Ducey endorses bill protecting small business owners from new tax


PHOENIX (AP) – Arizona Gov. Doug Ducey on Friday signed legislation prohibiting state or local governments from requiring training in “critical race theory” and a bill creating a new category of tax on Small Business Income that will allow small business owners to avoid paying voters in the 3.5% income tax surtax was approved in November.

The new small business tax is expected to cut $ 292 million from the $ 836 million schools would have received under Proposition 208, according to budget analysts in the Legislature. Supporters of the initiative have vowed to block the new law by returning it to a ballot.

He also signed a measure that strengthens state law on sex education and requires parents to give permission for sex-inclusive education in sex education classes.

Ducey vetoed an earlier version of the sex education bill, fearing that it was too broad and vague and that his ban on classes before fifth grade could put children at risk by limiting education to prevention of sexual abuse.

The new version specifically allows for such “good contact, bad contact” teaching and removes a double opt-in for discussions of sexual orientation or gender issues. But it still requires prior parental advice and approval for any discussion of sex-related material outside of sex education classes.

The general requirement would block discussions of historical events with a sexual component, such as the Stonewall riots in New York in 1969, seen as the genesis of the modern gay rights movement, or even the decision of the United States Supreme Court. legalizing same-sex marriage without parental approval. .

“Parents should have the right to know what their children are learning in school,” Ducey said in a statement. “This is obvious legislation that protects our children from learning materials that are not suitable for them. Each family has its own priorities for the education of its children, and parents should have a say.

Republican supporters of the bill say there is a need to strengthen parental rights, while critics say these rights are already in Arizona law and say the bill is an assault on LGBTQ students .

The Republican governor acted on 24 bills from the legislative session that ended last week and faces a Monday deadline to sign or veto the 11 remaining measures. He vetoed a bill expanding the State Emergency Council.

Ducey also signed legislation prohibiting city or county governments from requiring employees to undergo orientation, training, or therapy that suggests an employee is inherently racist, sexist, or oppressive, whether consciously or unconsciously. The state budget he signed last week contains similar language banning schools from teaching critical race theory.

Critical Race Theory is an academic framework that examines history through the prism of racism. It focuses on the idea that racism is systemic in the nation’s institutions and that they work to maintain white dominance in society.

“I am not going to waste public money on lessons that involve the superiority of any race and hamper freedom of speech,” Ducey said in a statement.

Ducey’s signing on the Proposition 208 bypass bill by Chandler GOP Sen. JD Mesnard means that small businesses are no longer subject to the 3.5% surtax on income over $ 250,000 for individuals or $ 500,000 for couples participating in the initiative.

“This tax cut will allow Arizona to remain competitive for the small businesses that already operate here and for new businesses that flock here every day,” Ducey said in a statement. “After such a tough year as the last, we shouldn’t be raising taxes on our small businesses – we should be lowering their taxes.”

Ducey did not mention that the new class of taxes cut much of the money voters wanted from schools by imposing Proposition 208, called the Investment in Education Act. It was a consequence of a statewide teachers’ strike in 2018 that won 20% salary increases but still left teachers among the lowest paid in the country.

Supporters of the measure say the governor and the Republican-controlled legislature are thumbing their noses at voters who wanted the rich to pay more to fund education.

“What people need to understand is that $ 150 million was for teachers ‘salaries, which is what the governor just wiped out,” said Joe Thomas, president of the state teachers’ union. , Arizona Education Association.

“It’s totally disappointing. I don’t know any other way to put it, ”Thomas said. “Teachers worked hard, educators worked hard to get Invest in Ed on the ballot, during a pandemic, voters came to sign these petitions, during a pandemic, to get it on the ballot, and we adopted it. ”

Half of the new tax on the rich will be used to increase graduate teachers, 25% to increase the salaries of cafeteria workers, bus drivers and other support staff, and the rest for teacher training. , vocational education and other initiatives.

Small business income is now taxed at the individual level and is subject to the surtax. Mesnard said supporters of the tax said it would not affect small businesses and some voters who supported the measure disliked how it could affect businesses, but wanted the new revenue to fund the education.

He also said in an interview that he was not worried about voters being fired.

“I’m not worried about it because I think it’s going to be an overwhelming election,” Mesnard said earlier this week. “And then it’s going to be voter protection, which I don’t usually think is good public policy in general, but if it’s about protecting voters by helping small businesses, I could probably make an exception. “

Arizona’s Constitution allows voters to prevent any law passed by the legislature from coming into force by collecting the signatures of 5% of those who voted in the last general election, which this year is estimated to be nearly 120,000. Voters then have the final say in the next general election and can either approve or repeal the bill.

A massive tax cut included in the already signed budget package cuts income taxes by around $ 1.9 billion and protects the rich from the new surtax by keeping their maximum rate at the current 4.5%. The general fund would use hundreds of millions of dollars a year to directly fund the new education spending in Proposition 208, siphoning money that could be spent on other priorities.

Supporters of Proposition 208 are collecting signatures to send tax cuts back to the ballot and plan to do the same with Mesnard’s bill now that it has been enacted.

Thomas said he believed Ducey and the Republican-controlled legislature would face a backlash from tax cuts and other measures they took this year in response to Democratic victories in the November election. The legislature stripped the power of the elected Democratic secretary of state and education chief and is verifying the election results.

“It’s amazing how they try to overthrow the will of the voters in every case possible,” Thomas said. “And I believe there is going to be an account.”


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