Ahead of a looming government shutdown, progress on an Arizona budget 'unravels'

By Howard Fischer/Capitol Media Services
Published: Tuesday, June 21, 2022 - 7:33pm

Republican legislative leaders are trying to sell what they have billed as a $15.6 billion budget for the new fiscal year that begins July 1.

But as of late Tuesday, prospects were falling apart.

Sen. David Gowan (R-Sierra Vista) refused to advance the spending plan after he accused House leadership of reneging on a promise.

Senate President Karen Fann told Capitol Media Services there had been a deal for the House to approve four Senate priorities before a final vote on the budget. These include continuation of the Arizona Board of Regents, a new tax credit for companies making films in Arizona and creation of a Southern Arizona Sports Authority.

But Rep. Travis Grantham (R-Gilbert) refused to give the measures a hearing in the House Rules Committee. So Gowan, who chairs the Senate Appropriation Committee and is the sponsor of two of those bills, sent the members home rather than review the budget, stalling the process.

Grantham said he has done nothing wrong.

"I have never discussed a deal, agreed to a deal or been part of some secretive deal to move a certain senator's special interest bills that are fat, bloated and in some instances likely unconstitutional,'' he said in a Twitter post.

The spat is the latest hurdle for Fann, who has struggled to line up votes while Arizona is flush with cash — a $5.3 billion surplus in tax revenue.

That, she said, means that everyone has an idea of how to spend all that cash.

"Parents will tell you when there's no money, while it's hard and difficult at least you can just say, 'I'm sorry, there's no money, we can't afford that,'' said the Prescott Republican.

"We have this one-time miracle opportunity to do so many great things,'' she continued. "And here we are arguing because it's not enough.''

That's exactly the claim being raised by Marisol Garcia, vice president of the Arizona Education Association. She contends state revenues leave enough to provide an additional $1.2 billion for public education.

The GOP is advertising its plan as adding close to $900 million to K-12. But that isn't exactly true.

The actual new dollars being put into the base for the coming year -- ongoing funds on which schools can rely year after year — is only about $540 million, a figure that House Minority Leader Reginald Bolding, D-Laveen, said "doesn't even match inflation.''

And buried in all the numbers is something else: The actual spending plan that Republicans want to approve actually is bigger than that $15.6 billion figure they claim is the bottom line. A lot bigger.

The key is the use of budgetary maneuvers.

For example, that $15.6 billion figure does not include close to $1 billion in earmarks for road projects sought by individual lawmakers. They get around putting those dollars into the budget — where they would have to be accounted for — by instead directing the state treasurer to take that money out of sales tax proceeds and give it directly to the Department of Transportation.

Another bit of budgetary sleight of hand is $335 million set aside to build a border fence. Here, too, the dollars aren't accounted for in the $15.6 billion spending plan but are a direct diversion of sales tax.

Ditto for another $209 million for a "border security fund'' to provide more dollars for things like aid to local sheriffs and prosecutors, $334 million for a yet-to-be-enacted plan to secure more water and a $425 million deposit into the state's "rainy day'' fund.

Some Republicans consider the spending plan too large.

"This is the most over-the-top, spendingest budget ever,'' said Sen. Michelle Ugenti-Rita, R-Scottsdale.

Ugenti-Rita said if there is a recession looming, it makes no sense to increase state spending. Rather, she said, leave the money in the pockets of the taxpayers. So far, she told Capitol Media Services, those pleas to GOP leadership have fallen on deaf ears.

"When I have conversations with them about taxpayer relief, cutting, they act like I'm speaking Mandarin,'' Ugenti-Rita said.

Fann said the refusal of some Republicans to go along has put her in the position of having to craft a budget that is designed to attract at least some Democratic votes.

There are signs that a bipartisan budget might be possible. On Tuesday, Rep. Cesar Chavez, D-Phoenix, voted with the Republicans in the House Appropriations Committee to support the plan.

He said he is concerned that the state is rapidly closing in on the new budget year. And if there is no adopted budget, Chavez said, state agencies will have to shut down, something he said is unacceptable.

If that doesn’t work, there’s already is a Plan B: adopt a "skinny budget'' that effectively keeps the state operating at current levels, putting off decisions on expanded funding until after the new fiscal year begins. In fact, the House Appropriations Committee voted for that alternate plan Tuesday in case the full-blown GOP budget, which it also approved, ultimately falters.

Fann is prepared to follow suit.

"We may end up doing a skinny budget next week because we're not going to let government shut down because I have a few members that are saying, 'it's not enough,' '' she said.

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