PHOENIX β Democratic Gov. Katie Hobbs took major heat from many Democrats for negotiating a state budget package with Republican legislative leaders that did not include any changes to the stateβs new universal school voucher program.
But Republican Senate President Warren Petersen is heaping praise on Hobbs for the deal, saying she negotiated in good faith, kept her promises and made a rare bipartisan budget happen.
And he pointed out that despite Democratsβ anger over school vouchers, βthat wasnβt going to get on her deskββ because majority Republicans would never vote to curtail the program.
βKudos to her,ββ Petersen said about the governorβs direct negotiations with him and House Speaker Ben Toma, which unfolded with meetings multiple times a week over two months.
βShe was reasonable,ββ he said. βAnd she would keep her word. Whenever she would say, βI agree to that,β she did it.ββ
The deal on the $17.8 billion state budget package for the fiscal year that begins July 1 came much earlier than many observers expected. Hobbs is the first Democratic governor since Janet Napolitano left office for a Cabinet post in the Obama administration in 2009, a shock for Republican lawmakers who have had 14 years of working with a GOP governor.
Petersen sat down with Capitol Media Services for a wide-ranging interview as the yearly legislative session takes a virtually unprecedented one-month break called by Petersen, R-Gilbert, and Toma, R-Peoria. With the budget done and the only bills remaining needing major work before votes, they called a break in floor sessions to work on those issues.
βWe literally have put everything up there that was readyββ for a vote, he said. βAnd now Iβm not going to make people come down here if I donβt have any floor work to do.ββ
Doling out money
Petersen said he was the one who came up with the plan that doled out chunks of a big budget surplus to each of the 47 Republican lawmakers in the House and Senate. Minority Democrats got smaller amounts, and Hobbs also got a big chunk to control.
What that earned was individual buy-in from GOP lawmakers who, for the first time, had ownership of a slice of the budget, Petersen said. Thatβs a huge difference from the way the budget has normally been done, with Republican leaders hammering out a deal with the governor and then presenting it to rank-and-file GOP lawmakers as a done deal.
βIt came from the difference between communism and capitalism and the way things normally go and why we always have problems,ββ Petersen said of his strategy.
βYou normally have six people down here deciding how β¦ all the money gets spent,ββ he said. βAnd then those six people try to convince everybody else to vote for the budget.ββ
Giving each lawmaker a portion of the budget to allocate β $20 million each for GOP House members, $30 million for each GOP senator β gave them control they did not have previously.
βThis time when we passed the budget everyone was actually smiling and happy,ββ Petersen said. βIt was like literally the first time Iβve been down here where people were happy.ββ
Normally, he said, people are angry, having had to get βwrangled into it.ββ
βEveryone went in ready to vote for this budget. Why? Because I gave them all a piece of the budget. Everybody got their own piece, and they owned it,β Petersen continued.
Even many Democrats voted for the plan, although many grumbled about how it was presented to them. Petersen blamed Democratic leaders for not adopting his formula with their members and for delaying giving him their budget βasks.ββ
Road tax
After the budget passed and was signed on May 12, whatβs left to decide is a series of top-tier legislative proposals that currently donβt have consensus among Republican lawmakers, with the governor having the final word.
The biggest issue is the extension of a half-cent sales tax in Maricopa County that pays for transportation projects.
The 20-year, multi-billion-dollar tax expires in 2025 unless voters extend it. But the Legislature has to give its permission for the issue to be put on the ballot; itβs the only county that requires that step to ask voters to approve a transportation tax.
Last year, lawmakers passed the tax extension proposal, but it was vetoed by then-Gov. Doug Ducey. With an even more conservative Republican caucus this session, it faces tough scrutiny.
Petersen said he and others have major problems with the proposal presented by the Maricopa Association of Governments, the entity that doles out the money for freeways, major roads, buses, light rail and clean air programs.
And Petersen has little faith in the entity. βMAG is completely unaccountable,ββ he said. βTheyβre very, very insulated.ββ
On paper, the agency is led by mayors who are supposed to have some oversight. βBut not really,ββ he said. βThese mayors are overwhelmed, busy.ββ
Petersen said the planβs use of 44% of the funds for mass transit β versus new highways and road construction β is a non-starter. He said it creates what he called a $2 billion βslush fundββ that he worries would be used to extend light rail despite promises thatβs not contemplated.
And then thereβs the part that says air quality is a consideration in what to fund. βIf theyβre just saying, βwe can use any measures we wantβ, they need to define what air quality programs they want to do,ββ he said.
Without definitions, Petersen said MAG could potentially impose limits on gasoline-powered cars or adopt cap and trade programs or who knows what. If they want flexibility for future technologies, he said a mechanism for legislative oversight should be added.
βBelieve it or not conservatives want clean air,ββ Petersen said, including for themselves and their children. βBut they need to define what it is. And yeah, if itβs reasonable, we put that in.ββ
Petersen had just left a meeting with Hobbs when he sat for the interview in his office and said it sounds like she may want to be directly involved in the negotiations over Proposition 400, the tax extension.
Rental taxes
Other remaining issues include a revamped proposal to ban city-imposed taxes on home rentals. Hobbs vetoed that bill earlier this session, saying there was no mechanism ensuring renters facing rising housing costs will see the money. She also opposed the $270 million appropriation to compensate cities for the lost revenue for the first 18 months of the ban, saying it came outside the budget plan.
Toma said recently that tying a signing of a rental tax ban and Proposition 400 in negotiations with the governor was a possibility. Petersen, however, said heβs not doing that.
βI donβt horse trade,ββ he said.
The other key battle remaining is a Republican proposal to override many city zoning laws in an effort to boost construction of lower-priced housing options.
That measure has failed once this year. New versions pushed by Sen. Steve Kaiser, R-Phoenix, donβt yet have the votes to pass, and the powerful League of Arizona Cities and Towns is strongly opposed, calling zoning a quintessentially local issue.
Petersen said he does not know if that will get enough support to pass, and if it does not, thatβs OK.
βIf he doesnβt have the votes, he doesnβt have the votes,ββ Petersen said. βItβs really that simple.ββ
Another handful of bills are also in the mix before lawmakers can adjourn for the year.
βWe probably have at least 10 bills that have loose ends on them that are really important for Arizona,ββ he said. βAnd weβre looking at if we can negotiate what to do with those by June 12, and the rental tax is one of them.ββ
Petersen, who became Senate president in January after a decade representing Gilbert in the House and Senate, said the unusually long break in legislative action is by design.
He recalled frustration after years of coming into work, saying the daily Pledge of Allegiance and prayer at the beginning of floor sessions and then adjourning for the day because nothing was ready for votes.
βAnd so Iβve just told my caucus, and theyβve appreciated this β¦ that I donβt just bring people down here to pledge and pray,ββ he said. βWeβre not taking a month off, OK. We just donβt have floor work.ββ