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Legislative leaders plan early budget to quell holdouts

Karen Fann

Karen Fann

The Arizona House and Senate plan to release their own budget proposals in the third week of January, creating two or three distinct spending plans as the Legislature begins its 2020 business. 

And legislative leaders hope to reach a compromise between the plans and complete their budget by mid-February, even if that means a moratorium on all other bills, Senate President Karen Fann said. 

“If need be, we will be stopping all bill action,” said Fann, R-Prescott. 

By pushing the budget through early in the session, and threatening to halt individual lawmaker’s pet policy proposals if her caucus won’t play along, Fann can get out ahead of the danger posed by members who use razor-thin margins in both chambers to ransom their budget votes. Without Democratic support, Republicans can stand to lose one vote in the Senate and none in the House, and lawmakers frustrated GOP leadership by using that math last year to wrest concessions including expanded opportunities for survivors of childhood sexual abuse to sue their assailants, the repeal of a controversial $32 vehicle license fee and new trade offices in Israel and Mexico. 

Appropriations Committee members in each chamber began this process with distinct budget outlines that are now nearing reconciliation. By the first or second week of the session, legislative leaders hope to present a budget proposal to the governor and his staff, said House Appropriations Chair Regina Cobb, R-Kingman. Gov. Doug Ducey is expected to introduce his budget proposal Jan. 17.

“A month ago, it would have been true that [the House and Senate] had separate proposals,” Cobb said. “We’ve had some conversations with the Senate. We did our version, they did theirs, now we’re trying to get a legislative budget.”

Fann described the rough spending plan Senate Republicans have pulled together thus far as the “backbone of the budget,” that will be refined with requests from individual members. In the House, Cobb has been holding small-group and individual meetings with rank-and-file Republican members to go over the plan. Fann intends to start similar meetings next week. 

Leaders in both chambers declined to share specific priorities in their spending plans, saying it was too early to comment. But during interviews this fall, Fann and Cobb described funding for K-12 education and the Department of Corrections as priorities for all members.

“I want to make sure all the members hear about it in a group setting before it gets to the public,” Cobb said, though she confirmed that the basics of the House majority’s spending plan were hashed out. 

After group and individual meetings wrap up, leadership will meet with appropriations committee members and then to the rest of their respective caucuses for feedback, said House Majority Leader Warren Petersen, R-Gilbert. 

Beyond previously committed dollars, lawmakers will have about $170 million available for ongoing appropriations and $475 million in one-time spending, according to the Joint Legislative Budget Committee’s October budget update.

Total state revenue in fiscal 2020 is $325 million above where it was at this time in fiscal 2019, and $293 million above forecast, according to JLBC’s December monthly fiscal highlights.

Legislative budget staff reported that forecasting spring 2020 revenue collections was made difficult by the income tax cuts passed last session, but Senate Majority Leader Rick Gray, R-Sun City, said lawmakers know they’ll have additional revenue to deal with after passing their early budget.

“We are seeing growth, on a national level fortunately,” he said. “We will definitely see additional revenue.”

Gray said legislators will leave room to pass additional spending bills later in the session, to deal with the new revenue they expect. 

There’s also an appetite among some in the Republican caucus, led by Sen. J.D. Mesnard, R-Chandler, to use some of the state’s excess revenue to cut property taxes for businesses and homeowners.

Mesnard is drafting legislation to reduce the commercial assessment ratio — which essentially counts the assessed value of a business property at 18 percent of its cash value, rather than the 10 percent that residential properties are valued at — and changing K-12 funding formulas so taxpayers aren’t picking up as much of the burden on their county property taxes. 

Other Republican lawmakers are starting the session with ambitious plans to regulate short-term rentals, overhaul the criminal justice system, get electronic smoking devices out of public places and wrench authority over the state’s voucher program and election procedures from the new Democratic Superintendent of Public Instruction and Secretary of State.

But how long the session will last, and whether lawmakers get to their hot-button issues before fleeing to their districts to campaign ahead of an earlier-than-ever Aug. 4 primary election, depends on how quickly the budget passes, Fann said. 

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