Gov. Hobbs vetoes bill that would have eliminated rental tax

PHOENIX (3TV/CBS 5) — Gov. Katie Hobbs used her veto pen again on Thursday, this time over taxes. She rejected SB 1184, which would have removed rental taxes across the state. Hobbs said there isn’t a way to ensure the savings are passed onto the renters. In addition, she said the part of the bill that requires the relief not be given to the landlords is unconstitutional. “If we are going to promise relief to renters, it’s important that we are able to ensure they actually receive it. For working families faced with ever-increasing rental prices, this proposal just doesn’t fit the bill,” Hobbs said in her veto letter.

Seventy cities and towns in Arizona have a rental tax, including Phoenix, Mesa and Gilbert. Supporters said relief for renters was necessary since rent has gone up significantly. All Republicans and one Democrat passed the bill in the state Legislature. Supporters said the measure would have saved tenants between $20 and $200 per month. State Sen. Steve Kaiser, a Republican from Phoenix, said the tax was a bad policy since it targeted one group of people. He also rejected Hobbs’ premise that the tax cut affected only landlords. He said Hobbs’ plan to eliminate taxes on diapers and feminine hygiene products would then only help grocery stores, not consumers. “Grocery stores, just like landlords, collect and remit tax paid for by consumers. Unlike Hobbs, our citizens don’t have the luxury of falling back on the semantics of tax collection, they feel the hurt of onerous taxation in their wallets,” Kaiser said in a statement.

However, opponents said with the lack of revenue from the rental tax, cities and towns would have to make cuts to services like first responders or parks and recreation or increase taxes in other areas. This is Hobbs’ 14th veto so far this year.

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