By Howard Fischer
Mail | X: @azcapmedia

PHOENIX — Gov. Katie Hobbs said Tuesday she wants to put the proposed $17.9 billion Republican budget behind her so that real negotiations can begin.

But she would not say outright she will veto it.

“We’ll see if they have the votes to pass it,” she said. “I don’t know that’s the case.”

So far, though, the votes appear there. Just hours after the governor’s comments, the Senate and House Appropriations committees approved the package of nine bills that make up the budget. That sets the stage for a final action on Wednesday in the Republican-controlled legislature.

Tuesday’s committee votes came over the objections of Democrats who said they feared the cuts from the $18.7 billion spending plan proposed in January by the governor will impact needed services.

“I think children will be suffering,” said Sen. Lela Alston.

“Elderly will be suffering,” continued the Phoenix Democrat. “Everyday Americans will not have the opportunity that they have had in the past for health care or food or everyday necessities.”

Tempe Democratic Sen. Mitzi Epstein said all this was unnecessary as there was no reason for Arizona to mirror all of the tax cuts in last year’s federal “One Big Beautiful Bill,” particularly those that benefit business.

But Rep. Matt Gress said Hobbs is deluding herself if she thinks by vetoing this budget she will be able to negotiate something more to her liking.

And Rep. Justin Olson said it is wrong for Democrats to claim the GOP plan is a cut in the budget. He pointed out the overall spending plan for the coming fiscal year would be about $300 million more than the current budget.

Olson said state spending is outstripping inflation and population growth.

“There is a significant amount of spending in this budget,” he said. “We are not cutting spending.”

That is true on an overall broad basis. But Democrats said that isn’t true across the board.

“It reduces affordable housing funding, in the middle of a housing crisis,” said Rep. Mariana Sandoval.

“And it takes $100 million from our public universities, pushing tuition further out of reach,” continued the Goodyear Democrat.

That’s based on the GOP plan that would cut 5% from the budgets of most state agencies, excluding K-12 education and those not dealing with public safety. On top of that, some dollars for universities included in the budget for the current year are not being renewed.

None of those cuts are in the governor’s budget.

The reason for that is simple: Hobbs built her spending plan on more money being available.

Some of that is based on the decision to mirror tax cut provisions in the federal bill.

The governor was willing to go along with some, notably a higher standard deduction, eliminating state income taxes on tips and overtime, and an additional tax break for seniors. But GOP lawmakers here also included various provisions in the federal bill designed solely to help businesses, cutting another more than $100 million a year in state revenues.

Epstein said there’s a flaw with the state simply copying what was decided by Congress.

“The federal budget can do these bad policies because they just print more money,” she said, with the Congressional Budget Office saying all those tax cuts will push the federal deficit up more than $4 trillion in the next decade.

But Epstein pointed out that’s not an option in Arizona with the state required to enact a balanced budget every year and constitutionally prohibited from running a deficit.

During the debate, Rep. Jeff Weninger took a swat at Democrats who said repeatedly that lawmakers were approving the plan to help corporations. The Chandler Republican said there’s more to it, saying there are restaurants and small businesses in his district that also will be able to take advantage of some changes in tax code.

“They’re the ones who will be benefiting from this,” he said. “They’re not a big corporation.”

But there’s more to the Republican plan — the one Democrats say means less money for needed services — than simply conforming to the federal tax code

For example, the governor’s proposed budget plan included eliminating tax breaks for data centers, a move that would save the state about $38.5 million a year, money that could be used for other programs.
GOP lawmakers, however, want to keep it. Sen. Lauren Kuby said that’s a mistake.

“Arizona should not be subsidizing big tech, especially as electricity prices rise and tech profits soar,” said the Tempe Democrat. “Instead of giving more tax breaks, we should be closing loopholes, protecting consumers and lowering costs for our energy-burdened residents, not shifting the burden on to them.”

And Rep. Stephanie Stahl Hamilton said this particular tax break that Republicans like undermines the claim they are interested in helping small business.

“There are no mom-and-pop data centers,” said the Tucson Democrat.

Hobbs also hoped to have an extra $89 million to spend on other programs by limiting vouchers for private and parochial schools only to children from families earning less than $250,000. Republicans have pronounced that a nonstarter.

And the governor’s plan also included some increases in taxes and fees, all of which were rejected by GOP leaders.

All that comes back to what happens next.

“We’re monitoring the situation,” Hobbs said Tuesday of Republicans advancing their spending plan. “I’m hopeful that we can get back to the table and start having real conversations about a budget that works for Arizona.”

Gress, however, had a message for the governor who walked away from negotiations last month if she believes that the Republican budget will simply be a starting point for new talks.

“You are mistaken,” he said.

“Whoever gave her the advice to walk away from the table, you gave up incredible amounts of any impact and leverage that you had because you now have a united Republican caucus in both the House and Senate,” Gress said. “And we are going to be very insistent on keeping 95% — if not 99% — of this package intact.”

 Please submit comments at yourvalley.net/letters or email them to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.