Lawmakers OK 'skinny' Arizona budget Hobbs says she'll veto

PHOENIX — House Republicans rounded up the votes Monday for a “skinny” budget for state government, essentially daring Democratic Gov. Katie Hobbs to veto it.

And Hobbs said that’s what she’s going to do.

The party-line vote came after Rep. Liz Harris, R-Chandler, reversed her vote of just a week earlier against the $15.1 billion plan, which had left Republicans without the necessary 31-vote majority.

Harris had initially vowed not to vote for any legislation until lawmakers arrange for a redo of the 2022 election, even though there is apparently no legal way to do that.

She then said she voted against the budget plan because it would spend too much money, although it largely simply extends current funding for another year.

And what she voted to approve Monday is no different than what she rejected a week earlier.

Harris has refused to speak to reporters.

Rep. David Livingston, R-Peoria, who chairs the House Appropriations Committee, congratulated fellow Republicans for approving a new state budget just five weeks into the legislative session, which he said was a record.

But it could prove to be a hollow victory.

Hobbs calls it ‘insult to Arizonans’

“Arizonans deserve a budget that takes the real issues they are facing seriously,” Hobbs said in a written statement issued moments after the House action.

“This do-nothing budget kicks the can down the road,” the governor said. “And it’s an insult to Arizonans who need their leaders to address affordable housing, invest in public education, and put money back into their pockets.”

House Minority Leader Andres Cano, a Tucson Democrat, said Republicans had — and still have — a chance to do what has been done in the past: negotiate a bipartisan budget. He said they need to recognize the political reality that a majority of Arizonans selected Hobbs as governor.

But rather than working with Democrats, including Hobbs, Republicans chose to go it alone, and they do so at their own risk, Cano said.

“If the message from the GOP at the beginning of month two of the 56th Legislature is going to be, ‘My way or the highway,’ get ready for the highway,” he said.

Hobbs last month proposed a $17.1 billion budget for the new fiscal year that begins July 1. It includes new tax credits for low-income parents, additional funding for K-12 education beyond normal inflation and student growth adjustments, and eliminating sales taxes on diapers and feminine hygiene products, among other goals.

The procedure of the governor releasing budget proposals the first week of the session has been followed for decades. What usually follows are negotiations with members of the governor’s own party as well as the political opposition.

This time, however, GOP leaders announced Hobbs’ budget dead on arrival, even with the state having an anticipated $1.8 billion surplus going into the new fiscal year.

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Ensuring government doesn’t shut down

House Speaker Pro-tem Travis Grantham, R-Gilbert, said what Republicans want makes more sense.

He said that starts with adopting a basic budget consisting of the spending approved last year, with mandatory adjustments to programs including education and health care to account for inflation. Another nearly $200 million would take care of a 2017 lawsuit accusing the state of short-changing schools on construction and repair dollars.

That comes to $15.1 billion. Grantham said that then opens the door to consider what else to do with the surplus.

“We, as legislators who control the purse strings, regardless of whether we are Republican or Democrat, in my opinion should spend the remainder of the time here arguing over those dollars for the purposes we see fit and for the governor’s wants and needs,” he said.

Adopting what he calls a “baseline” budget recognizes that Arizona, unlike Congress, has no ability to approve a “continuing resolution” to keep government open under current spending levels while a deal is worked out. Put simply, the law in Arizona is if there is no budget on July 1, there is no authority to spend money.

“It ensures the government will not shut down at the end of the fiscal year, harming innocent people on June 30th,” Grantham said.

Negotiating power over priorities

While Grantham sought to portray the issue as simply a question of what to do with the surplus, that isn’t exactly true.

Hobbs’ proposal is not simply to add more money. She also wants to repeal last year’s vote by the Republican-controlled Legislature and signed by then-Gov. Doug Ducey to allow any student to get a voucher of state funds to attend private or parochial schools.

Prior to that, the vouchers known as Empowerment Scholarship Accounts were available only to certain students, ranging from those with special needs, to foster children, to students attending schools the state has rated “D” or “F.” Hobbs said going back to that plan would free up more than $144 million.

Her budget also seeks to revamp how funds are spent.

For example, Hobbs wants to stop sending extra money to K-12 schools that earn high letter grades, which she said are primarily in rich areas of the state. Instead, she proposes to use that money and the savings from ending the universal voucher expansion to boost K-12 basic state aid to schools by nearly $200 million, an additional $637 per student.

If a baseline budget is in place, Hobbs would lose any negotiating power over those issues.

House Majority Leader Leo Biasiucci, R-Lake Havasu City, already is preparing for what is likely to become a blame game if Hobbs rejects the Republican budget and state services come to a halt on July 1.

“If she does that, it’s party politics,” he said. “This is everything we need to make sure that schools don’t shut down, make sure government stays open, make sure all our essential services stay open while we figure out what we need to do with the rest of the money.”