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SB1087 Helps Hardworking Arizonans by Ending Onerous Overcollection of Licensing Fees

February 15, 2023

Arizona has led the nationwide charge for employment opportunity, following the Goldwater Institute’s blueprint for getting government out of the way. But while Arizona has continually made it easier for residents to exercise their right to earn a living in the profession of their choice, many workers still face a significant barrier: the cost to obtain and maintain an occupational license.

That’s why lawmakers should act quickly to pass SB1087, a  reform that stops occupational licensing boards from over-collecting licensing fees from hardworking Arizonans, many of whom are struggling just to make ends meet.

Occupational licensing boards collect their operations expenses through initial application and renewal fees paid by licensees. Those fee amounts are set in rule or statute, and the legislature then gives the board an appropriation for their annual operating expenses. Fund balances in some occupational board accounts are exponentially higher than their annual appropriation. However, since these boards are subject to the appropriations process, there is no way for them to draw these balances down.

For instance, Arizona’s Joint Legislative Budget Committee estimated the Board of Cosmetology’s ending fund balance for 2021 to be $12 million, while its appropriation is only $1.8 million. This means that current and prospective licensees are paying the government money that can’t be spent. As a result, the money just sits in the board’s account and rolls over from year to year, while many licensees struggle to pay for licensing costs just to keep working.

Additional 2022 JLBC figures for Arizona Occupational Licensing Boards

Est FY 21 Ending Balance FY 21 Appropriation Balance as % of Appropriation.
Occupational Therapy $857,200 $204,700 419%
Cosmetology $12,703,700 $1,897,400 670%
Dental Examiners $3,707,700 $1,261,200 294%
Massage Therapy $1,369,700 $486,100 282%
Pharmacy $8,487,100 $2,689,600 316%
Veterinarian $3,441,300 $618,300 557%

But SB1087 solves this problem. Under this legislation, if a licensing board’s fund balance exceeds 50% of its annual appropriation, it can adjust—by either temporarily reducing or fully eliminating—the collection of fees. The act still allows boards to budget and include large one-time expenditures for things like IT upgrades. However, it mandates that boards or agencies shall attempt to ensure that all existing licensees receive one fee waiver under this provision, while not impacting the board’s appropriated funds or operating costs.

For years, Arizona has spearheaded the nationwide movement to empower experienced, trained professionals to work in their chosen trade. Our state was the first in the nation to enact landmark Goldwater Institute reforms like the universal recognition of occupational licenses, which allows licensed professionals to get to work quickly when they move to the state; the Right to Earn a Living Act, which lets Arizonans petition an independent commission when they feel that a board or commission has acted outside its statutorily permitted authority; and a groundbreaking telehealth reform that allows Arizonans to access high-quality virtual medical care from the comfort of their own home.

But there’s work to be done—and that’s why we need SB1087. Arizona still has one of the highest inflation levels in the nation, and many people are struggling to make ends meet. By ending licensing boards’ overcollection of fees, SB1087 helps ease some of the financial burdens on licensees at a time when such relief is needed the most.

Jenna Bentley is the Director of Government Affairs at the Goldwater Institute.



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