PHOENIX — State government will not shut down Monday night after all.
Gov. Katie Hobbs penned her approval Friday to a nearly $17.6 billion spending plan for the budget year that begins Tuesday. That followed a Thursday night vote by the House and ratification Friday by the Senate.
Most immediately, the deal means there is no longer a threat that state employees would be laid off, schools wouldn’t get their funds and state parks would shutter just ahead of the July 4 holiday. That was a real possibility during the budget stalemate, given that the current authority to spend money expires on Monday night.
Hobbs praised the deal, highlighting pay raises for state police and firefighters, increased state funds for subsidized child care, funds to deal with drug trafficking and human smuggling, and additional dollars for K-12 education as well as for community colleges and universities.
But the budget isn’t what many lawmakers from both parties wanted.
Republicans complained about the large increase from the current $16.1 billion budget adopted a year ago. But while they control both the House and Senate, the Democratic governor gets the last word. And that forced them to agree with much of what she demanded.
Even at that, some Democrats refused to vote for the plan, arguing it short-changes important priorities while continuing to spend nearly $1 billion on the universal voucher plan that allows parents to get taxpayer funds to send their children to private or parochial schools or home school them, regardless of their own finances.
Hobbs, in her budget proposal introduced in January, called for phasing out the amount of those vouchers — formally known as Empowerment Scholarship Accounts and averaging $7,400 a year — for families making more than $100,000 and eliminating them entirely for families with incomes over $200,000. That proved a non-starter with Republicans, who said family resources are irrelevant to whether someone should be able to get a public benefit.
Sen. Lauren Kuby, a Tempe Democrat, said the universal vouchers are “a scam that drained over $1 billion from our treasury and has taken money from our public schools in the name of subsidizing wealthy Arizonans for attending private schools. It’s wrong.’’ Hobbs, in a prepared statement, made no mention of the vouchers.
Hobbs said the budget deal brings the state closer to what she dubbed in January as the “Arizona Promise’’ of “increased opportunity, security and freedom for everyday Arizonans.’’
In the end, though, just six of the 13 Senate Democrats agreed to go along; it fared better in the House where it picked up support of 20 of 27 Democrats.
Immigration enforcement controversy
The concerns went beyond money.
Sen. Sally Ann Gonzales, a Tucson Democrat, pointed to language in the package setting aside more than $24.7 million for the Gang and Immigration Team Enforcement Mission. This includes almost $12.9 million for the Department of Public Safety for “strictly enforcing’’ federal immigration laws, helping county sheriffs and attorneys to investigate employers who hire illegal aliens, and enforcing some remaining provisions of SB 1070, the controversial 2010 law that allows police to question people they have stopped about their immigration status. Gonzales said she could not support the plan.
Tucson Democratic Rep. Alma Hernandez felt the same. “My morals and my values cannot allow me to support the terrorizing of my community,’’ she said. “So shame on any Democrats who supported including that language.’’
As it turns out, though, that exact language was also in the budget lawmakers approved last year for the current fiscal year. Hernandez acknowledged that but told Capitol Media Services “we are not living in the same times,’’ citing the Trump administration’s new emphasis on raids and deportations.
The governor, while agreeing to keep that language in the new budget, is seeking to tamp down concerns. Earlier this month she had DPS Director Jeffrey Glover issue a statement declaring that the agency “does not engage in direct immigration enforcement.’’
The Gang and Immigration Team Enforcement Mission “combats criminal street gangs and transnational criminal organizations throughout Arizona, working in coordination with local, state and federal law enforcement agencies,’’ he said.
Gonzales was not convinced. “The words are in there,’’ she said of how the budget directs the funds to be spent.
Tradeoffs for GOP lawmakers
Republicans had their own disappointments with the package.
Their wish list included stricter and more frequent checks of eligibility for food stamps and health care, a 2.5% cut in resident tuition at state universities, and a ban on subsidizing university tuition “for those not in this country legally.’’
All those, however, proved unacceptable to the Democratic governor. And, in the end, House Speaker Steve Montenegro said he and other House Republicans had to recognize the political reality of the situation.
“We are in a divided government,’’ Montenegro said. “And the reality is we have to find a way to work together.’’
Republican Sen. John Kavanagh, who chairs the Senate Appropriations Committee, agreed.
“I think this is a true bipartisan budget,’’ he said, adding that had to be that way given a Republican House and Senate and a Democratic governor.
“When it comes to the budget, it takes three to tango,’’ Kavanagh said — especially, he said, when one of them has veto power.
What also probably helped force a deal was the looming Monday night deadline.
House Speaker Steve Montenegro, right, and Rep. David Livingston discussing what’s in the $17.6 billion spending plan.
“I think the most important thing that Republicans are doing is making sure the state functions and that we don’t have a shutdown and we don’t have layoffs,’’ said Republican Rep. David Livingston.
Livingston, who chairs the House Appropriations Committee, was a key critic of the deal the governor negotiated with Senate Republicans. He backed a plan to spend $300 million less.
But in the end, Livingston said this was as good a budget as House Republicans were going to get, and that there was not a better deal to be had, “not with this governor.’’
Some Republicans, however, argued that their leadership caved in too easily to what Hobbs and her fellow Democrats demanded.
One is a provision that Scottsdale Republican Rep. Alexander Kolodin said would provide Democratic Secretary of State Adrian Fontes with up to $17 million that would go to “progressive’’ non-government organizations to help get people registered to vote.
“In other words, we as a Republican body are funding the Left’s 2026 campaign,’’ said Kolodin, who is running for secretary of state in next year’s election.
Other lawmakers complained that what was approved Thursday night did not include priorities that were in their earlier $17.3 billion budget proposal, having been jettisoned in order to make a deal with Hobbs.
Those included Mesa Republican Rep. Justin Olson, who sought to require the state’s Medicaid program to do additional screening of applicants, including monthly checks to determine eligibility and requiring the Department of Revenue to report those who have won more than $3,000 in the Arizona Lottery. He said such measures are necessary because the new spending plan approved Thursday night is $1.4 billion above the current budget.
“That is not a sustainable rate,’’ Olson said. “What better way to be good stewards of our tax dollars than to root out waste, fraud, and abuse?’’
While Hobbs agreed to go along with the spending package she helped negotiate, the Democratic leaders in both chambers were divided.
Senate Minority Leader Priya Sundareshan of Tucson said the plan just didn’t have enough good things in there to gain her support. She also cited the language giving funds to the Gang and Immigration Team Enforcement Mission for immigration enforcement.
Party wins cited
But Oscar De Los Santos, her House counterpart from Laveen, said there are a lot of good things in the package for Democrats.
“This budget delivers for public school students, protects Medicaid and expands health care for cancer patients and tribal members,’’ he said. “It also makes the biggest investment in 10 years in reducing child care costs.’’
Rep. Teresa Martinez, R-Casa Grande, who voted for the budget, told fellow Republicans they, too, have to look at the wins for their party. Those specifically include not just funds for immigration enforcement, but also its protection of the universal vouchers system, she said.
And she reminded Republicans of the political reality of the situation.
“I do not believe in shutting down the government because (then) DPS doesn’t get paid, our teachers don’t get paid, nobody’s going to be at our parks for Fourth of July,’’ Martinez said.
“There are so many ramifications of shutting down the government,’’ she said. “And none of them are good. And it blows my mind that people would rather shut down the government and hurt millions of people for politics.’’
