Legislative Update
Out with the Old .. In with the New
by Lori Lustig
The new year has arrived! Bringing anticipation of a new administration with President-Elect Obama, we anxiously await a transition of our own in Arizona since Governor Janet Napolitano has been tapped as Director of Homeland Security and awaits confirmation by the U.S. Senate following Obama's inauguration on January 20. Because Napolitano is familiar with our issues of unsecured borders and undocumented workers, there is a good chance that during her so tenure we will see policies that will address our immigration/guest worker needs and concerns. Homebuilders could have a sizeable, legal labor pool to draw upon when the economy recovers.
Another important issue to Arizona homebuilders is the current re-mapping of floodplains by FEMA, which folded into Homeland Security after Hurricane Katrina. While Arizona does not typically have hurricanes and other weather-related natural disasters to which FEMA responds, the organization is responsible for updating floodplains nationwide. Floodplain re-mapping is a real concern as it relates to your current and future ability to develop local land tracts for residential growth.
The town of Marana and homebuilders doing business there found this out the hard way in late 2007. With the assistance of U.S. Senator Jon Kyl and U.S. Rep. Gabrielle Giffords, homebuilders were given a reprieve to work things out with FEMA; otherwise, all residential and commercial construction would have come to an immediate halt. The dialogue is still ongoing, and FEMA's decisions could have resounding effects for years to come in some of our regional communities. It can't hurt Arizona to have a friend at the top.
With a looming budget shortfall in fiscal years 2009 and 2010 and a new governor mid-term, what can Arizona expect at the state level? Jan Brewer will be the eighth Arizona secretary of state to ascend to the seat of governor. A number of years ago, voters resoundingly defeated a ballot initiative to create a separate position of lieutenant governor for just this circumstance. While the secretary of state is not a governor-in-waiting position, the secretary is routinely in charge if the governor is unavailable due to travel, sickness or other reasons. This time, there will be a change in party affiliation with the transition.
There is a lot of speculation of what this change at the top-most level in the state will mean for current programs and policies. With state house and senate leadership solidly in Republican control, the conservative fiscal approach may be more visible given the decrease in state revenues. Governor Napolitano's approach for the past two years, as well as in this current shortfall, has been to defer payments into the future or borrow against future revenues such as payday loans. She is also known for her "funds sweeps," or cleaning out funds held by the Registrar of Contractors for consumer disputes and complaints.
Republicans, on the other hand, will likely want to cut unnecessary spending. Defining "unnecessary" will be the key. Fortunately for homebuilders, Jan Brewer has the support of our industry and should be open to dialogue concerning our issues.
Secretary Brewer is not new to government or to government budgets. As a past Maricopa County supervisor and former chair as well as a former member of the house and senate in the state legislature, a portion of her years of public service was during difficult economic times. Secretary Brewer is considered pragmatic, so while she will sign some budget cuts into law, she is expected to do so after careful deliberation, and it is doubtful she will slash and burn.
Although 35 percent of the overall budget for programs is voter protected, the increases over the past years are not; expect to see some agency budget rollbacks. Also of interest will be Brewer's agency and staff appointments. Key for homebuilders will be those affecting construction, green building and energy efficiency, and housing.
Normally, this would have been the start of a lame-duck period for a governor whose term is over. But with Jan Brewer able to run for election from this seat in two years, it should both increase and temper activity from the governor's office. The next few months will tell us whether this activity will favor the homebuilding industry in our state.
Lori Lustig, RN JD, is a State Lobbyist who has represented Arizona homebuilders' associations at both the state and municipal levels.
