It has been three weeks of legislative deadlock since the Senate passed a state budget including Medicaid expansion, but the gears are moving again and the House is getting ready to take a vote on the Senate’s budget plan.

House Speaker Andy Tobin assigned the state Senate budget package, which includes Gov. Jan Brewer’s controversial Medicaid expansion, to the House Appropriations Committee on June 4.

The move marked the beginning of the end of the legislative session that has already continued for more than 145 days, well past the 100-day goal. The state Constitution requires the Legislature to implement a spending plan before the new fiscal year begins on July 1.

“I think it’s time that a budget moves,” Tobin said. “We’re close enough on the budget, not all the I’s are dotted or T’s are crossed, but I think it’s close enough and we just need to get it out there.”

But the fight over the budget and Medicaid expansion is just beginning in the House, and the package must still get through the conservative Appropriations Committee before it can come to the House floor for a debate and vote from the full chamber.

Medicaid expansion opponents on the committee say they are ready to strip expansion from the package and decrease overall spending from the $8.8 billion budget.

Some committee members are even threatening to vote against a scaled-back budget that doesn’t include Medicaid expansion in order to prevent future amendments to swell spending and add back Medicaid expansion on the House floor.

But there appears to be little the committee can do to actually stop the budget package from reaching the floor, where a bipartisan coalition of Medicaid expansion supporters lie in wait to amend the proposal right back onto the budget, and possibly add back some of that spending.

Others have started advocating for a new Medicaid expansion bill that is separate from the rest of the budget to receive a vote from the House before the rest of the budget.

The question on most observers’ minds is whether Tobin can keep the entire process from spiraling out of control, and keep the budget from getting “hijacked” from GOP leadership in the House as it was in the Senate, where a coalition of six Republicans and 13 Democrats approved the package.

First stop: Appropriations

By assigning the health care portion of the budget to the conservative Appropriations Committee instead of the expansion-friendly Health Committee, Tobin is giving conservative Republican lawmakers a chance to rip the proposal apart.

The Appropriations Committee chair, Rep. John Kavanagh of Fountain Hills, said the committee will likely strip Medicaid expansion off the health care portion of the budget, and make cuts to the rest of the budget to reduce overall spending.

“I would be shocked if Medicaid expansion got out of (Appropriations),” Kavanagh said.

The Appropriations Committee is scheduled to take up the fight in the coming week.

In the end, however, expansion supporters, including the entire Democratic caucus, say they have at least the necessary 31 votes to undo whatever is done in the committee and pass a budget including Medicaid expansion out of the House.

That is why Republican Rep. Paul Boyer, who sits on the Appropriations Committee, is going to vote against the entire budget when the committee hears it.

Though Boyer said he actually likes the spending proposal House leadership has shown him — a draft of which will probably come out of the Appropriations Committee after amendments have been adopted — he said he won’t help enable Medicaid expansion supporters to amend expansion back onto the budget when it reaches the floor.

Boyer and others could temporarily kill the budget if a majority of the panel votes against it. But there are always ways to revive it.

Rep. Ruben Gallego, the assistant minority leader, said he is worried the committee may kill the budget bills, but he said the rules offer ways to get around the committee.

“We’re concerned obviously when something as important as Medicaid expansion and the state budget goes through such a partisan committee… But there are other ways to get these bills to the floor. The rules offer discharges, suspending the rules for the day, there are other ways,” he said.

The floor fight

Tobin said he hopes to get 31 Republicans to support the rest of the budget package, excluding Medicaid expansion, and avoid the type of budget “hijacking” that happened in the Senate.

The Senate budget package was originally authored by Republican Senate President Andy Biggs, a staunch opponent of Medicaid expansion. But the Senate coalition added Medicaid expansion and a handful of spending items totaling about $26 million into the budget, and Biggs voted against all 10 of the budget bills.

Tobin said that if a bipartisan coalition of mostly Democrats passes the Medicaid expansion portion of the budget in the House, as expected, he hopes to keep his caucus together on the other nine budget bills.

But even Tobin isn’t sure that is possible.

“That’s the idea, to have a Republican budget, they’re the majority. But can they come together on the budget? That’s the question,” Tobin said.

Though Tobin originally said there was no way the governor’s Medicaid expansion proposal would receive a hearing in his chamber unless it had his reforms, he now says that he couldn’t stop the proposal from coming through his chamber. And by giving up that fight, he can focus on keeping his caucus together on the rest of the budget.

“In my mind, it was never going to get a vote, but at that time, she didn’t have eight Republicans over here either. I’m a realist, I can disagree with the executive, and I have, but that would then lead into the budget process,” Tobin said.

His dilemma boils down to either pleasing the wing of his caucus that is staunchly opposed to expansion, or getting a budget out of the House that the Senate can agree with and the governor will sign.

Republican Rep. T.J. Shope of Coolidge, a Medicaid expansion supporter, said if Medicaid isn’t part of the budget, he will vote against it. But if Medicaid is part of the budget, he expects most of his fellow Republicans to vote against it.

In the end, he expects the coalition of Democrats and a few Republicans to pass the entire budget, although he said that is the last thing he wants.

“Look what happened in the Senate. As soon as Medicaid was added, Republicans voted against every other (budget) bill,” he said.

Rep. David Livingston of Peoria, an opponent of expansion, is advocating for a separate vote on a new Medicaid expansion bill that isn’t part of the budget. He said if that doesn’t happen, he and other Republicans will oppose the entire budget, leaving no way to pass it except through a coalition of mostly Democrats and a few Republicans who support expansion.

If he can get a separate vote on a new Medicaid expansion bill, he and others will work with the speaker to craft a budget they can support, though he admits it will probably get vetoed by the governor.

“If (Medicaid expansion) is on the budget, a majority of the majority will not vote for it. And then the governor needs to decide if she’s willing to sign a Democrat budget in a state that is all Republican,” Livingston said.

Gallego said he and other Democrats will show restraint on their amendments to keep the coalition of Republicans on board with Medicaid expansion, and try to not scare off other Republicans from the rest of the budget.

That said, Democrats don’t plan to support the House changes to the budget Tobin is proposing.

“I think the budget is going to be fairly close to what came out of the Senate, no matter what. Our goal is just to get this through and we’ll hold back on our amendments as much as we can,” Gallego said.

But Gallego said he doesn’t see many members of the Republican caucus coming on board with any part of a budget that includes Medicaid expansion, and expects the budget vote to go down in the House much the same as it did in the Senate: with mostly Democratic support.

“Sometimes when you do something right, you might as well do it again. Let’s not reinvent the wheel with this,” he said.

House changes to the budget

In his attempt to hold the Republican caucus together on the other nine budget bills, Tobin has begun shopping around for votes on his changes to the Senate spending proposal.

In total, Tobin is proposing an $8.778 billion spending plan, which is a $289.4 million increase over the current year. That’s about $129 million less than proposed by Gov. Jan Brewer and $45.7 million less than the Senate’s budget.

There is a possibility the House could add $29 million in economic development spending, which would make the House budget only $16 million less than the Senate spending plan.

However, Tobin said even he thinks that is too much spending, and other Republicans agree.

“I think the budget that I’ve even presented is too high. However, when you’re governing, you have to find where’s the happy medium, where’s the sweet spot,” Tobin said.

The House spending reductions include a $9 million cut to the Department of Economic Security, mostly from child support services and child care caseload spending.

Tobin’s budget changes include a nearly $20 million reduction to the Arizona Department of Education, mostly from money allocated for computer system upgrades the department sought. The House wants to allocate about

$5.4 million for the upgrades, compared to the Senate’s $22.4 million.

The House budget also includes about $4 million less than the Senate’s for School Facilities Board building renewals.

The House budget cuts $23.5 million from continued retention payments for at-will employees, but includes $13.9 million for retention payments for state employees who switch to the at-will system.

The House also cuts $5 million from performance funding for the university system, but adds $4 million for rural community colleges.

Tobin said that besides trying to get his caucus on board with the measure, he hopes the governor will accept his budget changes, even though it doesn’t include a few of her key spending proposals.

“I don’t think (the proposal) is unreasonable,” Tobin said.

Livingston has put out his own budget plan which offers a 5 percent cut across the board and is structurally balanced in the coming fiscal year, but doesn’t have the OK from leadership.

He said the plan has the support of the majority of the Republican caucus, but that isn’t enough to pass it.

Possible problems

Even if Medicaid expansion makes it out of the Legislature, its fate is far from assured.

Opponents of Medicaid expansion hope to kill the proposal when it comes to a vote from the full House by adding a clause stating that because the measure increases state revenues, it must receive support from two-thirds of lawmakers in both chambers, as required by the voter-approved Proposition 108 from 1992.

Amending the proposal to include a two-thirds requirement, however, needs a minimum of 31 lawmakers, which opponents don’t appear to have.

Ultimately, the fate of Medicaid expansion will probably be left up to the courts. Conservative groups such as the Goldwater Institute are already threatening a legal challenge if the proposal passes without two-thirds of the lawmakers in support.

The governor’s legacy proposal may also face a challenge at the ballot box in 2014.

A seldom-used clause in the Arizona Constitution allows almost any measure enacted by the Legislature to be put to the ballot in the next general election. At least one group, headed by two former Republican senators, is preparing to collect the roughly 86,400 valid signatures from registered voters necessary to force a referendum.

Just getting the measure on the ballot would be a win because it would put the measure on hold until voters can weigh in during the 2014 November election, said referendum organizer and former Sen. Frank Antenori.

“The beauty of it is even if this fails at the ballot, the Medicaid expansion won’t go into effect until 2015. In 2015, Jan Brewer isn’t in office, in 2015, there’s a new Legislature up there. In 2015, they can do a special session their first week in office to wipe this thing out even if it loses at the ballot,” Antenori said.

Brewer’s office said it does not believe a referendum on Medicaid expansion is even legally permissible, based on a 1992 Court of Appeals ruling out of Greenlee County.

In Wade v. Greenlee County, the appellate court said that a half-cent sales tax increase, which the Board of Supervisors passed, was not subject to referendum due to a provision in the Arizona Constitution exempting legislation passed “to provide appropriations for the support and maintenance of the Departments of the State and of State institutions.”

The Arizona Supreme Court denied review of the case. As such, the appellate court ruled, tax measures are not subject to referenda.

“Permitting referenda on support measures would allow a small percentage of the electorate, in Arizona five percent, effectively to prevent the operation of government,” the ruling read. “Because any law is ineffective after referendum petitions are filed and until the election, five percent of the electorate could, in the case of support laws, for a period of over a year prevent what a majority would believe to be necessary government programs.”

In the meantime, supporters of Medicaid expansion say they believe Medicaid expansion can beat back the legal and political challenges if they can just get it to Brewer’s desk.

“We’re confident in the governor’s interpretation that we’re going to pass this in the right manner and it won’t get struck down,” Gallego said.