Budget battles ahead
Yay, it's budget season! ... Only frauds pay to play ... And buy your tiny Tic Tacs with a $500 Trump note.
In three weeks, the Arizona state government will shut down.
That is, unless lawmakers and Gov. Katie Hobbs can come to a bipartisan agreement on a new state spending plan that patches the billion-dollar deficit that they blew in Arizona’s budget last year.
The 2024 legislative session is dragging. Lawmakers haven’t been meeting regularly in months. Most weeks, they show up for one day. Some weeks, they don’t even bother.
There’s not much left to do except negotiate and pass a budget. But the vast majority of lawmakers aren’t in on that process — even they don’t know what’s being negotiated between legislative leadership and the governor, or if they’re close to a deal.
That’s starting to change this week.
Rank-and-file Democrats have been getting their first peek at the governor’s negotiated budget proposal — which contains some significant changes from the plan she presented in January that sought to dramatically scale back school vouchers and eliminate private school tax credits.
Republican lawmakers are being invited to hear her negotiated proposal today and next week, per Republican Sen. John Kavanagh, chair of the Senate Appropriations Committee.
“I think it's moving, it could be next week, but yeah, there's definitely movement. I just don't know how members on both sides are gonna react,” Kavanagh said.
Democrats didn’t get the kind of detailed spreadsheets, or “budget docs,” in their meeting with the Governor’s Office that could signal a budget deal is imminent. But she told lawmakers to block off chunks of next week to dive into those budget docs — if the conversations with Republicans go well.
Last year, lawmakers cobbled together a budget that could garner widespread bipartisan support in a divided government by giving lawmakers their own individual pots of money – up to $30 million each — to spend as they pleased in exchange for supporting the overall package.
This year, those slush funds are dry.
Lawmakers overspent and are now staring down a $1.3 deficit for the current and upcoming fiscal years. Still, that’s still better than the original estimates in January, which bordered on $2 billion.
Even if negotiations go well, the budget that ultimately gets crafted is gonna stink, Democratic Rep. Stephanie Stahl Hamilton predicted.
“Nobody is going to be happy with this budget,” she told us.
Regardless, Arizona needs a budget. And soon.
The biggest point of contention will be the cuts, of course.
Lawmakers overspent last year and now they’ve got to come up with $1.3 billion to fill the hole. Hobbs originally proposed a bevy of cuts to balance her budget proposal, besides the politically impossible idea of slashing school choice funding for programs like Empowerment Scholarship Accounts and School Tuition Organizations.
The easiest cuts include culling back one-time spending from last year for buildings, roads and infrastructure projects that haven’t yet begun construction. Both Republicans and Democrats have signaled openness to postponing those projects, but that’ll only solve so much of the problem.
“I think that the governor is trying to take a scalpel to the budget to carve out where we can make the cuts very carefully and gingerly, with an eye of making sure the people of Arizona aren't feeling the pinch. We're not in a good space,” Stahl Hamilton said.
And while Republicans want to help tackle the deficit by cutting state agencies to the tune of $100 million, Hobbs’ plan puts that number at closer to $50 million, a point that hasn’t been floated to Republicans yet, the Governor’s Office told Democrats.
Clearly, there’s still a lot to negotiate.
However, both sides seem to agree that education won’t be on the chopping block, even with the deficit. But whether schools will receive more funding is an open question.
The Governor’s Office has backed off its calls to defund school vouchers, we hear, and in exchange are seeking reforms like fingerprinting and mandatory certification for private school teachers. It’s unclear how Republicans will react to the proposal, but so far, they’ve been pretty resistant to the idea.
When it comes to education priorities, Republicans started the year with a big press conference announcing their plans to new and extend Prop 123, former Gov. Doug Ducey’s plan to draw more from the state land trust and put it into education.
Hobbs has her own Prop 123 extension plan, and really, the two ideas are not that different.
But lawmakers now seem unlikely to revive a Prop 123 extension plan as part of the budget process. Considering the Ducey plan doesn’t actually expire until mid-2025, lawmakers can still pass it next year and call for a special election to ratify it in the spring.1
“I think anything controversial that can wait, is gonna wait. I don't think everybody wants to start stirring the pot when we want to get the budget done. Yeah, people want to get out and campaign,” Kavanagh said of the Prop 123 plan.
Similarly, lawmakers started the year hopeful they could lift or eliminate the Aggregate Expenditure Limit (AEL), a school spending cap set in 1980. Because they have until March 2025 to lift the cap, it’s possible they simply kick the can down the road to next year.
But lifting the AEL is still among Hobbs’ top priorities, her office told lawmakers in their meetings, and she’s willing to veto any budget that doesn’t include a vote to do that.
Mistakes were made: A 38-page audit on massive Medicaid fraud that cost Arizona’s taxpayers an estimated $2.5 billion revealed outrageous scams — including providers billing for alcohol dependence treatment for a toddler, infant and someone who was incarcerated at the time — but doesn’t place blame on any specific actors, the Republic’s Stephanie Innes reports. Instead, auditors recommended 25 improvements to prevent future fraud. Speaking of (potential) fraud, Republican Sen. TJ Shope is asking Attorney General Kris Mayes and Maricopa County Attorney Rachel Mitchell to look into Gov. Katie Hobbs’ ties to a state contractor that donated to the governor and got its reimbursement pay increased, per the Republic’s Stacey Barchenger.
“I do believe at worst there is the potential for an actual pay-to-play situation here, which could bring a potentially criminal aspect into this,” Shope said. “At best it's something that most definitely doesn’t pass the smell test, the headline test.”
We administer the headline test daily. Please pay to play.
Siempre luchando: LUCHA is suing to keep HCR2060, a ballot referral state lawmakers approved Tuesday that makes crossing the border a state crime, off of the November ballot, Captiol scribe Howie Fischer reports. An attorney for the progressive group is arguing the measure has three major unrelated provisions that violate a state constitutional clause limiting measures to one subject. The bill’s sponsor, House Speaker Ben Toma, said all the measures relate to the border, even one that ups the penalty for fentanyl sales.
A welcome back kiss: Former president Donald Trump invited former Maricopa County Sheriff Joe Arpaio on stage for an awkward kiss during his stop in Phoenix yesterday. The 34-time convicted felon also endorsed Republican U.S. Rep. Debbie Lesko for her bid on the Maricopa County Board of Supervisors. The Republican supervisors refused to overturn the results of the 2020 election, but Lesko didn’t have the same reservations while voting as a member of Congress. Also, the school affiliated with Trump’s venue of choice, Dream City Chuch’s Christian School, received $900,000 in school voucher funds from July 2022 to June 2023, per the Republic’s Madeleine Parrish. The school collaborates with Turning Point USA to teach a curriculum void of “wokeism” and “radical LGBT agendas.” Finally, just in time for Trump’s visit, Sen. Jake Hoffman pleaded not guilty to felony charges tied to his role in the fake elector scheme to give the 2020 presidential win to Trump, Elena Santa Cruz and Stacey Barchenger report for the Republic.
“I don’t kiss men, but I kissed him,” Trump said.
Repatriated to a country they’re not from: President Joe Biden’s new anti-asylum executive order means somewhere around 700 people per day will be “repatriated” through the Tucson Sector of the U.S. Mexico border into four Sonoran cities, Emily Bregel writes for the Arizona Daily Star. Migrant shelter operators in Sonora worry the exodus will put asylum seekers at risk of being kidnapped or extorted by the Cartels.
Not tough enough for Tombstone: Tombstone mayoral candidate Kenneth Palkow dropped out of the race, saying the local marshal “strong-armed” and bullied him out of the race by telling him he couldn’t win against the incumbent mayor and that it would be embarrassing to lose, the Herald-Review’s Lyda Longa reports.
“This is the definition of the ‘good ‘ol boys,’” Palkow told Longa. “I can’t come up with a better word than ‘strong-arm.’”
All bad news is fake news: Navajo Nation President Buu Nygren is mad at the Navajo Times for reporting on the sexual harassment allegations that his vice president, Richelle Montoya, launched against him, the Navajo Times’ Krista Allen reports.
“The media is interfering with my administration! Get angry about this!” Nygren told his supporters. “Say this isn’t right and say this is all nonsense.”
Donald Trump made a show of blaming President Joe Biden for inflation during his speech in Arizona yesterday when he pulled boxes of regular and mini-sized Tic Tacs2 from his suit jacket.
But Arizona Congressman Paul Gosar has the perfect solution: $500 bills with Trump’s face on them.
Gosar said “Bidenflation continues to devalue our currency,” and higher denominations would discourage reliance on digital banking, while Trump’s face on legal tender would be a prized collector’s item, the Today's News-Herald reports.
It’s a constitutional change, so it would require voter approval.
We had forgotten this gem until we Googled “Trump Tic Tac,” but Trump mentioned Tic Tacs during the famous “grab them by the pussy” hot mic tape, and the company denounced him in 2016.
In the interest of full reporting, you (and other media outlets) should be pointing out that Hobbs initially refused to disclose the donors to her inaugural fund, only doing so under intense public pressure. And that disclosure is the only reason we know about the group home operator’s contribution. Put another way, the initial intention not to disclose the contribution makes this look even worse.
John Kavanaugh (the notorious multi-pension dipper) is head of appropriations. Which means if it has to do with State money...he is the last word. This can't suck enough. Once again...under GOP leadership...we find ourselves under water to the tune of $1.3 billion. We have a golden opportunity to vote these honks out in November. Please consider voting BLUE up and down the ballot.