Key Points:

• The Senate Appropriations Committee passed the budget proposal on June 17

• The budget received bipartisan support despite some disagreements 

• A full Senate vote is expected on June 18

The Senate Appropriations Committee passed a $17.6 billion state budget proposal on June 17, which received more support from Democrats than the version the House passed last week.

Senate Republicans released the budget the night prior after spending several weeks negotiating with Gov. Katie Hobbs’ staff. They lauded their proposal as a bipartisan effort that preserves conservative priorities while investing in public safety, education, transportation, water and public health.

The House passed a budget on June 13, but Hobbs referred to the budget as “dead on arrival” and Senate Republicans criticized the proposal ahead of the Senate’s own budget release.

“This budget is viable, unlike the fantasyland budget proposed in the House,” said Senate President Pro Tempore T.J. Shope, R-Coolidge. “Elections have consequences. We are in an era of divided government, and we must proceed as such. Republicans can’t get everything they want, and neither can Democrats.”

Senate Appropriations Committee Chairman Sen. John Kavanagh, R-Fountain Hills, acknowledged there were similarities between the two proposals, but noted some exceptions.

The Senate’s plan doesn’t include the 2.5% tuition cut for in-state university students or the three-year tuition surcharge freeze, a major priority for House Republicans.

“Other than that, the budgets are not terribly different,” said Kavanagh. “Frankly, there isn’t that much money for people to make mischief with.” 

During the Senate Appropriations hearing, Kavanagh highlighted a number of provisions within the proposal, including an increase in the personal business property tax exemption from $270,000 to $500,000, $83 million in infrastructure investments, $54 million to finish projects along State Route 347 and a 5% percent increase for Arizona Department of Public Safety officers.

He also noted the $183 million for school building renewal grants and projects, $29 million for charter school and school district additional assistance, $37 million for free and reduced lunch, and $18.5 million dedicated for programs serving the homeless.

“We don’t have that much extra cash this year, but there are a lot of good things in this budget,” he said.

Despite those allocations, Democrats lamented the lack of money for education and programs for people facing eviction and homelessness, while some Republicans wanted more money for law enforcement and corrections officer raises.

“We have decimated our revenues,” said Sen. Mitzi Epstein, D-Tempe. “Year after year, this body gives carve outs, loopholes, extra little gimmes to special people who can afford a very highly paid lobbyist and therefore we end with not enough revenue to pay for our schools, not enough revenue to pay for housing. These are fundamental things.”

Epstein said she was concerned that the budget wouldn’t extend the state’s Low Income Housing Tax Credit program, which is scheduled to sunset at the end of 2025 without renewal.

“We need to have that investment if we’re ever going to tackle (the) housing situation. We need ongoing help,” she said.

Sen. Vince Leach, R-Tucson, disagreed with a provision to take money from the Prescription Drug Rebate Fund and use it as a spending “tool.” He also criticized how SPEED bonds are distributed to the state’s universities.

In addition, the budget doesn’t allocate enough money to give pay increases to state corrections officers and Arizona Department of Public Safety officers, which could lead to those agencies losing personnel who seek more money elsewhere, Leach said.

“(At) 5% … we’re going to lose people,” he said.

Although lawmakers weren’t completely satisfied with all the provisions, crafting a bipartisan budget calls for compromise from both sides of the aisle, Kavanagh said.

“This is a bipartisan budget,” he said. “And one of the characteristics of a bipartisan budget is that neither side gets everything they want.”

Correction: This story has been updated to remove a false statement concerning a one-year continuation of a hospital tax.