AZ HB2221

Prohibits cities and towns from reducing the annual operating budget for municipal police departments below the previous year's amount.

Requires state treasurer to withhold state shared revenues from cities and towns that reduce law enforcement budgets, in an amount equal to the reduction, until the budget is restored.

Exempts budget reductions if the city or town lacks sufficient funds, reduces all departments equally or more, has no population growth, or is restoring a temporary previous-year increase.

Establishes law enforcement funding as a matter of statewide concern that supersedes local regulation and charter city provisions.

Amends Arizona Revised Statutes sections 42-5029 and 43-206 to authorize state treasurer withholding of transaction privilege tax and urban revenue sharing fund distributions for non-compliant municipalities.