Deadlines

By Ryan DeMenna

When it comes to deadlines, educators will tell you there are three types of students: those who complete the assignment early, those who do it late and those who ask to have the deadline extended.

The Arizona Legislature’s annual assignment is an important one: to produce a budget for the coming fiscal year. And you probably won’t be surprised that the legislature almost always struggles to complete this task on time.

The Budget

Interestingly enough, it’s a common misperception that the Arizona State Constitution requires lawmakers to produce a state budget by July 1. While there’s no direct mandate, the concept is embedded within several related provisions and statutes. These statutes – in conjunction with the constitution, create a framework whereby the legislature is responsible for appropriating the funds necessary for the operation of state government.

Regardless, it’s a task that needs to be completed by July 1 to avoid a government shutdown. And this year a shutdown looked inevitable.

Lawmakers in the Arizona State Senate and House of Representatives typically come to an agreement on shared budget priorities and then negotiate with the governor. This session though, the House and Senate couldn’t come to terms on how best to spend a $270 million surplus, so the Senate negotiated with the governor instead.

In the final days of June, when the Senate seemed poised to advance the negotiated proposal, House Republicans plowed ahead with their own version of the budget.

Governor Katie Hobbs declared that budget dead on arrival and voiced her support for the spending plan crafted with the Senate.

So, the House pivoted to a deadline extension.

House leaders announced they would pass a continuation budget to avoid a government shutdown and allow them to continue negotiating beyond July 1.

However, Governor Hobbs said she would veto that budget as well and reiterated her support for the Senate’s spending plan.

The Senate ultimately agreed to advance both of the House’s budget proposals, and both were promptly vetoed by the Governor (who shattered her previous veto record in the process.)

With only one spending plan remaining and a government shutdown looming, the House advanced the Senate’s budget, which was approved by a bipartisan supermajority of House members and signed by the governor – just days before the deadline.

There have also been instances where this critical assignment was completed after its deadline.

In 2009, the Republican-led legislature grappled with Governor Jan Brewer over how to make massive budget cuts during the Great Recession. The budget battle pushed their work late into the night on June 30, with a final budget vote likely to occur after midnight.

So, what did lawmakers do?

They “stopped time”. Former Speaker Kirk Adams ordered the clocks on the House floor to be covered or taken off the wall. This same tactic was deployed years earlier by former House Speaker Jeff Groscost.

In each instance, the state government kept humming along, and aside from those who closely watched the policymaking process, no one knew the difference.

Income Tax Conformity

The Arizona Society of Certified Public Accountants (ASCPA) also has an annual legislative assignment: income tax conformity. The ASCPA works year-round to complete this assignment as far in advance of its deadline (Tax Day) as legislatively possible.

As tax practitioners know, if the state’s tax statutes aren’t updated and aligned with federal tax code changes made in the preceding year, then taxpayers are forced to make assumptions when filing their state taxes. This leads to uncertainty and confusion which results in higher costs, needless complexity and amended returns.

To help ensure swift legislative action, the ASCPA enlists the help of the chairs of the House Ways & Means Committee and Senate Finance Committee to introduce identical versions of the conformity legislation.

After both bills advance out of committee, the ASCPA coordinates with legislative leaders to deploy a rarely used parliamentary procedure that allows a bill in one chamber to be substituted for an identical bill in the other chamber. In other words, the ASCPA engineers a scenario in which the conformity bill is permitted to circumvent half of the legislative process.

The ASCPA’s record for getting conformity signed into law falls on Valentine’s Day 2011. And in an effort to beat that record, the ASCPA had some fun with the holiday theme by asking lawmakers to pass the bill with a Valentine poem:

Before hearts & roses

take center stage,

Let’s pass tax conformity, turn a new page,

No more confusion,

no tangled mess,

Just simpler filings – what a sweet success!

So, on this day,

my valentine true,

Here’s a wish for a smoother tax season for you.

Let’s make it law, let’s make it right,

A Valentine’s gift, in tax conformity’s light.

The legislature ultimately passed this year’s conformity bill in late February, making it the first bill of the session signed by the governor and the second fastest conformity bill to be signed into law.

Completing this critical legislative assignment in record time reinforced the ASCPA as the gold standard for advocacy. With the recent passage of the One Big Beautiful Bill, state lawmakers will be relying on the ASCPA and its members more than ever to tackle next year’s conformity assignment.

The ASCPA Advocacy

Every year, the ASCPA – led by its President and CEO, Oliver Yandle, and its Director of Government Relations, Emily Webb – works tirelessly to ensure that Arizona CPAs are represented and heard in the legislative process. ASCPA annual events like CPA Day at the Capitol provide an opportunity for members to meet with lawmakers and advocate for their profession do just that.

The dedicated volunteers who serve on the ASCPA’s Tax Legislation Review Committee (TLRC), scrub every tax-related bill to ensure the mechanics are in order – helping to avoid unintended consequences if it becomes operational as law. This year alone, the TLRC tracked and scrubbed over 130 bills.

The ASCPA and its government relations team are already preparing to tackle one of the most important legislative assignments to date: CPA Pathways.

For years, the CPA profession has been navigating workforce shortages and the current licensure framework has not kept pace with the evolving landscape of financial and audit standards. In 2026, the ASCPA will partner with state lawmakers to expand the pathways to obtain a CPA license, broaden mobility, and work to preserve a flexible and accessible profession.

The ASCPAs unwavering advocacy efforts have positioned the organization and its members as trusted experts and advisors to legislators and their staff. They know the Arizona Society of CPAs supports good policy and will assist lawmakers with tackling any legislative assignment – well before its deadline.

Ryan DeMenna is a partner at DeMenna Public Affairs which has been supporting the ASCPAs’ advocacy efforts for more than 20 years. To learn more about how you can support our advocacy efforts, visit www.ascpa.com/advocacy.