Key Points:

• The Senate passed the budget proposal on June 20

• Chamber claims bipartisan effort, declares itself finished with session

• Follows a House budget that was rejected June 13

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

The Senate passed its main feed bill, Senate Bill 1735, before ending a marathon session around 2 a.m. on June 20 with the chamber declaring its work, without permission from the House, finished for the session.

Still, Senate Republicans 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, although there were some notable differences.

For example, the original Senate plan didn’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,” Kavanagh said on June 16. “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 schools and school district additional assistance, $37 million for free and reduced lunch, and $18.5 million dedicated to 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.”