AZ Legislative Update 05-12-2023

A familiar scene unfolded at the Capitol this week: Republicans rolled out a budget package they negotiated behind closed doors with the Governor, fast-tracking it through a committee hearing and passing it over objections from Democrats who felt left out of the discussions.

But this year was different. Republicans no longer hold the Governor’s office, and it was months of private negotiations between Republican legislative leaders and Democratic Governor Katie Hobbs that crafted the proposal introduced on Monday. Legislative Democrats expected to have a bigger role to play in shaping the budget under the new Governor. As the budget bills became public, they decried the process, their lack of input, and their priorities that weren’t included in the final budget – like a limit to enrollment in Empowerment Scholarship Accounts (ESAs).

The tone shifted later in the week, after Governor Hobbs personally contacted members of the Democratic caucus to ask for their support. Democratic caucus leaders and others agreed to vote for the budget because of what was included, knowing their priorities could be cut from the proposal if it passed with only Republican support. By Wednesday afternoon, approximately half of the Democratic caucus had joined Republicans to provide significant bipartisan support for the budget.

There was praise for the budget from Republicans and Democrats alike. The Governor signed it when it reached her desk.

There’s frustration and anger within the House and Senate Democratic caucuses, though, and open criticism of the way the Governor excluded them from budget talks. These divisions will shape political alliances for the rest of the legislative term and will influence House Democrats’ selection of their new leader.

Budget Includes One-Time Spending, Specific Projects

Republicans and Democrats both found things to love and hate in the approved budget. The $17.8 billion package funds the state government and allocates the state’s surplus funding to a long list of one-time investments.

The budget allocates funding for:

• An increase to the annual inflation adjustment for school funding from 2% to 2.9% and increased additional assistance payments to school districts. This increase is funded by an elimination of the results-based funding model established under former Governor Ducey. Governor Hobbs believes the system did not benefit all schools.
• It provides $300 million for schools to use this year.
• It boosts one-time funding for alternative K-12 transportation, early literacy, school facilities, dual enrollment programs, and broadband access. It also provides one-time dollars for a wide range of specific school projects around the state.
• It establishes new reporting requirements on ESA enrollment and allocations. In addition, the House announced it would create a bipartisan committee to examine the administration of ESAs.

Priority Bill Update

The budget package also included a resolution to waive the state’s aggregate expenditure limit for the next school year. Lawmakers gave final approval to the resolution this week, overriding the spending cap on schools until June 30, 2024, and avoiding potential budget cuts for schools.

This week, Governor Hobbs signed SB 1205 (foster children; education; best interest) and SB 1315 (emergency response; students with disabilities).

What’s Next?

Legislators will return to the Capitol Monday, where they are expected to turn their attention to the bills that still require floor debates and votes. In a normal year, that would signal the end of the legislative session. But this year, lawmakers might opt for a weeklong recess instead, waiving the constitutional limit on extended breaks from work at the legislature to remain in session.

This highly unusual idea is inspired by the dynamics of divided government: Republican legislators are hesitant to adjourn the session, since once they do they can’t come back into session without permission from the Governor or support from Democratic lawmakers.

Senator Bravo Takes Office

This week, the Maricopa County Board of Supervisors appointed Representative Flavio Bravo (D-Phoenix) to fill the Senate seat previously held by Raquel Terán. The new senator took office on Monday. His appointment leaves another empty seat in the House; Democratic party officials plan to meet today to nominate three candidates for the Board of Supervisors to consider.

Governor Approves, Vetoes More Bills

Governor Hobbs signed 16 more bills into law this week and vetoed two bills that would have increased the legislature’s role in state agency rulemaking and created a new committee to review child abuse.

The Governor has vetoed 66 bills and enacted 129 new laws this year.                    

On the Bright Side…

The new season is just starting for this Arizona team.