PHOENIX — A special fund set up by the Arizona Legislature and former Gov. Doug Ducey in 2022 to provide $1 billion to secure new water supplies in the desert state is once again being raided to help balance the state budget.
The move to use more than $70 million from the Long Term Water Augmentation Fund was called shortsighted by a representative of the state agency charged with using the money to bring new water to the state.
And several lawmakers on the Senate Appropriations Committee — which overwhelmingly voted Tuesday to advance the package of bills making up the $17.6 billion budget for the coming year — criticized the so-called “sweep’’ of money from the dedicated fund.
“It’s not even a sweep. It’s worse than that,’’ complained Sen. Vince Leach, a Tucson Republican. “It’s a piggy bank. And we’re using it, and have been using it, as a piggy bank. And this budget continues the piggy bank approach.’’
The vote in the Appropriations Committee sets the stage for the full Senate to consider and vote on the budget on Wednesday.
The entire package was negotiated between Democratic Gov. Katie Hobbs and Senate Republicans. House Republicans passed their own spending plan last week for the budget year that starts July 1, but Democrats and Hobbs pronounced it dead and are instead embracing the Senate deal.
All of the 16 bills in the budget plan passed with a supermajority of the 10 committee members in support. So did bills waiving a spending limit on K-12 schools for the coming two years, which removes the chance they could be blocked from spending some of the money the Legislature appropriates.
Several other items in the plan drew some opposition from lobbyists who are pushing for specific changes.
For instance, state corrections officers want a 20% raise instead of the 5% boost Hobbs and lawmakers put into the budget. Their lobbyist warned that a wave of hundreds of retirements could hit already understaffed prisons if lawmakers don’t reward guards with better pay.
And hospital officials who went along last year with a temporary two-year, $100 million a year tax to help fund the state’s Medicaid plan hoped to see it end early.
But Tom Farley, lobbyist for the Health System Alliance of Arizona, conceded the major hospital groups in the alliance were happy the Senate plan didn’t echo the House budget, which made the increased assessment permanent.
“We appreciate the fact that the Senate budget, unlike the House budget, ends this practice this year,” Farley told the committee.
“So we’re the lesser of two evils in your eye?’’ Sen. John Kavanagh, R-Fountain Hills, asked Farley.
The hours-long hearing was the public’s only chance to comment on the budget deal. And it featured a rare lack of criticism of a budget deal.
In fact, several lobbyists and members of the public praised the budget for the funding it did provide, including two women whose children are developmentally disabled and rely on state aid for care. A state funding shortfall earlier this year required supplemental funding to get the program through the end of the budget year and the agreed-upon budget fully funds the Division of Developmental Disabilities for the coming year.
Rachel Lack, whose 13-year-old son Henry is non-verbal and has severe autism, said state money helped her obtain an iPad with a touch chat app that, for the first time, allowed him to communicate.
“This device he got through DDD and we’re so appreciative that he has his voice,’’ Lack told the committee, calling it “life-changing.’’
“For the first time, he could tell us what he wanted to eat,’’ she said. “This budget will help more children like Henry receive (similar) devices. Every person deserves to have a voice.”
But there was the criticism of sweeping $73.2 million from the augmentation fund for the Water Infrastructure Finance Authority (WIFA).
The 2022 legislation set aside $333 million a year in three successive years so the authority would have $1 billion dedicated to finding and developing new water sources, mainly from outside of the state. Then-Gov. Ducey, a Republican, was intent on having the state develop a water desalination plant on the Gulf of Cortez in Mexico and pipe the water to Arizona.
That plan fell apart, at least in part because of the secrecy surrounding it and in part because the Mexican government said it never was consulted.
That has left the WIFA fund expecting money that lawmakers have instead decided to use for something else. That includes $30 million for wildland firefighting, $2 million to clean up the Iron King Mine in Humboldt, and $1.7 million for litigation the state may pursue to protect its Colorado River water supply.
The Legislature made the first $333 million payment into the fund in the budget passed in 2022, but has never met its commitment since. In 2023, lawmakers put in only $190 million, and last year cut the planned appropriation to zero and “swept’’ $100 million from the account to help balance the budget.
“Repeating that mistake now sends a deeply contradictory message, not only to Arizonans but to cities, utilities and private partners we rely on to move serious projects forward,’’ said Judah Waxelbaum, WIFA’s chief legislative liaison.
Tuesday’s vote occurred despite the fact that earlier this year, the House and Senate overwhelmingly passed a resolution calling those earlier raids on the fund a mistake and vowing to restore funding that is “critical to Arizona’s current and future economic and environmental health.’’
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