Arizona lawmakers pass $17.8B budget despite Democrats’ concerns

PHOENIX — Lawmakers approved a $17.8 billion state spending plan Wednesday after Republican lawmakers beat back efforts by Democrats to curb universal access to school vouchers.

The budget deal reached by Democratic Gov. Katie Hobbs and Republican legislative leaders kept the universal voucher eligibility approved last year by the Republican-controlled Legislature.

Rep. Nancy Gutierrez, D-Tucson, sought to impose an immediate pause in enrolling more students in the voucher program, which allows students to attend private or parochial schools at taxpayer expense, regardless of financial need, until lawmakers can get a better handle on costs.

She pointed out that the price tag this school year alone already is more than double the original $200 million estimate. That doesn’t include another $176 million that funds the original voucher program, which was steadily expanded since it began in 2011 to serve students with special needs.

Hobbs, in her budget proposal released in January, the month she took office, predicted that universal vouchers, unless repealed, would consume $1 billion a year in state funds within a decade.

Gutierrez’s proposal, however, went down to defeat on a party-line vote as Rep. David Livingston, R-Peoria, who chairs the House Appropriations Committee, said Hobbs agreed to keep the universal eligibility.

Gutierrez, a public school teacher, had no more luck with her effort to cap enrollment in the expanded program at 69,000 students, about 25% more than already signed up since universal vouchers first became available last year.

$300M more for K-12 schools

Despite Democrats’ party-line support for voucher limits, several Democrats agreed to support the budget anyway.

Backers said the package contains other priorities they want, including adding $300 million to K-12 schools.

That didn’t impress Rep. Athena Salman, D-Tempe.

She pointed out that is just a one-time infusion. And she said the exploding costs of universal vouchers, formally known as “empowerment scholarship accounts,’’ will make it more difficult in future years for public schools to get additional money.

Rep. Leeza Sun, D-Phoenix, said if the state really has an extra $1 billion, it would be better spent on K-12 schools. She said that amount would fund $10,000 pay raises for about 35,000 teachers.

In an effort to sweeten the deal, House Speaker Ben Toma, R- Peoria, agreed with Minority Leader Andres Cano — a Tucson Democrat who voted for the final package — to create a special study committee “to provide clarity and ensure that the governance and administration of empowerment scholarship accounts is appropriately designed to manage a growing and complex problem.’’

There is nothing that ensures changes will be made to the program or limits will be imposed after the report is issued at the end of the year.

Affordable housing priority

Still, there was enough in the package to add the votes of 16 of the 28 Democrats to all 31 Republicans for the main spending plan.

A separate bill to fund K-12 education — and the vouchers — fared less well with 12 Democratic votes, but still enough for approval.

Those votes, coupled with divided support from Senate Democrats earlier in the day, was sufficient to send the budget to Hobbs who issued a statement praising lawmakers for ratifying the deal she cut with the GOP leaders and promising to sign it.

“Not everybody got what they wanted,’’ Hobbs noted.

She made no mention that she gave in and did not pursue the budget plan she announced in January. That would have repealed the universal vouchers and returned the program to what it was before 2022, when only students with special needs or in certain categories qualified for state-paid tuition to private schools.

Hobbs said the deal made “historic investments’’ in affordable housing, road and bridge construction, and expanded health care for children of the working poor.

Among the Democrats who found enough worthwhile in the package to support it was Rep. Analise Ortiz. She told colleagues about what she has heard from residents of her district, which includes the Maryvale section of Phoenix and part of Glendale.

“The people who sent me here were asking most often for relief from the housing affordability crisis that impacts Arizonans in every part of the state, of all ages and demographics,’’ Ortiz said. “There is no portion of the state that is not touched by the rising cost of rent and mortgages. There is a humanitarian crisis as seniors on fixed incomes are living in their cars and as people continue to die on our streets.’’

What got her “yes’’ vote, she said, was a $150 million deposit into the Housing Trust Fund to help finance affordable housing and eviction-prevention programs. That’s more, she said, than has been added over the past 10 years combined. Another $60 million goes into a new emergency fund that can immediately go to finance homeless shelters.

Pointed criticisms of Hobbs

Rep. Cesar Aguilar, D-Phoenix, also agreed to go along. But he made it clear he was not happy about the take-it-or-leave-it choice he was given — nor with the governor for negotiating what he says was a bad deal and putting Democrats in that position.

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“Democrats seem to be in the same boat as if we had a Republican governor,’’ Aguilar said. He cited Hobbs’ agreement to not just leave last year’s universal voucher plan in place but to allow it to grow without caps.

“What is the point of holding the governorship?’’ Aguilar asked. “Why did we all work to get Gov. Hobbs in office and we are still short?’’ he said, saying what was adopted was “not a Democratic budget but a Republican budget.’’

Rep. Mariana Sandoval, D-Goodyear, was unwilling to accept the arguments by some of her Democratic colleagues that there was enough good in the package to allow them to swallow the bad.

“This budget was negotiated through the governor’s office by the governor and majority leaders,’’ she said. “And we as a caucus were given crumbs.’’

Yet at the same time, Sandoval said, the spending plan is packed with money for other priorities, such as $15.3 million for capital projects for the Prescott Frontier Days Rodeo.

That is part of what Salman called $633 million in “pet projects’’ handed out by GOP leaders to lawmakers who agreed to support the package. Salman said these are things like road and bridge construction and improvements that are not priorities in the Arizona Department of Transportation Five-Year Plan but “some of which jumped the line because they had an ‘in’ with a certain member.’’

Parental choice defended

Still, the central point of contention was the decision to leave intact the universal voucher plan and the complaints by Democrats that the ever-increasing price tag will leave the state with less money for other priorities including public education.

But Rep. Justin Heap, R-Mesa, said that has to be examined in the context of what he said has been nearly a doubling of state dollars in public education since 2013.

“And what have we gotten for our investment?’’ he asked.

Heap also decried the “constant stream of attacks’’ on the voucher program. He said it has to be seen not as an attack on the program but “an attack on the students, on the kids and the families that rely on the ESA program to put their kids into schools.’’

“Why?’’ Heap said. “Because they had the audacity to take their children out of a government school and put them into a better program.’’

In the Senate, Minority Leader Mitzi Epstein of Tempe said she, too, believed she and others were forced to vote for the Hobbs-negotiated package, saying that was the price Democrats had to pay to get their priorities included.

“I did not want and do not want to vote ‘yes’ on these budget bills,’’ she said. “But in order to keep the funding for K-12 and to keep the funding for housing and to establish a homelessness fund, I had to vote ‘yes.’”

Epstein also said that, theoretically speaking, Democrats could have held out for a few more weeks, as the new fiscal year that the budget pays for does not begin until July 1. She said that might have resulted in a budget more to the liking of Democrats.

“But this is the budget we have before us today,’’ Epstein said. “So we have to make a decision on this budget.’’

Whether a better deal might have been negotiated is speculative at best.

Senate President Pro-Tem T.J. Shope, R-Coolidge, said it always was clear, after the election of a Democratic governor in November, that Republicans would not get the budget that might otherwise be enacted with a Republican as the state’s chief executive. They were prepared to negotiate, Shope said.

But he said GOP leaders also made it clear to Hobbs from the start that some issues were non-negotiable. That specifically included continuation of the universal vouchers.

It wasn’t just the vouchers that left many Democrats unhappy.

Tax break, rebate debated

Sen. Priya Sundareshan of Tucson decried a tax break that the conservative Arizona Freedom Caucus got inserted into the package that Hobbs approved. Only those who have paid some taxes in the past three years will be entitled to get a one-time $250 credit for each child, up to $750.

“That means that the most vulnerable, the most needy families will not actually receive the benefits of this tax rebate,’’ Sundareshan said. She also said it denies relief to those who have no state income tax liability, possibly because they are getting tax credits for donating to other programs for the homeless or education.

Sen. Jake Hoffman, R-Queen Creek, one of the architects of the plan, defended it.

“Arizona families are being crushed right now,’’ he said, pointing to rising costs of food and fuel. “Our job is to do all we can to support Arizona families and Arizona citizens to the best of our ability.’’

And while the package, and the rebate, was part of the negotiated deal between the GOP and Hobbs, Republicans inserted language to ensure the governor gets no credit when the funds go out. They added language stating that any communications about the rebate cannot be sent from the governor’s office, be put on the governor’s letterhead, or contain any reference at all to the governor’s office.