Gov. Katie Hobbs' goals, lines in sand as legislative session begins

PHOENIX — Democratic Gov. Katie Hobbs says she is “optimistic’’ about working with the Republican-controlled Legislature as she gives her second State of the State speech on Monday, Jan. 8.

Hobbs acknowledged what she called “the divisiveness and the vitriol’’ of the 2023 legislative session. That included her record-shattering 143 vetoes — she nixed more than 40% of the bills sent to her desk.

But she added, “I think we’ve proven that we can work together on important things.”

In an interview with Capitol Media Services, however, Hobbs already is sending messages to GOP lawmakers they would be sadly mistaken if they think her willingness to cooperate and all that optimism means she’s willing to give her blessing to many of their programs in the name of cooperation.

“I’m going to continue to keep my promise of vetoing legislation that doesn’t protect fundamental freedoms or solve tough problems,’’ Hobbs said. “So if that’s what they want to send me, that’s what I’ll keep on doing.’’

Lines drawn

She already has a list of what will end up meeting her well-used veto stamp, saying she’s prepared to break her own record if it becomes necessary.

Election law changes?

Hobbs said she wants to solve a problem created by a change in federal election laws that ultimately could result in the state not meeting the deadline for submitting the results of the 2024 presidential race, which would mean Arizona’s 11 electoral votes would not be counted.

But the governor made it clear she will not accept any fix it if it is tied to various other changes that some are pushing under the banner of election integrity, ranging from hand counting of ballots, to who gets an automatic early ballot, to new signature verification requirements.

“I’m not going to sign something that’s bogged down with a bunch of other stuff that the Republicans want on this,’’ she said.

Hobbs also said she is ready to use her veto stamp — again — to deal with “culture wars’’ measures advanced by some GOP lawmakers, ranging from banning the teaching of so-called critical race theory, to barring the use of public funds for diversity, equity and inclusion programs.

She also said she has no interest in signing legislation being pushed by some GOP lawmakers to block the citizens and corporations of certain foreign countries from leasing or owning farmland in Arizona.

She called it unnecessary, noting the state is already terminating its leases with Fondomonte, a Saudi company growing alfalfa in La Paz County for dairy farms in the kingdom. She said such decisions can be made based on deciding what is the “highest and best use’’ of state land — and without regard to the nationality of the tenant.

Whether the governor gets a chance to break her veto record this year will largely depend on the actions of the Republican legislative majority and, more to the point, whether they are just voting to send measures to her knowing she will reject them.

“There’s a lot less interest this time around in just sending a bill out just to get a veto,’’ said House Speaker Ben Toma, a Peoria Republican.

“I think it’s pretty clear at this point where everybody is politically on some hot-button issues,’’ Toma said. “So there’s really no reason to continue that.’’

Senate President Warren Petersen said there’s been no formal decision made by his caucus. But it has been discussed.

“We have talked about the obvious, which is: same product, same people, same outcome,’’ said the Gilbert Republican.

“I don’t know what members are going to do,’’ he continued. “But I feel like you won’t see as many of the same bills introduced.’’

Still, Petersen said that doesn’t mean he will use his powers to sideline legislation by other GOP lawmakers just because it might be a sure-fire veto.

“If there’s a reason or a benefit for them where they feel like they want to continue to push their bills, if their constituents have asked them to run a bill or push a bill, that’s a member decision,’’ he said.

Vouchers dispute

But Hobbs, even before the session begins Monday, is already picking a fight with the GOP majority.

She announced last week a list of changes she wants in the system of universal vouchers that allows any student to get taxpayer funds — the typical grant is $7,300 — to attend private or parochial schools or have home-schooled children use the money for other educational expenses. She was unapologetic.

“I don’t think this is a new fight,’’ she said, noting she was a first-term lawmaker when the whole concept of vouchers became Arizona law in 2011. At that time, it was limited to students with special needs. Since then, eligibility was steadily broadened to youths in foster care, reservation residents, students attending schools rated D or F. In 2022, the Legislature removed all restrictions.

“And one of the things we said is, this is the camel’s nose under the tent, it’s going to keep expanding every year until we get to this point,’’ Hobbs said. “And here’s where we are.’’

She is not the only one spoiling for a fight.

Hobbs is being sued by the state Senate over her maneuver to convert all of her agency directors — the ones the Senate has failed to confirm — to deputy executive directors, a move she said allowed them to continue to serve despite legislative inaction.

Petersen claims that violates state law, but Hobbs said she is ready to do battle.

“We will be filing a motion to dismiss their very flimsy lawsuit against us,’’ she said.

“Arizonans want sanity, not chaos,’’ Hobbs said. “We need state government to run well and state agencies are a key part of that.’’

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Water legislation

Still, she does have some things in her own basket of ideas she hopes will get legislative approval.

One of the biggest issues is water.

The most visible part of the problem has been in rural areas. They are exempt from the provisions of the state’s 1980 Groundwater Management Act designed to achieve “safe yield’’ to the point where the amount of water being pumped is no greater than the rate of recharge. The lack of regulation is causing particular problems in Mohave County, where Kingman officials are questioning whether the pumping by agriculture in the basin will leave the city without the water it needs.

Current law allows residents to vote to form their own “active management area’’ to control pumping. Residents of the Douglas area did just that in 2022.

But a similar plan for Willcox failed. So Hobbs is weighing a proposal advanced by her Water Policy Council that would authorize setting up state-designated but locally run rural groundwater management areas.

“I don’t think we’re trying to dilute the process,’’ Hobbs said.

She also is looking for a workaround to the decision last year of the Arizona Department of Water Resources to deny new housing permits to developers in areas of Buckeye and Queen Creek, lands within the Phoenix Active Management Area that could not show the legally required 100-year assured water supply. That resulted in national headlines about whether Arizona was running out of water.

The governor defended the department. “The national sensationalism aside, ADWR was following the law,’’ she said.

But Hobbs acknowledged that the status quo is unacceptable. She is throwing her support behind another Water Policy Council recommendation for an interim solution: To allow developers to continue their work based on the use of “alternative water supplies,’’ but without the state gutting the 1980 Groundwater Act.

One key benefit of that idea is it doesn’t require legislative approval.

Affordable housing

The issue of the building moratorium in Queen Creek and Buckeye is closely tied to the issue of affordable housing.

“We are in a housing crisis,’’ Hobbs said. “One part of the solution is to build more housing. So we’re trying to find a short-term way for that to continue.’’

Still, that deals with just one issue — and in just one area of the state.

Hobbs managed last session to get lawmakers to put $150 million into the state Housing Trust Fund. Those dollars can be used to leverage federal cash to construct affordable housing.

More changes are needed, she said.

“You’ll hear a proposal in our State of the State around mortgage assistance which obviously is not going to assist in building new houses but (is for) first-time homebuyers and middle-class families that are being priced out of purchasing homes right now,’’ she said.

Even leveraging the Housing Trust Fund, Hobbs acknowledged, might not provide a lot of relief in a market where median home prices exceed $500,000 and mortgage rates are hovering close to 7%.

“It buys some (relief),’’ she said. “It’s clear that Arizona needs relief right now and there’s more that can be done. We’re utilizing the tools we have at our disposal right now.’’

Hobbs also said she is a fan of the actions of some cities, including Phoenix and Tucson, that have authorized the construction of small “accessory dwelling units’’ — also called casitas — adjacent to existing homes that can be rented out, regardless of zoning.

Still, she said she might warm up that veto stamp if lawmakers seek to impose similar requirements on all cities and counties statewide.

“I’ve never been a fan of usurping local control,’’ Hobbs said.

She also has been cool to some other efforts to override local regulations such as “zoning by right,’’ which would have allowed some landowners to convert the use of their property from how it was zoned to something else without having to first get city approval.

Raises for teachers

Hobbs also has her own plan to raise educators’ salaries.

It is similar to what Republican lawmakers proposed last year, extending the life of Proposition 123, which allows the state to tap the proceeds of the state land trust. The GOP legislative leaders promise $4,000 pay hikes for teachers.

Hobbs said that doesn’t go far enough.

“We have a proposal that addresses not just teacher pay but more broadly educational support professionals as well,’’ she said, people like librarians, aides and counselors left out of the Republican plan. “They’re part of the equation.’’

She said there are ways of adjusting the annual withdrawals from the land trust to generate enough money for all of that.