From the Chamber Notebook: Pension, legal and statewide assessment reforms emerge in legislative session

Glenn Hamer

February 5, 2016

Public pension reform package the product of hard work by all sides.

State Sen. Debbie Lesko is a warrior. The senator from Peoria for nearly a year has taken on a challenge that many considered an impossibility: getting public safety unions, their pension system and state and local policymakers to agree on reforms to the public safety retirement system that would ensure its continued viability while protecting taxpayers. But at the outset of the 2016 legislative session, we are one step closer to realizing that goal.

Thanks to Sen. Lesko’s leadership, a package of bills has emerged with broad, bipartisan support that will send to voters needed reforms that will allow us to keep our promise to law enforcement and public safety retirees, ensure a solvent system for today’s workers, and prevent state and local governments from choosing between two bad options: cutting vital services, or dramatically raising taxes.

Working hand in hand with the excellent team at the Reason Foundation, which includes nationally recognized reformer Len Gilroy, and representatives from the public safety unions, Sen. Lesko has taken a sound, thoughtful approach to pension reform.

Nearly six years ago, the Arizona Chamber Foundation published the policy brief entitled Pension Tension, which assessed the effect rising pension obligations had on government budgets. That influential paper called on policymakers to recognize the threat of growing liabilities and to implement meaningful reforms. Sen. Lesko has heeded that call to action with a zeal rarely seen on issues as tough as this one.

Sen. Lesko’s bills cleared their first hurdle by passing out of the Senate Finance Committee. The bills are not without their critics; it’s easy to take potshots from the sidelines. But Sen. Lesko is proving true the adage that politics is the art of the possible. This is a good deal, and it deserves swift passage and the approval of voters.

The package of bills including SB 1428, SB 1429, and SCR 1019 all received unanimous support from the Arizona State Senate and is on its way to the House where Sen. Lesko has vowed to see it though. As Bob Robb rightfully pointed out, “Sen. Lesko mother-henned an impossibly broad coalition to explore solutions” proving that “politically, it is a huge breakthrough, potentially of national significance.”

Bills seek to reform unclaimed property audits and more.

We at the Arizona Chamber have taken pride in being the state’s top advocate for civil justice reforms that will make our state more attractive to job creators. We are driven by the belief that businesses should spend more time investing and innovating than they should fending off meritless litigation. Our legislative wins over the years include reforms that protect a defendant’s ability to a robust defense, that ensure the proper application of punitive damages, and that limit runaway class action lawsuits.

This session, the Chamber is supporting a suite of legal reforms that will only strengthen our jobs-friendly legal environment reputation:

  • Unclaimed property audit reform. The Chamber is working with Rep. David Livingston to pass legislation that would prevent the Department of Revenue from entering into contingency fee contracts with third parties in unclaimed property audits. Unclaimed property can include everything from uncollected paychecks, to unreturned security deposits, to abandoned safety deposit boxes to life insurance policies for beneficiaries who can’t be located.
  • State statute bars contingency contracts for other types of audits and collections. We should treat unclaimed property audits similarly. There are too many examples from around the country of abusive audits that have been more about scoring big wins for the auditor than about reuniting property with its rightful owner. This reform is a major priority for national groups like the U.S. Chamber of Commerce’s Institute for Legal Reform and COST, the Council On State Taxation.
  • Expert witnesses in arbitration. The Chamber has successfully supported initiatives in previous legislative sessions to raise the bar for the admission of testimony by expert witnesses in civil cases. We believe a similarly high standard should be extended to cases in arbitration, which would be accomplished if legislation sponsored by Sen. Adam Driggs gets signed into law this session.?
  • Vexatious litigants in workers’ compensation cases. A bill passed into law last session sponsored by Sen. John Kavanagh and supported by the Chamber sought to prevent litigants from using the court system simply to harass the other party. A bill by Sen. Kimberly Yee this year would extend that same treatment of vexatious litigants to the workers’ compensation arena. Our legal system should be used to deliver justice for all sides, not as a tool for harassment.
  • Rules of procedure. The reality of today’s civil litigation environment is that most battles are fought not in the courtroom, but in the discovery phase. The potential for abuse and harassment at this phase is tremendous. That’s why, in addition to our legislative efforts, we are engaging with the courts to offer constructive changes to the state’s rules of civil procedure.

What’s on the menu in education policy? Assessment choice.

Kudos to Rep. Paul Boyer and Sen. Sylvia Allen for injecting choice and even an element of regulatory reform into the statewide achievement assessments taken by students in the state’s K-12 system. They are each sponsoring bills that would allow the state Board of Education to develop a menu of assessments available to districts and charters. Rep. Boyer and Sen. Allen are honoring local school models and reducing duplicative testing, while maintaining accountability.

The Chamber believes that we must have assessments that are aligned with our rigorous education standards. AzMERIT is a good assessment and a major upgrade over the old AIMS test. But it’s not the only exam that can determine a student’s readiness for college. If students are taking and passing exams like those aligned with Advanced Placement (AP) courses, or Cambridge or International Baccalaureate, then additionally requiring those students to take AzMERIT should be unnecessary.

The results from tests like the ACT can easily be compared to the AzMERIT and factored into a school and district’s overall letter grade. We need good tests, not more tests.

Positive progress on CTE funding.

Last month, the Arizona Chamber led a coalition of more than 50 business and education organizations in submitting a letter to the legislature calling for full restoration of funding. Yesterday, I had the pleasure of being the keynote speaker at the ACTEAZ and ACOVA Mid-Winter Conference in Prescott, to discuss value of these programs to the state’s business community. There, Tina Norton of the Pima County JTED offered a fantastic legislative update on the state of play, and the deal legislative leadership has been diligently working towards to restore CTE funding. Tina deserves high praise for her patience and perseverance in working with a number of others on behalf of the JTED community to reach this resolution. The bill in the Senate has already been dropped and we expect to see one in the House early next week.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce