Ignoring veto threat, House speaker pushes zero-growth Arizona budget

PHOENIX — Ignoring a veto threat, House Speaker Steve Montenegro introduced his own zero-growth spending plan Monday for the new fiscal year that begins July 1.

The Goodyear Republican said the $17.6 billion state budget plan negotiated among Democratic Gov. Katie Hobbs, Senate Republicans and Democrats from both chambers is irresponsible. He also said there aren’t enough votes for it from House GOP members.

So what is now scheduled for a House vote Wednesday is Montenegro’s $17 billion spending plan. That’s basically what the state is spending this fiscal year, plus a few adjustments, said Rep. David Livingston, who chairs the House Appropriations Committee.

Montenegro indicated he’s willing to add some funds if Hobbs agrees to something the House GOP considers more reasonable than the budget plan she wants. But with time running out — a new budget must be adopted before July 1 to keep state government open — he wants something in place while those negotiations take place.

How far Senate Republicans are willing to go to deal with House GOP objections remains unclear.

On one hand, Senate President Warren Petersen voted for the $17.6 billion plan. He has defended it as perhaps the best deal to be had given that the Democratic governor has the last word with a veto stamp.

However, Petersen indicated he’s willing to see what the House passes, though he is making no commitments.

None of that will matter if Hobbs follows through with her promise to veto it. And if no one blinks by July 1, that sets the stage for an unprecedented fiscal crisis in Arizona, as the state constitution has no provisions to keep government operating without an adopted budget.

All that presumes, however, that there are sufficient Republican votes for what Montenegro has dubbed his “continuation budget.’’

There are 33 GOP lawmakers in the 60-member chamber. But one — Rep. Matt Gress of Phoenix — is in Italy for his honeymoon.

Not a single one of the 27 House Democrats will vote in favor of the “non-starter’’ bill, said House Minority Leader Oscar De Los Santos.

“That plan will short-change our public schools, our colleges, health care, lifeline services for working families and the most vulnerable in our state,’’ De Los Santos said.

He also noted the Senate-approved plan — the one supported by Hobbs and a majority of Democrats in both the House and Senate — includes money for other priorities, such as a pay raise for Department of Public Safety officers and state firefighters.

If Democrats balk, that means Montenegro can afford to lose just one vote among his caucus. Whether he has that remains to be seen.

Just a week ago Livingston said he thought there were enough House lawmakers from both parties to approve the Senate plan.

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But on Monday, he was telling a different story.

What changed?

“We got the real numbers,’’ Livingston said, saying the spending in the Senate plan is unsustainable.

Even assuming there are enough votes for the new House GOP plan, that still leaves the question of why go through the exercise given the governor’s promise to veto it. Montenegro said he isn’t paying attention to that.

“First and foremost, the people of Arizona deserve to make sure we’re going through every budget, every dollar that’s being spent for the public,’’ he said. He said that means supporting a budget that prioritizes the use of available dollars for public safety, law enforcement and safe communities.

“Unfortunately, from the start, the executive budget laid out a framework that did not line up with having those conversations,’’ Montenegro said. “And we were pretty much given or told ‘take it or leave it’.’’

That’s not exactly how Hobbs sees it, as she says Montenegro and House GOP leaders were invited to participate in the negotiations.

The speaker disagreed. “The House has always been open to conversations,’’ Montenegro said, though he added that once the Senate began talking with the Democratic governor, it was clear they were crafting a plan that would not be of interest to House Republicans.

“They decided to focus on their own negotiations behind closed doors,’’ he said. “We were not a part of those.’’

Still, Montenegro said House Republicans remain ready to talk. And the spending plan that was introduced Monday is a way to do that while ensuring state services do not come to a halt on July 1 once there is no authority to spend money, he said.

How much latitude the GOP caucus will give the speaker to agree to a deal — and avoid financial crisis — is still up in the air.

Rep. Justin Olson is taking a hard-line stance.

The Mesa Republican said the Senate-approved budget for next fiscal year is an 8.3% increase over current spending. By contrast, he said, inflation and population growth are up just 4.1%.

Olson said the last time lawmakers had such a giant mismatch was during the administration of Democratic Gov. Janet Napolitano.

“State expenditures increased by more than double the rate of growth in population and inflation,’’ he said. “We ended up with a $3.6 billion budget deficit, a budget crisis, that we were ill-prepared to be able to resolve.’’

Lawmakers dealt with the deficit with about $1 billion in cuts, a similar amount of borrowing and a temporary sales tax hike that made up the difference.