Skip to main content
Tags: arizona | budget | deficit | cuts | katie hobbs | legislature

Arizona Lawmakers Pass Budget Closing $1.4 Billion Deficit

Katie Hobbs speaking
Arizona Gov. Katie Hobbs (AP)

Sunday, 16 June 2024 10:56 AM EDT

Arizona lawmakers approved a bipartisan budget deal Saturday that erases a $1.4 billion shortfall by curbing spending on higher education, trimming funding for state agencies and raiding a host of special funds.

The spending plan is the result of weeks of negotiations between Democrat Gov. Katie Hobbs and Republican legislative leaders. Some conservative Republicans say the plan still spends too much money, while some Democrat lawmakers were disappointed they were not part of the negotiations. "This is a product of a divided government and some compromise — and sometimes if you can't find something good in this budget, you will not find anything good in any budget," said Republican Rep. Travis Grantham of Gilbert. In a statement Saturday, Hobbs said, "Arizonans can rest assured that their state has a balanced budget. I'm thankful for members of the legislature who came together, compromised, and passed this bipartisan agreement."

The budget retrenchment marks an extraordinary turnabout from just a year ago, when Hobbs and lawmakers projected a massive surplus and secured overwhelming support for the budget by letting lawmakers dole out money to their own priorities pet projects. But it soon became clear the state was taking in far less money than expected. Much of the reduced spending in the current budget proposal comes from delaying or eliminating some of the expenditures approved last year.

Nearly all state agencies will take a lump-sum cut, most of them 3.45%, though public safety agencies including the state police and prison system are spared.

On top of that, lawmakers cut funding for new school construction and a pot of money that districts use to pay for nonsalary items like textbooks and computers. Planned state building renovations were paused, including fixes for unreliable air conditioners at state prisons.

A planned $333 million deposit into a savings account for future water infrastructure was canceled. So were several highway projects, including pavement improvements, widening of Interstate 10 through Buckeye and an overpass at a major bottleneck on State Route 347 between Phoenix and Maricopa.

On top of the 3.45% cut all state agencies are facing, universities also will lose funding they use to make it more affordable for people to train to be teachers or primary care physicians. Funding also was cut for the Arizona Promise program that provides scholarships for low-income students.

In all, the budget cuts about $600 million from the current fiscal year, which ends June 30, and the next.

Approved general fund spending for the next fiscal year is $16.1 billion.

The budget shortfall is due mostly to plummeting revenues from a massive tax cut that took full effect last year, a decline in sales tax expenses as consumers face higher prices and skyrocketing costs from a school voucher program expansion. Hobbs has called repeatedly to reign in the voucher program but the idea is a nonstarter with the GOP legislative majority. The budget compromise includes only a small cut of $2.5 million to the program.

Despite a shortfall surpassing $1 billion, the state was spared the tax increases and deeply disruptive budget cuts that were required during the Great Recession. Lawmakers then slashed into virtually everything the state pays for, including K-12 and higher education, and resorted to extraordinary accounting gimmicks including mortgaging the House, Senate and Supreme Court buildings.

This time around, tax collections are projected to grow faster than expenses, so the budget is not out of balance over the long term. And the state now has hundreds of millions of dollars to sweep out of special funds.

Rep. Lupe Contreras, a Democrat from Avondale who serves as the House's minority leader, said he doesn't put all the blame on Hobbs for leaving out Democratic legislative leaders from negotiations. Republicans who run both chambers of the Legislature are to blame, too, Contreras said.

"Why weren't we there and having that conversation from jump?" Contreras said. "That's what should have been done."

A snag for the Republican-controlled Legislature in moving the budget was a plan to use millions of dollars from a settlement over the nation's opioid epidemic to help balance the state's budget. The multistate settlement will provide Arizona and its communities with $1.1 billion over 18 years. The budget includes using $115 million in settlement dollars to shore up funding in the budget year that ends on July 1 and the following year for the Arizona Department of Corrections, Rehabilitation and Reentry. Additionally, lawmakers want to shift another $40 million in each of the next two budget years toward the state's prison system.

Democrat Attorney General Kris Mayes said in a statement that Hobbs and Republican legislative leaders put the state's settlement dollars at risk and that she warned them that doing so is unlawful. "This is an egregious grab," Mayes said. "I will do everything in my power to protect these opioid settlement funds for all Arizonans."

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


Politics
Arizona lawmakers approved a bipartisan budget deal Saturday that erases a $1.4 billion shortfall by curbing spending on higher education, trimming funding for state agencies and raiding a host of special funds.
arizona, budget, deficit, cuts, katie hobbs, legislature
807
2024-56-16
Sunday, 16 June 2024 10:56 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
TOP

Interest-Based Advertising | Do not sell or share my personal information

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved
Download the NewsmaxTV App
Get the NewsmaxTV App for iOS Get the NewsmaxTV App for Android Scan QR code to get the NewsmaxTV App
NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved