Mitigating the impact of Proposition 208 on small businesses and restoring public confidence in elections will be among the top goals for the state Legislature this year, said the new chair of the Arizona Senate Commerce Committee.
At the top of the list will be finding ways to help businesses and individuals still struggling from disruptions during the pandemic, said the new Commerce chair, Senator J.D. Mesnard (R-Chandler).
“There will be certain priorities that will be everybody’s priorities like responding to Covid, and one major aspect of that will be how it has impacted our businesses,” said Mesnard, who spoke to Chamber Business News about what he foresees as priorities in 2021.
With Covid-19 shutting down much of last year’s session, lawmakers must scramble to address these and other pressing concerns, he said.
“Because we pretty much hit the road last March when Covid arrived, we really haven’t done much, so there will be a lot of interest about what we can do to help individuals and businesses,” Mesnard said. “There seems to be light at the end of the tunnel with the vaccine, but it still will take months.”
Mesnard, a small business owner, investor and consultant, was named the new chair of the Commerce Committee that oversees regulation and policy important to business and industry.
Topping the list of goals this session will be finding ways to help small businesses, organizations and citizens still struggling to get through the final throes of the pandemic, he said. Expect to see some form of legislation to shield businesses from frivolous Covid-19 lawsuits.
Mitigate damage from Prop. 208
Another most pressing issue this session will be how to offset harm to small businesses and the state from Proposition 208, Mesnard said.
The proposition created a new tax for top earning individuals and couples, but also is expected to affect tens of thousands of small businesses. These are “pass through” entities, meaning they do not file their income taxes as corporations. Instead, they file under the individual tax code.
Under the new law, Arizona’s top income tax rate has jumped from thirteenth lowest in the nation to the ninth highest. The rate jumped from 4.5 to 8 percent, a 78 percent increase, affecting individuals who earn $250,000 and joint filers who earn $500,000. Small business owners who file under the individual tax code are subject to the tax as well.
The new tax rate could have dire consequences for Arizona’s economic health, said Mesnard, who is working with fellow lawmakers, business advocacy and trade groups, and legislative budget staff to find ways to lessen the impact and protect the state’s ability to attract new investment.
“You can’t have the 9th highest income tax rate in the country and the 11th highest combined average sales tax rate and I don’t know what the commercial property tax rate is but it’s got to be certainly in the top half of the country. You can’t have all those things and expect Arizona to be a place attractive to move to,” he said. “So we need to figure a pathway forward.”
Committee members already are starting to look at possible changes in tax policy to “rescue ourselves from the predicament,” Mesnard said. “We don’t want to become a flyover state.”
“We’ll be looking at our whole tax code to look at what would be good tax policy and how we’ll respond to this. Right now we’re in bransoriming mode. There’s no immediate solution. I think it’s a big challenge, frankly.”
Public confidence in county and state elections
With a lot of interest over election integrity, another top objective is to reinstill public confidence in the election system, Mesnard said.
“There’s a lot of people that think the election was rigged or wrought with fraud or irregularities. Others dismiss that entirely,” Mesnard said. “Whether right or wrong, there are lots of doubts and we need to make sure we do everything we can to restore people’s trust and confidence in the election system.”
Mesnard said he would like to see every step of the process analyzed to determine if any changes need to be made to ensure election integrity.
He also introduced a bill that would allow a recount of an election to anyone willing to pay for it.
The bill, SB1010, states that the person requesting a recount would have to file a bond with the Superior Court and pay an amount determined by the court to be sufficient “to provide for full reimbursement of the costs of conducting the recount.”
“This should not be a Republican or Democrat thing. Because if people don’t have confidence in the system, I don’t know a greater existential threat to the democratic electoral process than people who don’t show up to vote, who don’t think it’s real,” he said. “I mean, that’s what you see in other parts of the world. God forbid that type of thing happens here.”
Mesnard home grown
Before being elected to the Arizona Senate in 2018, Mesnard served eight years in the House of Representatives. He was speaker of the House for the 2017–2018 term. Prior to running for office, he spent eight years working at the Arizona Senate where he served as a policy adviser on issues ranging from education, transportation and retirement, to family services and government administration.
Mesnard attended Arizona State University where he earned a Bachelor’s degree in music composition and Master’s degrees in business and public administration.
He helped establish Voices of the World, a non-profit Christian charity that provides humanitarian aid to the poor and destitute of the world. A husband and new father, he lives in Chandler.