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Legislative leaders want to pass budget ASAP, governor’s staff says it’s ‘false urgency’

Legislative leaders want to pass budget ASAP, governor’s staff says it’s ‘false urgency’

budget, Kavanagh, lawmakers, Hobbs, AHCCCS
Republican Senate leaders said on Tuesday that the Legislature is working with Gov. Katie Hobbs to pass Arizona’s budget in the next two weeks, citing an April deadline connected to federally allocated Medicaid funding, but the governor’s staff say it’s a play to create “false urgency.” (Deposit Photos)

Republican Senate leaders said on Tuesday that the Legislature is working with Gov. Katie Hobbs to pass the state’s budget in the next two weeks, citing an April deadline connected to federally allocated Medicaid funding, but the governor’s staff say it’s a play to create “false urgency.” 

By April 1, Arizona’s Medicaid agency the Arizona Health Care Cost Containment System, needs the state’s permission to spend federal dollars it was allocated earlier in the pandemic. Rep. Leo Biasiucci, R-Lake Havasu City, has a bill that could address that independently of the budget, but Senate leaders say they want to tie the two things together. 

Kavanagh, budget, Hobbs, Petersen, AHCCCS
Sen. John Kavanagh, R-Fountain Hills

“Given that we have in two weeks a $3 billion AHCCCS shortfall if we don’t vote on that – which would be in the budget – we can’t wait that long, and the speaker and the president are in discussion with the governor,” Senate Appropriations chairman John Kavanagh, R-Fountain Hills said. Senate President Warren Petersen, R-Gilbert, said in a text that he also wants the budget moved before the April deadline. 

Hobbs’ spokeswoman Josselyn Berry showed skepticism. 

“While we appreciate their sense of urgency on making sure 1/3 of Arizonans don’t have their healthcare threatened, there is literally a bill to prevent that – HB2624, that they could pass today if they wanted,” Berry said in a text. “That’s how it’s been handled in the past three years. But it sounds like they want to refuse to pass that bill in order to create false urgency around the budget.” 

In terms of whether the governor is also using April 1 as a deadline the budget must pass by, Berry said “we are not.”  

The AHCCCS deadline relates only to federal funds, but “money bills” are often tied into a budget bundle, so it’s preferable for some members to move the whole thing now. “It’s part of the budget and even the governor said she wanted all the money items in the budget,” Kavanagh said.  

Hobbs vetoed Senate Bill 1184 earlier in the session which would have allocated about $270 million from the state general fund. She wrote in her veto letter that it would be irresponsible to sign the bill then separately from all the other “money bills” that usually pass with the state budget. Petersen cited that letter as a reason to tie the AHCCCS spending permission to the state budget, therefore requiring that the budget move in under two weeks. That’s not everyone’s feeling. 

Hobbs, budget, Kavanagh
Gov. Katie Hobbs speaks with the media after the grand opening of Homebase hosted by Native American Connections in Surprise on Feb. 2. (Photo by Gage Skidmore via Flickr)

Mike Haener, a consultant who led Hobbs’ transition team, said that the AHCCCS money isn’t state general fund money and isn’t really tied to the budget. “To spend down the public health dollars that the federal government has provided to AHCCCS they have to have the authority to spend it,” he said.  

“The two are not related at all. You could have done this bill as a standalone inside or outside of the budget, there’s nothing that’s related really to the budget, Really, there’s no general fund money,” Haener said of the budget and the AHCCCS money. 

This is the latest in a series of strained budget negotiations throughout the session. Hobbs put out a budget proposal with provisions for things like ending universal Empowerment Scholarship Account (ESA) expansion, which Republicans wouldn’t consider. Republican leaders in the House and Senate sent Hobbs a budget proposal with only last year’s ongoing funds included, which she vetoed and called a “nonstarter.” 

Senate Republicans requested budget priorities with dollar amounts from Senate Democrats earlier this month but didn’t receive the list. Instead, Sen. Minority Leader Mitzi Epstein, D-Tempe, said that she would give Republican leadership her caucus’s priorities in mid-April. Kavanagh said House Democrats made a similar response to the request. 

Republican leaders in the House and Senate collaborated on a budget that the Republicans are on board with and are now working directly with Hobbs. “The speaker and the president are going to be meeting tomorrow with the governor,” Kavanagh said on Tuesday. 

Arizona Capitol Times reporter Nick Phillips contributed to this report. 

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