs were no longer included, and the need for continuity before the current contract expires June 30. Members asked for an RFP to be considered for future years and for more information on student outcomes and actual spending. The committee took no vote on the education item during the discussion, and the meeting adjourned after the final exchanges.

Transcript Highlights:

• So I'd like to provide a little bit of information about provider taxes, or health care-related taxes
• the MCO tax specifically.
• There are a few taxes that support Medi-Cal today: the MCO tax, the hospital quality assurance fee, or
• The impact of these new changes on our MCO tax specifically is that our MCO tax is not broad-based, uniform
• So the impact of these new changes on our MCO tax specifically, our MCO tax is not broad-based uniform

Summary: The subcommittee heard a lengthy Department of Health Care Services presentation on the governor’s Medi-Cal budget, including a $229.1 billion total-funds proposal, projected Medi-Cal enrollment declines as redeterminations continue, and several major cost drivers such as managed care growth, Medicare-related costs, pharmacy spending, and changes tied to federal policy. Members focused heavily on the elimination of Prop. 56 dental supplemental payments beginning July 1, 2026, questioning the likely impact on provider participation and utilization. DHCS said it is completing the required rate reduction/access analysis for CMS, has been holding stakeholder meetings and issuing provider bulletins, but could not yet quantify the real-world effect. The committee also discussed a $50 million savings proposal tied to new hospice utilization management authority and asked about possible effects on emergency dental care and provider participation. The hearing then moved through the November 2025 family health estimate and several county and program administration issues, including CCS, GHPP, and Every Woman Counts. DHCS said family health costs are rising despite slight caseload declines because of higher utilization and medical costs, and members raised concerns about CCS website accessibility, county administrative funding, and the transition of youth aging out of CCS. The department said most CCS beneficiaries are also on Medi-Cal, that counties have long raised funding concerns, and that it had clarified use of maintenance-and-operations dollars to address some county workload issues. Members also asked about Every Woman Counts potentially seeing higher demand as Medi-Cal changes take effect; DHCS said that is possible and that the program has multiple funding sources including General Fund. A major portion of the hearing focused on provider taxes and federal changes under H.R. 1, especially the Medi-Cal managed care organization tax and the hospital quality assurance fee. DHCS explained that H.R. 1 restricts new or increased health care-related taxes, phases down allowable tax levels over time, and tightens “generally redistributive” rules, which could sharply reduce the state’s ability to use the MCO tax for Medi-Cal financing. Members asked whether the Legislature could amend Prop. 35 or whether voters would need to act; DHCS said a three-fourths legislative amendment may be possible if it aligns with the measure’s purpose, but the department is still evaluating options. The committee also discussed hospital financing, with DHCS describing recent increases in state-directed payments and the effect of H.R. 1 in capping those payments at Medicare levels, and the LAO noting the tradeoff between preserving provider taxes and maintaining Medi-Cal funding. The subcommittee also reviewed a series of DHCS budget change proposals and trailer bill items, including managed care final-rule implementation, managed care operations, a hospital value strategy, a one-year extension of skilled nursing facility financing, long-term care payment transparency, and interoperability/prior authorization requirements. Members repeatedly questioned the use of limited-term versus permanent positions, the overlap among proposals, and the timing of new financing reforms. DHCS said the SNF extension would preserve current workforce standards, sanctions, growth limits, and the SNF quality assurance fee while the department develops a broader 2027-28 redesign. No votes were taken; items were repeatedly held open for later action. Covered California then presented on the expiration of the federal enhanced premium tax credit and the resulting affordability crisis. The agency said Californians will lose about $2.5 billion in premium assistance for 2026, average premiums could nearly double for many enrollees, and as many as 400,000 people could eventually leave marketplace coverage. Open enrollment ended with 1.9 million sign-ups, down 3% from the prior year, with especially steep declines among middle-income consumers and increased movement into bronze plans. Covered California said the state’s $190 million affordability subsidy is helping lower-income enrollees retain coverage, but cannot fully replace the lost federal assistance. Members also asked about the Health Care Affordability Reserve Fund, repayment of loans from that fund, the status of federal review of California’s essential health benefits benchmark, and implementation of the new gender-affirming care benefit under AB 144.

Transcript Highlights:

• Um, it does addresses blight and tax base loss by moving long vacant tax delinquent properties back into
• </c> to productive use and to the tax roles. to productive use and to the tax roles.
• </c> the tax roles? the tax roles?
• </c> non-payment of taxes. non-payment of taxes. &gt;&gt; Yes. Yes.
• That was our just tax forfeited.

Committee: Joint Municipalities

Transcript Highlights:

• Over half of our state revenue comes from sales taxes, making our tax code one of the most regressive
• Everyday Texans pay more in sales taxes, property taxes, and hidden costs from tolls to medical debt,
• Obviously, the purpose of this H.A.R. is to ban this tax, this transaction tax.
• or transaction taxes.
• for a fair tax system.

Bills: HJR4 , HJR6 , HB195 , HB 13 , HB143 , HB135

Transcript Highlights:

• There is no tax break on In the tax bill, there is no tax break on gas, and we know that our people are
• And it changes the order in which insurance premium tax credits are taken against tax liabilities so
• And it also allows for the tax collector to also waive those commissions on that tax collection.
• If you ask your constituents, would you rather have a tax break on gas or a tax break on guns?
• When you ask your constituents, would you rather have a tax break on gas or a tax break on guns?

Summary: The Senate convened with prayer and the Pledge of Allegiance, then moved to the conference report on House Bill 501E, the General Appropriations Act for fiscal year 2026-27. Budget chairs presented the major spending areas, describing a $114.5 billion overall budget that they said was fiscally responsible and below the prior year’s spending. Highlights included pay increases and retirement adjustments for public safety employees, education funding for K-12, higher education, health and human services, criminal justice, transportation, environmental programs, and agriculture/regulatory agencies. Members then questioned chairs on several items. In education, senators discussed K-12 declining enrollment funding, teacher salary set-asides, private school scholarship spending, mental health funding, preeminence funding for universities, the Hamilton Center at UF, and charter school PICO funding. In health and human services, questions focused on the iBudget waiver waitlist, provider rates, ADAP/HIV funding and the return of Biktarvy to the formulary, KidCare, rural health funding, SNAP-related IT and error reduction efforts, and the IDD managed care program. In criminal justice, senators asked about correctional officer pay, prison staffing and infrastructure, air conditioning in prisons, juvenile justice facilities, law enforcement recruitment, and court system funding. Environmental and transportation questions covered Florida Forever, water quality, state parks, water projects, housing, elections funding, and emergency management. Several specific actions and explanations were given during debate: the budget includes $8.8 million for state attorney competitive area differentials but no funding for public defender CAD requests; assistant state attorneys will start at $70,000 and assistant public defenders at $65,000; the battery disposal issue was described as a temporary study/preemption approach; and the Senate said the budget does not fund Medicaid expansion, preeminence funding, or the SunBucks Summer EBT state share. Senators also noted that some proposals discussed in committee did not make it into the final budget. The transcript ends with debate statements from members praising the budget process and Chair Hooper, while also expressing concerns about public schools, health care access, affordability, and the lack of funding for certain priorities.

Transcript Highlights:

• And you will raise your property taxes.
• I will go back to my tax expert and ask why.
• Okay, so it's Tax and Revenue.
• How it affects from a tax standpoint?
• , a tax standpoint.

Committee: House House Agriculture, Acequias And Water Resources

Transcript Highlights:

• of action related to the sale of tax-delinquent land.
• The money that we pay in property taxes widely goes to schools.
• I know some members just don't like property taxes.
• tax paid.
• Tax collector.

Committee: All JBC-CLAIMS REVIEW/LITIGATION REPORTS OVERSIGHT SUBCOMMITTEE

Summary: The Joint Budget Committee’s Claims Review and Litigation Reports Oversight Subcommittee met to consider two proposed Department of Corrections litigation settlements and one appealed claim from the Claims Commission. The first settlement, Caroline Arnett v. Larry Norris et al., involved allegations of long-term sexual abuse by a corrections employee. Committee members asked about PREA audits, facility practices, and whether the inmate had been placed at the proper facility. The department said audits and other safeguards were underway, and the committee approved the settlement. The second settlement, Latasha Ridgel v. Arkansas Department of Corrections, also involved sexual harassment/assault allegations. Members questioned the seven-year delay in the case and whether the issue was systemic; the department cited attorney turnover, COVID delays, and legislative changes making inmate exposure a felony. The committee approved that settlement as well. The committee then heard an appeal in Sharon Greer and Deanna Hayes v. Commissioner of State Lands, a denied and dismissed claim involving a tax-delinquent sale of family property in Crittenden County. Staff and the Commissioner of State Lands’ office said the property was certified in 2000, sold in 2009 after notice was sent, and that excess proceeds were available for a limited period before escheating to the county. The claimants argued they were not properly notified of the sale or the excess proceeds and only learned of the matter in 2025 after receiving the deed at a family funeral. Committee members discussed the notice process, statute of limitations, and the handling of excess proceeds, with several noting the issue may call for legislative review rather than relief in this case. After debate, the committee voted to affirm the Claims Commission’s dismissal of the Greer/Hayes claim. Members also discussed broader concerns about how excess proceeds from tax sales are handled and whether the current statutory process should be revisited in future legislation.

Transcript Highlights:

• </c> to offset property and income taxes. to offset property and income taxes.
• in property taxes.
• The bill is effective with tax assessment year 2026 or taxes payable 2027.
• , taxed at the residential rate.
• /c><01:10:01.360><c> residential</c> taxes become taxed at the residential taxes become taxed at the

Committee: Senate Taxes

Transcript Highlights:

• This amendment would modernize the Tax Reform Code by taxing digital ads.
• This is a corporate revenue tax, not a tax passed through to families.
• Today we can eliminate the tax exemption on big tech and use the revenue to offset the gas tax.
• In essence, the taxes data centers will pay will offset our gas tax.
• Pennsylvania won't be paying that gross receipts tax because basically we're taxing ourselves.

Transcript Highlights:

• So, we do tax those.
• So, we do tax those.
• So, we do tax those.
• </c> and they are taxed.
• They are taxed at and they are taxed.

Bills: SF0024

Committee: Senate Travel, Recreation, Wildlife & Cultural Resources

Transcript Highlights:

• There is a provider tax that is paid by hospitals. And through that tax, we...
• Chair, Senators, so the taxes continue to get paid to all the taxing authorities as they were originally
• So the argument for, I think, the taxing authorities is you will receive a very large tax increase when
• Redeemable, or is this just a straight tax credit to income on income tax?
• Senator, yes, this is now a refundable tax credit for those that don't have tax liability.

Bills: SB101 , SB58 , SB55

Committee: Senate Senate Finance

Transcript Highlights:

• </c> one of my members uh on the sales tax one of my members uh on the sales tax and<00:08:02.599><c>
• </c> so whatever's not paid in in sales tax so whatever's not paid in in sales tax here<00:08:45.080>
• </c> and impacted by tax and impacted by tax increment<00:41:14.000><c> um</c><00:41:14.160><c> they<
• It is not because of tax increment financing that we have not had a tax bill.
• It is not because of tax increment financing that we have not had a tax bill.

Committee: Senate Taxes

Transcript Highlights:

• And um I think that tax liability.
• for</c><00:04:19.600><c> corporations</c> refundable tax credits for corporations refundable tax credits
• repurposing the ballpark tax.
• </c> an a boost to the child tax credit. an a boost to the child tax credit.
• </c> be affordable for our local tax base. be affordable for our local tax base.