Key Points:

• The Senate passed the budget proposal on June 20

• Chamber claims bipartisan effort, declares itself finished with session

• House called for a continuation budget to keep negotiating passed deadline

The Senate passed its $17.6 billion budget proposal in the early morning of June 20 despite some disagreements among Republicans over a series of rejected amendment proposals and dissatisfaction from Democrats that the budget didn’t adequately address affordable housing, education and homeless programs.

The Senate passed its main budget feed bill, Senate Bill 1735, before ending a marathon session that concluded around 2 a.m. The chamber then passed a vote to declare its work for the year complete, without the House’s permission. 

However, House Speaker Steve Montenegro issued a statement late June 20 saying the Senate budget does not have the votes in the House with Democrats and Republicans in the chamber opposing the proposal.

Montenegro said the House is drafting a continuation budget to keep the state operating past June 30 and avoid a government shutdown.

“House Republicans have worked in good faith throughout the session. Last week, we did our job — passing a balanced budget that prioritized public safety, infrastructure and government accountability. That budget was ignored by the Senate,” Montenegro said. “The House is not going to be forced into a take-it-or-leave-it deal that doesn’t reflect the will of our members or the people we represent. We will do what responsible legislators should do: Take action to keep government running and protect Arizona taxpayers.”

The House passed a budget on June 13, but Gov. Katie Hobbs referred to the budget as “dead on arrival” and Senate Republicans criticized the proposal ahead of the Senate’s own budget release. The House proposal was created without direct input from the Senate or Gov. Katie Hobbs’ office.

Senate Republican leaders who helped negotiate the budget lauded their proposal as a bipartisan effort that preserves conservative priorities while investing in public safety, education, transportation, water and public health.

“In the wake of last year’s state budget, where Republican lawmakers reduced spending, shrank government, and eliminated a $1.4 billion deficit, Republicans are now focused on providing the men and women in public safety with raises, bonuses, and additional resources to better serve our communities, help secure our border, and protect our citizens from harm,” said Senate President Warren Petersen in a press release statement.

Some provisions they highlighted include a 5% pay increase for Arizona Department of Public Safety officers and 4% one-time bonus for correctional officers, and $113 million to finish work along State Route 347, widen Interstate 10 between Citrus Road and State Route 85 in the West Valley, and pursue other transportation projects in the state.

The budget also includes $183 million for school building renewal grants, used for school capital repairs; $66 million for additional assistance to school districts and charter schools; and provides K-12 supplemental funding for districts, charters and Empowerment Scholarship Accounts.

In addition, the budget fully funds the Division of Developmental Disabilities program, which was in danger of running out of money before Gov. Katie Hobbs signed a bipartisan emergency funding measure in April.

Some last minute amendments added to the budget included increasing the appropriation to the Department of Economic Security for homeless services to more than $19 million, as well as a measure that prohibits the Maricopa County Board of Supervisors from reducing funding to the Maricopa County Recorder’s Office below its adopted budget amount for the fiscal year.

Sen. Jake Hoffman, R-Queen Creek, criticized the amendment for not doing enough to protect County Recorder Justin Heap, who has clashed with the County Board of Supervisors over election responsibilities.

“It does nothing of material value to fix this problem,” Hoffman said. “It is lipstick on a pig so that people can say they did something without actually having to do it. Katie Hobbs should have been told to pound sand.”

Hoffman, chair of the Arizona Freedom Caucus, introduced an amendment that would’ve appropriated $4 million to the County Recorder’s Office and prohibited the Board of Supervisors from dictating how to use the money. He also attempted to add a similar measure for the Yuma County Recorder.

Those amendments were among several measures introduced by Hoffman that mirrored some of the provisions from the $17.3 billion House budget, which was deemed by some Republicans as more conservative than the Senate proposal.

Hoffman also attempted to add provisions to Senate Bill 1742, the budget reconciliation bill for higher education spending, including a 2.5% tuition reduction for in-state students at public universities.

His amendments to the bill would have allowed private institutions, such as Grand Canyon University, to participate in the Arizona Teachers Academy and prevented universities from subsidizing tuition for undocumented students.

Sen. John Kavanagh, R-Fountain Hills, spoke in opposition to Hoffman’s amendments, saying the proposals weren’t part of the original negotiations and would result in an automatic veto from Hobbs.

Hoffman criticized other Republican members for acquiescing to Hobbs instead of opposing her.

“The power of the purse doesn’t belong to the governor; it belongs to us,” he said.

While Republicans sparred over certain provisions, Democrats also expressed disapproval at items in the budget, as well as what was lacking.

They criticized the measure for failing to adequately address affordable housing, education funding, services for the homeless and people who are evicted, and the Empowerment Scholarship Accounts program.

Sen. Analise Ortiz, D-Phoenix, lamented the budget not extending the Low Income Housing Tax Credit program as home prices and rents continue to increase. 

Ortiz also mentioned a number of affordable housing bills that stalled this session, including the bipartisan Arizona Starter Homes Act, which she supported.

“What do we have to show for when headlines continue to say homelessness is increasing?” Ortiz said. “What do we have to show when the headlines are showing that evictions are still breaking records?”

Sen. Catherine Miranda, D-Laveen, opposed language in the bill that could “open the door” for state law enforcement agencies to enforce immigration policies, comparing it to the controversial Senate Bill 1070 immigration law passed in 2010.

“In this current climate, I cannot support a budget that includes language regarding the enforcement of SB1070, which was the groundwork for all the harm and destruction we currently see this administration causing,” Miranda said.

Senate Minority Leader Priya Sundareshan, D-Tucson, thanked her Democrat colleagues for working with Republicans and the governor’s office to craft the proposal, but still voted against the measure. She blamed the Empowerment Scholarship Accounts and flat tax rate for preventing the legislature from supporting other initiatives.

“This budget, like those of many previous legislatures, fails to meet the moment in many ways,” Sundareshan said in a prepared statement. 

The House will now determine the budget’s fate, with some of the chamber’s Republicans saying on social media they will not support the proposal.

“I’ll make this simple, I’m voting NO on the budget coming from the Senate,” said Rep. Nick Kupper on X. “Not because it’s a bipartisan budget, but because I’m philosophically opposed to all the backroom deals that were made to get it passed.”