PHOENIX — Unable so far to craft a budget deal despite — or because of — an anticipated $5 billion state budget surplus, Republican legislative leaders are looking for an exit strategy to finally shut down the legislative session that began in January.
And one of them involves simply doing the minimum required of lawmakers and getting out of town.
The activity — or, as the case appears, lack thereof — comes as lawmakers return to the Capitol on Monday for what, according to the official calendar, is supposed to be the last week of the 2022 session.
Only thing is, efforts to adopt a spending plan for the upcoming fiscal year have so far failed to jell as individual lawmakers jockey for how each wants to allocate about $1.3 billion in what is expected to be an ongoing surplus for things like new programs or tax cuts, plus perhaps another $4 billion in one-time funds that can be used for specific one-time projects like building bridges and roads or even paying off debt.
And the fact is that the Arizona Constitution gives lawmakers just one mandatory job: adopt a budget.
So a plan being shopped around to rank-and-file members involves enacting what might be called a “skinny budget,” essentially taking the current expenditure levels, adjusting for inflation and growth, and adopting those as the spending plan for the fiscal year that begins July 1.
House Majority Leader Ben Toma, R-Peoria, said he thinks that Democrats would go along with what would more formally be called a “continuation budget.”
But House Minority Leader Reginald Bolding, D-Laveen, said Republicans are fooling themselves if they think Democrats are willing to leave a that much money on the table unspent this coming fiscal year, to provide votes for a continuation budget.
“How do I tell a parent whose child is in a classroom with a substitute teacher to just wait one more year for your kid to get a full time teacher, or another who’s sleeping on the street in the Arizona heat another summer, to just say, ‘Stay on the street one more year because were’ not putting money in homeless shelters,'" he asked.
And his Senate counterpart, Rebecca Rios, D-Phoenix, said Senate President Karen Fann, R-Prescott, is offering nothing to Democrats to support a continuation budget.
“She recognizes if she gives us anything in this skinny budget, then it’s no longer a skinny budget and everybody’s going to want their items in there,” Rios said.
But Fann said she is willing to talk deals. And she said that at some point there has to be some common ground where everyone — or at least a majority of the lawmakers — get at least some of what they want.
In fact, Fann said she shares some of the priorities that Democrats have, like dealing with the homeless situation.
“If people are homeless because they have mental illnesses we need to get them better help so that we can get them back to some sort of a safe, fulfilling life,” she said. Ditto getting treatment for those living on the street who are addicted to drugs.
“I know a lot of people say that’s not our problem,” Fann said. “Well, it is our problem. And it’s a problem getting bigger.”
Fann said there are other possible compromises.
Democrats want a state version of the earned income tax credit, where those in low-paying jobs actually get some state cash. In exchange, Fann said, they might be willing to provide some votes for a proposal by Sen. Paul Boyer, R-Glendale, to expand the voucher program for private and parochial schools to include all families in poverty.
None of this talk of compromise with Democrats should be necessary. After all, the Republicans control both the House and Senate and the governor’s office.
But those margins are razor thin. And that has allowed Boyer — and possibly others — to hold out for things they want.
For Boyer, it’s not just voucher expansion.
He said voters made it clear in 2020 they want more funding for K-12 education by approving Proposition 208.
The only reason it didn’t take effect was that the Supreme Court said the cash raised by the 3.5% income tax surcharge on the wealthy could not be legally spent absent legislative action. But Boyer said the state, now flush with cash, could easily fund that $900 million from existing proceeds.
Democrats support that. And even Toma said that may be do-able.
But to complicate matters, he, in turn, wants something : universal vouchers, regardless of income or need, far more than Boyer is proposing.
“We either believe in parental choice, or we don’t,” he said. “You either believe that you know what’s best for your child or you don’t believe that you as a parent know what’s best for your child and the government knows better.”
That, however, remains a non-starter for Democrats.
And it’s that is the kind of stalemate that has so far held up progress on adopting a budget.
But trying to wrap up the session is even more complex than that. For example, Republicans want to repeal, re-enact and accelerate the $1.9 billion tax cut package they approved last year.
That measure collapsed all the income tax brackets into a single 2.5% rate. And the big winners are those who have taxable income of more than $159,000 a year — double that for married couples filing jointly — who faced a 4.5% tax rate.
Only thing is, foes of the plan gathered more than enough signatures to put the measure on hold until there voters could have the last word this coming November. But if the plan is repealed and replaced with something else, the petitions turned in seeking a public vote become meaningless.
“I have no sympathy for that argument whatsoever,” Toma said, saying that circulators lied to petition signers.
“The way it was done in front of Trader Joe’s by my house was ‘If you don’t sign this, they’re going to cut $2 billion from education,’ which is a complete lie first of all,” he said.
But Toma, who hopes to be House speaker next year, figures he and Republicans have time on their side if some decisions are deferred until after the 2022 election.
“At that point, I think the ratios will be a little bit better for us,” he said, the “us” being the Republicans who have just that one-vote edge in the House and Senate — and not a lot of wiggle room.
What would work in favor of the GOP is that it’s a midterm election, with an unpopular Democratic president in the White House. And the new legislative lines drawn by the Independent Redistricting Commission also appear to give Republicans an edge.
“I think it’s safe to assume they’d actually be a lot better,” Toma said.
Bolding, however, said Republicans are deluding themselves if they believe the 2022 election will be a GOP cakewalk. He said that ignores the reality of how well Democrats have done recently at the statewide level, voting not just for Biden but winning both U.S. Senate seats and statewide offices of secretary of state and school superintendent.
“I don’t subscribe to the notion that Democrats won’t have more people coming back to the legislature,” Bolding said. And there’s something else.
“Who’s to say who will be leading the governor’s office?” he asked. Even with Republicans maintain control of the House and Senate they could be forced to have to deal with a Democratic governor.
There’s another player in all this: current Gov. Doug Ducey who would have to agree to a continuation budget — or any deal at all.
“We don’t negotiate through the press,” said spokesman C.J. Karamargin.
But a skinny budget could prove unacceptable to Ducey. It would mean not just leaving that $5 billion surplus on the table for his successor but also giving up on enacting all the programs and tax cuts he wants to put an exclamation point on his final year in office.
There’s another factor a play that may help force a solution sooner rather than later, with or without Democrats.
It’s an election year, with an Aug. 2 primary. And early ballots go out 29 days before then.
The more time lawmakers spend at the Capitol, the less time they have to campaign, whether for reelection or some higher office. And there’s also the fact that state law precludes legislators from taking campaign donations from lobbyists while they are in session.
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