By Howard Fischer
Mail | X: @azcapmedia

PHOENIX - The newly adopted $16.1 billion budget has left some Democrats wondering whether there was a better deal to be had.

There were some victories for Democrats in the plan approved on Saturday, but with their party’s governor in power some are concerned that there could have been more.

Democrats won when $15 million was added to the state's Housing Trust Fund designed to help provide affordable homes for low-income individuals. That, however, is just 10% of what was allocated a year ago.

Democrats succeeded in getting a $135 million cap on the amount of money that donors could take as income tax credits for contributions to "school tuition organizations,'' which provide scholarships for students to attend private and parochial schools.

But some noted that cap is, at least for the moment, meaningless: The maximum that has ever been taken is about $20 million less. And STOs are less likely to be sought now that the state has universal vouchers of tax dollars starting around $7,300 for parents to send their children to those same private and parochial schools.

Hobbs already had given up in January on any plans to curb the number of vouchers by going back to the days when they were available only to students who met certain conditions, like learning disabilities, being in foster homes or attending public schools rated D or F.

Still, she promised some limits, like a requirement to have first attended public schools for at least 100 days, prohibiting price gouging, minimum education standards and accountability for how voucher funds were spent.

The final budget, however, simply closes a $2.5 million loophole that allowed double dipping: attending public schools during the regular academic year and getting a voucher for summer school. And after published reports on voucher funds going for ski trips and Lego sets, it directs the Department of Education to establish standings on how those dollars can be spent.

Voucher spending, however, remains uncapped.

At the same time, there were cuts to education funding, including a $2.1 million cut to a workforce training program and $3 million taken from a program that encourages dual enrollment in high school and college.

And additional dollars just won last year are evaporating, including $37 million for schools based on the number of students in poverty and $29 million in other additional assistance for some capital needs ranging from books and computers to buses.

What Democrats got instead was a promise to restore those dollars - but not until the 2027-2028 school year. And that is unenforceable, as it does not bind future legislators.

"That's a massive and irresponsible transfer of wealth from the poor to the rich,'' said Assistant House Minority Leader Oscar De Los Santos of Laveen, who didn't vote for the package negotiated by the Democratic governor with GOP leaders, about the spending on education.

There was another victory that could be considered hollow.

Lawmakers authorized community colleges to establish a "Promise Program.'' It is mirrored after one at the state university level, it ensures that eligible Arizona residents can get their tuition and fees paid if other financial aid does not cover the costs.

However, it is just an authorization, with no actual money attached. Rep. David Livingston, R-Peoria, who chairs the House Appropriations Committee, said colleges are free to find money in their own budgets or go out and seek private dollars.

All that left House Minority Leader Lupe Contreras disappointed, to the point where he would not support the package. The Avondale Democrat said he - and his caucus - didn't have any input.

"It was built by the governor and the (House) speaker and the (Senate) president,'' he said.

"Would we have rather been in the negotiations? Yes,'' Contreras said. He said the only reason the package received some Democratic support is that GOP leaders found they didn't have the votes within their own caucus and found themselves having to "buy off'' some of them by adding back a few items that should have been there in the beginning.

And there were add-ons to the basic budget, like $2 million for a mental health telehealth pilot programs to serve individuals outside Maricopa and Pima counties, an identical amount for entities that provide after-school programs to low-income individuals, a $1 million allocation for counseling in  southern Arizona and $500,000 for heat mitigation programs in the same area.

So where does the governor fit in for what he considers a bad budget?

"I'm not going totally put the blame on her,'' Contreras said.

"She has to sign the budget at the end,'' he said, saying that House Speaker Ben Toma and Senate President Warren Petersen also played a role.

"They have to run these two chambers here,'' he said. "Myself and (Senate Minority) Leader (Mitzi) Epstein, we're still not the ones dictating how the budget was built.''

But Epstein, a Tempe Democrat, said as far as she is concerned, Hobbs is not to blame for what she said has been decades of Republican policies of cutting spending

"Gov. Hobbs has done everything she could to deal with this intractable (Republican) caucus,'' she said. "And it's a lot better than it would have been without Gov. Hobbs.

Sen. Anna Herandez, however, is not willing to let Epstein - or the governor - off the hook.

"There's been a failure in leadership that could have gotten us a better budget,'' the Phoenix Democrat said.

"You should also have a spine,'' she said.

"You should have the back of your rank-and-file Democrats that are fighting for the people of Arizona,'' Hernandez said. "My leadership, from the very top of the (executive) tower failed me and all of the people of Arizona by the process that this budget was delivered.''

They aren't the only ones angry with the governor. Add to that list Attorney General Kris Mayes who blasted the idea, approved by Hobbs, to take $195 million from a settlement the state made with opioid manufacturers and pharmacies to deal with the costs of treating those who became addicted. Instead, it will fund what the attorney general says is "backfilling'' a budget deficit at the Department of Corrections, Rehabilitation and Reentry.

She contends that transfer violates the terms of the deal, signed by a federal judge, that restricts how those dollars can be used. And, the swept funds aside, Mayes argues that puts the entire $1.14 billion settlement in legal jeopardy.

Lawmakers did add verbiage saying that the funds can be used only for the agency's costs of care, treatment, programs and other expenses for individuals with opioid use disorder and co-occurring substance use disorder or mental health conditions or for any other approved purposes as prescribed in a court order, a settlement agreement or the 'One Arizona' distribution of opioid settlement funds agreement that is entered into by this state and other parties to the opioid litigation.''

Mayes called it an "egregious grab,'' saying it still doesn't comply with the process that requires the funds be awarded by competitive bidding. And she said is exploring legal options.

Hobbs declined an interview request to talk about preparing the budget and, specifically, about what some Democratic lawmakers were saying about what was presented to them as a finished product.

But press aide Christian Slater, in a prepared statement, said that there were 38 budget meetings from May 2 until the plan was adopted "to inform Democratic legislators of negotiations, hear their priorities, and receive feedback.'' Some of those, he said, were just "staff to staff,'' with other including Democratic legislative leaders and members "and at times the governor herself.''

None of this is to say that Republicans who refused to support the package are any more happy with their own leadership.

"Many of my colleagues on this side of the aisle think that Katie Hobbs is not particularly bright,'' said Rep. Alexander Kolodin, R-Scottsdale, as he voted against the package. "But today she has certainly outplayed us, because she's playing the long game.''

And Rep. Barbara Parker said she thought that, as a member of the House Appropriations Committee, she should have been involved in the negotiation process to represent her Mesa constituents to get a fiscally responsible budget.

"It's been implied that I'm asking for something unreasonable or that I'm not working with the body on this,'' she said. "And I want my voters to know that I continued to plead for a little bit of policy that I consider Republican platform principles, conservative and constitutional,'' she said. "And I didn't get those requests.''

But Rep. Travis Grantham, the House speaker pro-tem, said his party members should recognize reality.

"We have a one-seat majority in the Arizona House, we have a one-seat majority in the Senate,'' the Gilbert Republican said, noting that means if not every Republican goes along, leadership has to get votes from Democrats.

And on top of that, he said, the governor who can sign or veto the budget - and even has the constitutional power to line-out expenditures with which she disagrees - is a Democrat.

Personally, Grantham said if he got to prepare a spending plan "most of what's being asked for wouldn't be in it.''

"But I can't get that because I'm not in a majority with 50 other people who think like me,'' he said. "This is how it works.''

And Petersen, finding himself attacked on social media, penned a similar response.

"This is an incredibly conservative budget, especially in light of divided government,'' he posted.