housing | Arizona Capitol Times

2024 spending spread from schools to a rodeo and more

A cowboy competes in the saddle bronc competition during the Prescott Frontier Days Rodeo, Wednesday, July 3, 2013, in Prescott. The rodeo is earmarked to receive $15 million from the fiscal year 2024 state budget. (AP Photo/Julie Jacobson)

The budget crafted by Gov. Katie Hobbs and state lawmakers includes a tax rebate, big-ticket spending packages and – in a break from tradition – funding for scores of small, local projects.

The budget deal moved through the Legislature this week as a 16-bill package and will supply state funding for fiscal year 2024, which begins on July 1, 2023.

The $17.8 billion budget is balanced, meaning estimated revenues match planned spending under the plan, according to a Joint Legislative Budget Committee analysis published on May 10. But the deal includes plans to spend the state’s more than $2 billion budget surplus now rather than preserving the surplus going forward. It does not, however, touch the rainy-day fund.

The full budget comprises 16 different bills that, combined, run more than 200 pages. Below are some highlights of the deal.

EDUCATION

In her State of the State Address earlier this year, Hobbs indicated that education was her top priority for this session, specifically saying she wanted to increase funding for public schools and to pay teachers more, so that more educators keep working in Arizona classrooms. The final budget includes substantial new funding for public education, but it also allows the state’s universal school voucher program to continue growing unabated – something that has angered Democrats and that Hobbs herself described as a compromise.

The K-12 education budget maintains a 0.9% increase in the base level funding and includes a one-time $300 million injection into the state aid formula by way of the Arizona Department of Education.

Districts also saw a $20 million increase in additional assistance, and $183 million was put toward school building renovation. Individual schools and districts can apply for a slice of that $183 million through the School Facilities Board. Other K-12 spending includes $15 million to dual enrollment programs, $10 million to increase administrative funding and $3 million for professional development for teachers and other personnel.

In higher education, there is a $20 million earmark for the Promise Scholarship program and $15 million for the Arizona Teachers Academy. There isn’t money to expand the Promise program to undocumented students – something Hobbs asked for in her executive budget proposal.

Both chambers passed resolutions to waive the aggregate expenditure limit for the next fiscal year, allowing schools to spend the new monies put toward the education budget this session.

And though Democrats did not get the cap on enrollment in the Empowerment Scholarship Account program that they wanted, the budget includes some additional reporting requirements for the program and House leadership agreed to convene an oversight committee to issue a report on administration of the program.

Senate Minority Leader Mitzi Epstein said of the study committee, “It will have to do … This, in combination with accountability measures, might lead to a better solution in the coming months.”

The city of Phoenix begins cleanup in ‘The Zone’, a downtown Phoenix homeless encampment in Phoenix. A judge ordered the city to clean up the city’s largest homeless encampment, citing it being a ‘public nuisance.” The state’s fiscal year 2024 budget puts $40 million to shelters and services and $150 million toward the Housing Trust Fund. PHOTO BY ALEXANDRA BUXBAUM/SIPA USA

HOUSING AND HOMELESSNESS

Housing and homelessness also saw significant investments. The budget puts $40 million to shelters and services and $150 million toward the Housing Trust Fund.
The Housing Trust Fund, administered by the Department of Housing, invests in programs like a tax homeless credit for affordable housing developers, assists in improving access to federal housing funds and supplements state housing assistance programs like homeless shelters and eviction prevention.

The Mobile Home Relocation Fund also saw a $5 million deposit. Payouts available through the fund were increased when Hobbs signed a bill sponsored by Rep. Matt Gress, R-Phoenix, earlier this year.

Putting further funding toward housing comes as a court ordered the city of Phoenix to clear out “the Zone,” the state’s largest homeless encampment located just a few blocks from the Capitol. The city started clearing the area on May 10 and has made it clear in legal filings that they lack shelter space to accommodate every person pushed out of the area.

The Arizona Housing Coalition said the budget would deliver a “historic” investment to deal with housing and homelessness issues. The coalition is one of the state’s leading organizations working on housing and the current Department of Housing director, Joan Serviss, is a former director of the nonprofit organization.

Although they’re pouring money into the Housing Trust Fund, lawmakers haven’t been able to reach a compromise on other legislation seeking to address housing. A major bill sponsored by Rep. Steve Kaiser, R-Phoenix, stalled earlier this year after facing opposition from cities and towns.

TAX REBATE

The major tax package in the proposal is a tax rebate that will send money back to some parents of dependent children. The rebate will be calculated based on dependents: taxpayers can get $250 back for each child under 17 and $100 for dependents 17 and up. Rebates can only be issued for up to three dependents per taxpayer – meaning the maximum rebate per taxpayer will be $750 – and the rebate will be calculated based on tax year 2021 returns.

There’s one other detail: rebates can only be issued to taxpayers with at least $1 of tax liability in 2021, 2020 or 2019. In other words, the lowest-income Arizonans, who have no tax liability at all, won’t get money under the program.

JLBC calculated that the one-time rebate will cost $259.8 million.

The plan looks similar to a child tax rebate proposal that Hobbs floated at the beginning of the year. But Hobbs’ proposal was different in key respects: the governor’s plan was to distribute $100 per child to low-income parents. That means Hobbs’ plan likely would have given money to low-earning parents who won’t qualify for benefits under the enacted budget, but it would have cut out higher earners who will be able to get a rebate under the enacted deal.

Ultimately, the tax rebate that made it into the budget was pushed by Republicans – something that GOP lawmakers were keen on clarifying.

“I’m proud of the fact that we have a number – quite a bit – of conservative Republicans who put money into this fund so that we could get a tax rebate to help Arizona families,” said Sen. Jake Hoffman, R-Queen Creek.

Republicans also passed an amendment to prohibit the Governor’s Officer from sending letters about the tax rebate.

LOCAL PROJECTS

It’s not uncommon for lawmakers to insert some smaller projects among the big-ticket items in the state budget. Adding a modest project to help out a particular lawmaker’s district can be a way to secure a vote from a legislator who is uncertain about supporting a bill.

But this year’s budget process went further than throwing a few pet projects into the final deal: Republican lawmakers divided up surplus cash and offered a “share” to individual legislators to fund their own projects, or to combine their shares to pay for larger projects.

Republicans in the House were allocated $20 million and, in the Senate, $30 million. Democrats as a whole were allocated approximately $700 million, but the caucus’ leadership opted not to divide that up among individual members. One of the Democrats’ spending items was the $300 million transfer to the Department of Education.
The result is that the fiscal year 2024 budget is chock-full of small-dollar, hyperlocal spending projects.

Without a full accounting from lawmakers, it’s hard to determine how many projects were requested as part of individual slice-of-the-pie budgeting process – and who asked for what. But it’s clear that dozens of projects made it into the final package through individual requests.

The JLBC analysis shows more than 20 “local distribution” projects that will be paid out by the treasurer, like $15 million for the Prescott Frontier Days Rodeo and $850,000 for a transportation study in Sun City. And there are almost 100 items listed under capital spending, many of which look like targeted, local projects.

A large number of capital projects fall under ADOT, indicating that they’ll fund various kinds of road work. There’s $1.5 million for a roundabout in Payson; $8.6 million for an Interstate 19 interchange near Nogales; $10.5 million to repave part of US 60 from Morristown to Wickenburg; $250,000 for a construction study for Cave Creek Road.

Rep. David Livingston, R-Peoria, told KJZZ that he used half of his share of the money for a deep well for the city of Peoria, and the other half as a contribution to a joint project for road work on State Route 30.

Livingston said the individual allocations “played a big role” in getting the budget done and argued that it’s an efficient way of divvying up state money.

PRISONS

More than $51 million is slated to go toward prison health care and an additional $100 million will cover prison building repair and capital projects as the Arizona Department of Corrections, Rehabilitation and Reentry faces a decades long lawsuit.

In April, a federal judge ordered the department to make sweeping improvements to state prison conditions and health care system, citing an “unconstitutional substantial risk of serious harm.”

Judge Roslyn Silver said the department had three months to make major improvements across record keeping, staffing and inmate mental and physical health care. Silver also required prisons to be free of garbage, mold, mildew, filth, vermin, insects and rust.

“As a matter of common decency, an Order should not be required to prompt Defendants to repair leaking pipes, repair inoperative toilets, or collect trash,” Silver wrote.

The budget also puts $2 million toward a grant to provide transitional housing and services for formerly incarcerated people.

And in juvenile corrections, the budget provides a $250,000 backfill for courts to cover juvenile monetary sanctions. A bill to repeal juvenile monetary sanctions is making headway in the Legislature, but the only opposition comes from the courts which feared the pitfall it would create in the budget.

BORDER

The governor and lawmakers haven’t highlighted border-related spending in this year’s budget, but the package does make some significant modifications to funds that have already been designated for border projects.

The $335 million that was earmarked last year for border projects will no longer be restricted to being used for physical barriers. Former Gov. Doug Ducey already spent more than half of the cash on a short-lived container barrier that was torn down late last year following legal action from the federal government. Cost estimates for building and disassembling the container wall are generally in the realm of $200 million, meaning there’s still a significant sum of money left over.

The budget also effectively renames Ducey’s Border Strike Task Force the Local Border Support fund. Hobbs has said she would eliminate the controversial strike force, but the JLBC budget analysis indicates the change basically amounts to renaming the project, which is funded through the Department of Public Safety and gets about $12 million per year. The budget includes minor changes to funding rules for the Local Border Support fund.

INTERSTATE HIGHWAYS

On top of the small-scale infrastructure projects chosen by individual lawmakers, the budget includes significant carve-outs for major highway projects. There’s $89 million to widen the I-10 from Phoenix to Casa Grande and $76 million to expand 1-17 from Anthem to Sunset Point. The interstate funding in this year’s budget comes after the state applied last year for federal money to support the I-10 widening project, but had the proposal rejected. The entire project is expected to cost hundreds of millions of dollars, meaning this year’s appropriation won’t be enough to complete the work.

Sen. T.J. Shope, R-Coolidge, said on Twitter that he had pushed for the for I-10 funding and that the state will need about $120 million in matching funding from the federal government to finish the project.

Governor proposes $2 million to replace remote housing for state troopers

Arizona state troopers could get better housing in remote areas if the governor’s budget proposal is approved by the legislature.

Gov. Doug Ducey (Photo by Katie Campbell/Arizona Capitol Times)

Gov. Doug Ducey recommended $2 million to replace “dilapidated” remote housing units and office spaces that Department of Public Safety troopers use in far-flung, rural parts of the state.

Some of the buildings are more than 50 years old, the governor’s budget says, and new units are much more energy efficient, which costs the state less money to operate.

“Further, better living and working conditions offer more incentive for state troopers and their families to remain in or relocate to rural areas,” the budget proposal says.

DPS spokesman Kameron Lee said the remote houses help troopers keep response times low and provide coverage for the less populous areas of the state.

The houses are typically modular homes on land owned by the Arizona Department of Transportation, Lee said.

While on duty, troopers live in the remote housing full-time, Lee said. They may live alone or with a significant other or family, he said. Some travel to the area for the work week then travel back to their homes on the weekends, he said.

There are no health or safety hazards at any of the units right now, he said.

DPS has nearly 60 remote duty houses and nearly 40 area offices across the state, according to Lee. The $2 million in Ducey’s budget would replace a combination of six houses or offices if it’s received, he said.

Most of the houses were built between the 1960s and 1990s, Lee said. The department last replaced a remote duty housing unit in Gila Bend in 2010.

Housing reform bipartisan across country, can be in Arizona

By Rep. Analise Ortiz and Sen. Anna Hernandez

When knocking on doors to win our elections in Maryvale, our community relayed a resounding shared concern: housing costs have increased substantially and simply finding a home has become next to impossible.

We met a retired couple whose adult children had moved back home because they were priced out of apartments. We met seniors on fixed incomes terrified that their rent would be raised on them—again. We met a young couple struggling to find an affordable home to start their family.

Maryvale was one of the first master-planned communities in the country, making the American dream of homeownership attainable to families. Today, a community like Maryvale couldn’t be developed under restrictive zoning laws that regulate design standards, lot sizes, and garage requirements.

These burdensome zoning laws are a root cause of our housing crisis. According to the Arizona Department of Housing, Arizona has a shortage of over 270,000 homes. With 100,000 people moving here annually, we simply do not have enough places for people to live.

Zoning laws create onerous delays in the development process. This finding was emphasized last year during a months-long bipartisan Housing Supply Study Committee. The information gleaned from over 70 presenters—advocates, academics, builders, non-profits and residents —underscored that zoning reform is an important puzzle piece to solve our housing crisis.

We support Zoning Reform
We support efforts to reform zoning laws in Arizona and we strongly encourage our colleagues on both sides of the aisle to do the same. There are currently three measures before the Legislature to create more places for people to live, stabilize the market, and drive down housing costs.

HB2536 would require cities to make zoning decisions in a matter of months as opposed to years. The proposal would legalize backyard casitas and shared living facilities for seniors, who happen to be our fastest growing homeless population. The bill also would remove many of the costly design requirements that have effectively regulated starter homes out of existence in Arizona.

SB1161 would require two cities—Phoenix and Tucson—to allow any low-income housing project to be built “by right” along light rail and streetcar routes. These affordable housing projects – which we desperately need in our two largest cities – would be effectively fast-tracked through the process. The bill would also prioritize Arizona residents in the distribution of housing assistance vouchers.

SB1163 would allow for smaller lots for starter homes. It also would legalize duplexes, triplexes and manufactured housing options. These housing types, which once provided some of the most affordable options for residents, are nearly impossible to build in Arizona currently.

While these three bills may not have everything that we would like to see, we cannot afford to sit on the sidelines until we get the perfect bill. Our constituents—especially those facing eviction and housing insecurity—simply cannot wait.

Zoning has a dark history in this country
You don’t have to search far to learn about the history of zoning in this country. And while de facto racial segregation may not guide modern zoning laws any longer, it’s impossible to ignore this pretext when reviewing today’s housing crisis.

In our short time in the Legislature we have witnessed scare tactics and hyperbole as it relates to housing reform. We’ve heard comments that suggest more housing “will invite more crime,” “will cause more traffic” or “destroy the character of the neighborhood.”

Here’s our response: In a crisis, the needs of the many must outweigh the convenience of the few. Across the U.S., YIMBY groups – Yes, In My Back Yard efforts – have arisen to dampen the impact of pockets of NIMBY neighbors determined to control property they don’t own. We respect the position of those who oppose development efforts. We don’t want to harm their quality of life. But fairness and compassion dictate that we must help our constituents who have been priced out of renting or buying a home.

Reform is bipartisan
States across the country have started to push back on these sordid zoning regulations. Both Republican and Democratic Governors have loudly opposed local zoning laws. Governor Polis of Colorado called for numerous changes in his State of the State address this past January and followed up with specific proposals just last month.

Governor Gianforte of Montana echoed Polis’ sentiments, and Montana lawmakers have introduced several proposals to speed up housing development and remove antiquated barriers.

Massachusetts, Vermont, Washington, Texas, Oregon have all introduced proposals to cut through local red tape and make housing production a priority.

The three reform measures that are currently sitting at our Capitol are also bipartisan with all three bills receiving support from Republicans and Democrats in their committees.

We are at a crossroads with our housing crisis in Arizona. We can either take action to mitigate the crisis or we can continue with status quo. For us, the answer is clear. This is not a question of politics or partisanship. This is about helping human beings achieve their dreams and improve their daily lives. It’s about fairness and acting with grace. We need reform – and we need it now.

Sen. Anna Hernandez and Rep. Analise Ortiz represent Arizona Legislative District 24.

Incoming lawmakers, governor-elect aim to tackle housing

New homes are under construction at the new master-planned community Reserve at Red Rock sits in Mesa, Arizona USA on November 30, 2022. Housing affordability has fallen to its lowest level in 33 years, and mortgage and home prices have surged. (Photo by: Alexandra Buxbaum/Sipa USA)(Sipa via AP Images)

Republicans and Democrats want to address housing in the upcoming legislative session, and some of their proposals overlap.

Everyone in and around the Capitol is aware of the housing shortage regardless of political affiliation but agreeing on solutions is a tricky issue that pits state and local control against one another.

Earlier this year, the Legislature approved a Housing Supply Study Committee that has been meeting for the past several months to learn about Arizona’s lack of affordable housing.

The committee members are now preparing documents on the issue and how they want to address it.

Rep. Steve Kaiser, House, affordable housing — Rep. Steve Kaiser, R-Phoenix

Committee chair Rep. Steve Kaiser, R-Phoenix, will present the report within the next two weeks or so. He will also likely sponsor some legislation that will come out of the committee as he did last year.

Democrat Gov.-elect Katie Hobbs has a very detailed housing plan that includes several proposed bills. She is a former social worker and legislator with an interest in housing problems.

Land costs and building costs have increased, more people are moving into Arizona, inexpensive housing is decreasing, and new housing isn’t being built as quickly as it did in previous years, but lawmakers already have possible solutions on the table.

Lifting Zoning Restrictions

Jake Hinman, Arizona Multihousing Association director of government affairs, said, “Zoning has made it extraordinarily difficult to get through the process. NIMBYISM is a result of zoning.”

He accused cities like Scottsdale of being “downright hostile” toward affordable housing while other cities like Tempe are taking the issue full-on and ending up housing the workforce and low-income residents.

Perhaps the most commonly repeated theme in the Housing Supply Study Committee is the need to cut back on zoning “red tape” that discourages developers from wanting to build homes in Arizona.

“Twenty years ago, you could take a property from dirt and build a house within six months,” Senate President-elect Warren Petersen said in an economic proposal he released earlier this year. “Those days are long gone as a litany of hurdles have been placed in obtaining approvals for land development and housing. Now, it can take as long as four years! Let’s increase the housing supply by shortening this window. One way to accomplish this is through administrative approvals for all projects that meet existing laws and requirements.”

Kaiser has made repealing zoning restrictions a priority over the past several meetings of the Housing Supply Study Committee, but the question that remains to be tackled is which zoning regulations must go.

This is not necessarily a partisan issue.

Hobbs offers some specific deregulation proposals in her housing plan.

Hobbs, gubernatorial, election, Lake, debate, Clean Elections Commission, PBS, debate, Lake, Ask Me Anything, education, Chandler, election, gubernatorial, PBS, debate, interview, Lake, Mike Broomhead, gubernatorial, candidates, Ducey, border, abortion — Katie Hobbs

“Examples of zoning changes that lead to more housing inventory include: building an additional dwelling unit, an accessory unit or a single-room occupancy unit on a residential lot; allowing higher density zoning that can accommodate more development of moderate-income housing; permitting higher density residential projects in or near commercial and mixed-use zones, major transit investment corridors, or employment centers; reducing restrictive requirements for affordable housing projects, such as minimum parking spaces, minimum unit sizes, or common area requirements; and providing zoning and financial incentives to developers who dedicate a certain percentage of units to market or below market rate housing,” she wrote.

Increasing density and allowing non-traditional homes also came up several times in the Housing Supply Study Committee.

Inclusionary Zoning

Inclusionary zoning requires developers to devote a certain percentage of the units in a project to affordable housing and it’s banned in Arizona. Theile included the idea as a recommendation to the committee and was met with pushback from Spencer Kamps, vice president of legislative affairs of the Home Builders Association of Central Arizona.

Kamps argued that inclusionary housing essentially taxes the very developers who are trying to create needed housing. He asked where in the United States inclusionary housing has been able to fix a housing shortage, and his question wasn’t answered. Kaiser said he’s not convinced inclusionary housing can do enough to help Arizona.

The idea got a more positive reception from Tempe Mayor Corey Woods who said, “I do think an inclusionary zoning policy would be tremendously helpful.”

Glendale Community Services Director Jean Moreno asked whether inclusionary zoning funded by low-income tax credits could be a solution that keeps developers incentivized and affordable housing coming in.

In this Dec. 4, 2019, photo, the main entrance is seen of a new apartment building opened for a ceremony at the Native American Connections Urban Living on Fillmore affordable housing unit in Phoenix. Republicans and Democrats want to address housing in the upcoming legislative session and some of their proposals overlap. The legislature approved a Housing Supply Study Committee in the most recent session that has been meeting for several months to learn about Arizona’s lack of affordable housing. (AP Photo/Ross D. Franklin)

Tax Increment Financing

Several states use tax increment financing or TIF, which incentivizes developers. A city sets aside the area to be developed and when property taxes in the region increase, the added revenue – separate from the base revenue stream – is diverted to the developer as a subsidy.

Arizona allows some forms of TIF but bans others. This issue has come up several times in the Legislature and is usually pushed by cities and towns that would get the benefit of more control over development.

Income Discrimination

In Arizona, developments often don’t allow people who use housing vouchers to rent at their properties. Tucson tried to stop developers from discriminating on income source, and it is now the subject of an investigation.

Speaker of the House-elect Ben Toma, R-Peoria, filed a complaint against Tucson on Nov. 16 for blocking income source-based discrimination, which he says violates state law.

“The Arizona Legislature … has explicitly prohibited municipalities from wielding their fair housing codes to continually exact more regulatory burdens on rental property owners,” Toma wrote. State law does ban municipalities with large populations from adopting fair housing ordinances.

Moreno, of Glendale, said discrimination is a problem because vouchers allow mixed income housing and so many communities won’t accept the vouchers. Cities only get a limited number of vouchers and a tight budget for them. Residents must be at the “very low” income level to qualify for them.

Blocking income source discrimination would be a good move in her opinion. “This would provide an opportunity to support households that are at a very low income,” she said.

Housing Trust Fund

Several legislators, including Sen. David Livingston, R-Peoria, Sen. Lela Alston, D-Phoenix, and Kaiser have sponsored legislation to fund the Housing Trust Fund with the Arizona Department of Housing, which can be used for projects like homeless shelters. The HTF got a significant allocation in last year’s budget, but Hobbs wants to increase it even more – as does Alston. 

Last call for the count – get engaged in the 2020 Census

The 2020 Census is happening now and with the count ending in a matter of weeks, we’re encouraging every Arizonan to be part of our complete count.

We have different backgrounds and different personal priorities, but we share an appreciation for the enormous impact the 2020 Census will have on our state, our local communities and our families. Funding for K-12 and college students. Health care for aging relatives. Transportation and connectivity infrastructure. Support for Arizona’s workforce. Affordable housing and child care for those in need. Even Arizona’s recovery efforts from the Coronavirus pandemic. All of this and more will be impacted by the outcome of this year’s census.

The bottom line is every Arizonan benefits from a complete count and every Arizonan will feel the negative impacts of an undercount in the 2020 Census. This isn’t only a decennial tradition required by our Constitution, it’s a fundamental part of American democracy and our guiding tool for fair distribution of funding and equal political representation. The census matters!

Still not convinced? Consider:

$675 billion in federal funding is distributed annually to individual states based on the census.
$3,000 per person is gained (or lost) annually in Arizona based on the census response.
A 1% undercount could result in a loss of $60 million annually and $600 million over the next decade!
Local communities feel the impact too, as census data helps guide the distribution of federal funding and state-shared revenues to counties, cities and towns.

Alec Esteban Thomson (Photo by Mark Skalny)

But this is about more than money. Arizona’s political representation for the next ten years will be determined by the 2020 Census. In 2010, we gained Arizona’s ninth congressional seat and we’re positioned to gain a 10th in 2020 if we get a complete count. That means a stronger voice for Arizona in Washington.

The political impact is also local – 2020 Census data will determine the boundaries for congressional, state legislative and local political districts. It’s crucial that Arizona’s population and demographics are accurately represented in next year’s redistricting process.

Here’s the challenge: Arizona’s diverse and spread-out population traditionally poses challenges for the decennial census. Add in a global pandemic that impacts operations and outreach efforts and we face even more of a challenge.

This is OUR census and every household counted makes a difference. It is going to take every community, every family, to step up and get involved. Get engaged now. Be sure to do the census yourself and help us promote census participation through every channel you have access to and take time to talk to family, friends, colleagues and neighbors about the census and why it matters.

Some of us just need a push from a trusted voice to be counted. This is our push for you to get involved and be counted, Arizona!

Debbie Johnson is chair of the Arizona Complete Count Committee and Alec Esteban Thomson is executive director of the Arizona Complete Count Committee.

Petersen praises Hobbs for budget negotiations

Democratic Gov. Katie Hobbs took major heat from many Democrats for negotiating a state budget package with Republican legislative leaders that did not include any changes to the state’s new universal school voucher program.

But Republican Senate President Warren Petersen is heaping praise on Hobbs for the deal, saying she negotiated in good faith, kept her promises and made a rare bipartisan budget happen. And he pointed out that despite Democrats’ anger over school vouchers, “that wasn’t going to get on her desk” because majority Republicans would never vote to curtail the program.

“Kudos to her,” Petersen said about the governor’s direct negotiations with him and House Speaker Ben Toma, which unfolded with direct meetings multiple times a week over two months.

“She was reasonable,” he said.

Hobbs, Lake, election contest, court — Gov. Katie Hobbs (Photo by Gage Skidmore via Flickr)

“And she would keep her word,” Petersen said. “”Whenever she would say ‘I agree to that,’ she did it.”

The deal on the $17.8 billion state budget package for the fiscal year that begins on July 1 came much earlier than many observers expected. Hobbs is the first Democratic governor since Janet Napolitano left office for a Cabinet post in the Obama Administration in 2009, a shock for Republican lawmakers who have had 14 years of working with a GOP governor.

Petersen sat down with Capitol Media Services this past week for a wide-ranging interview as the yearly legislative session takes a virtually unprecedented one-month break called by Petersen and Toma. With the budget done and the only bills remaining needing major work before votes, they called a break in floor sessions to work on those issues.

“We literally have put everything up there that was ready,” for a vote, he said. “And now I’m not going to make people come down here if I don’t have any floor work to do.”

Happy People

He said he was the one who came up with the plan that doled out chunks of a big budget surplus to each of the 47 Republican lawmakers in the House and Senate. Minority Democrats got smaller amounts, and Hobbs also got a big chunk to control.

What that earned was individual buy-in from GOP lawmakers who for the first time had ownership of a slice of the budget, Petersen said. That’s a huge difference from the way the budget has normally been done, with Republican leaders hammering out a deal with the governor and then presenting it to rank and file GOP lawmakers as a done deal.

“It came from the difference between communism and capitalism and the way things normally go and why we always have problems,” Petersen said of his strategy.

“You normally have six people down here deciding how … all the money gets spent,” he said. “And then those six people try to convince everybody else to vote for the budget.”

Giving each lawmaker a portion of the budget — $20 million each for GOP House members, $30 million for each GOP senator – gave them control they did not have previously.

“This time when we passed the budget everyone was actually smiling and happy,” he said. “It was like literally the first time I’ve been down here where people were happy.”

Normally, he said, people are angry, having had to get “wrangled into it.”

“Everyone went in ready to vote for this budget. Why? Because I gave them all a piece of the budget. Everybody got their own piece, and they owned it,” Petersen continued.

Even many Democrats voted for the plan, although many grumbled about how it was presented to them. Petersen blamed Democratic leaders for not adopting his formula with their members and delaying giving him their budget “asks.”

Proposition 400

In this Jan. 24, 2020 file photo, early rush hour traffic rolls along I-10 in Phoenix. (AP Photo/Ross D. Franklin, File)

After the budget passed and was signed on May 12, what’s left is a series of top-tier proposals that currently don’t have consensus among Republican lawmakers, with the governor having the final word.

The biggest issue is the extension of a half-cent sales tax in Maricopa County which pays for transportation projects.

The 20-year, multi-billion-dollar tax expires in 2025 unless voters extend it. But the Legislature has to give its permission for the issue to be put on the ballot; it’s the only county that requires that step to ask voters to approve a transportation tax.

Last year, lawmakers passed the tax extension proposal but it was vetoed by then-Gov. Doug Ducey. With an even more conservative Republican caucus this session, it faces tough scrutiny.

Petersen said he and others have major problems with the proposal presented by the Maricopa Association of Governments, the entity that doles out the money for freeways, major roadways, buses and light rail and clean air programs.

And Petersen has little faith in the agency.

“MAG is completely unaccountable,” he said. “They’re very, very insulated.”

He said that, on paper, the agency led by mayors who are supposed to have some oversight.

“But not really,” he said. “These mayors are overwhelmed, busy.”

Petersen said the plan’s use of 44% of the funds for mass transit — versus new highways and road construction — is a non-starter. And he said it creates what he called a $2 billion “slush fund” that he worries would be used to extend light rail despite promises that’s not contemplated.

And then there’s the part that says air quality is a consideration in what to fund.

“If they’re just saying, we can use any measures we want, they need to define what air quality programs they want to do,” he said.

Without definitions, Petersen said MAG could potentially impose limits on gasoline-powered cars or adopt cap and trade programs or who knows what. If they want flexibility for future technologies, he said a mechanism for legislative oversight should be added.

“Believe it or not conservatives want clean air,” Petersen said, including for themselves and their children.

“But they need to define what it is,” he said. “And yeah, if it’s reasonable, we put that in.”

Petersen had just left a meeting with Hobbs when he sat for the interview in his office, and said it sounds like she may want to be directly involved in the negotiations over Proposition 400, the tax extension.

Miscellaneous Issues

Other remaining issues include a revamped proposal to ban city-imposed taxes on home rentals. Hobbs vetoed that bill earlier this session, saying there was no mechanism ensuring renters facing rising housing costs will see the money. She also opposed the $270 million appropriation to compensate cities for the lost revenue for the first 18 months of the ban, saying it came outside the budget plan.

Toma said recently that tying a signing of a rental tax ban and Proposition 400 in negotiations with the governor was a possibility. Petersen, however, said he’s not doing that.

“I don’t horse trade,” he said.

The other key battle remaining is a Republican proposal to override many city zoning laws to boost construction of lower-priced housing options.

That measure has failed once this year. And new versions pushed by Sen. Steve Kaiser, R-Phoenix, don’t yet have the votes to pass and the powerful League of Arizona Cities and Towns is strongly opposed, calling zoning a quintessentially local issue.

Petersen said he does not know if that will get enough support to pass, and if it does not, that’s OK.

“If he doesn’t have the votes, he doesn’t have the votes,” Petersen said. “It’s really that simple.”

Another handful of bills are also in the mix before lawmakers can adjourn for the year.

“We probably have at least 10 bills that are that have loose ends on them that are really important for Arizona,” he said. “And we’re looking at if we can negotiate what to do with those by June 12, and the rental tax is one of them.”

Petersen, who became Senate President in January after a decade representing Gilbert in the House and Senate, said the unusual long break in legislative action is by design.

He recalled frustration after years of coming in to work, saying the daily Pledge of Allegiance and prayer at the beginning of floor sessions and then adjourning for the day because nothing was ready for votes.

“And so I’ve just told my caucus, and they’ve appreciated this ・ that I don’t just bring people down here to pledge and pray,” he said. “We’re not taking a month off, OK. We just don’t have floor work.”

Respite centers for homeless are a critical component of the health care system

Maria Pina of Maricopa Association of Governments , left, and Tara Devlin of Community Bridges Inc. , far right, give hand warmers to Tony Cortes, who has been homeless for more than 4 years. (Photo by J.J. Santos/Cronkite News)

During the last week of January 2020, outreach workers and volunteers across the country conducted the bi-annual “point-in-time” count of the homeless population living in shelters and on the streets. This federally mandated tally will determine, in part, the funding that states receive to help combat homelessness. This effort is part of the McKinney-Vento Homeless Assistance Grants program, established and expanded during the Reagan and Bush eras. Despite nearly two decades of a Housing First philosophy, homelessness is a growing crisis that continues to overwhelm social safety nets. When the options run out and the harsh realities of life on the streets catch up, hospital emergency departments often may seem like the only place left for people experiencing homelessness to find help.

The United States has an increasingly aging homeless population, with the average age now approaching 50 years old. Compared to the housed population, these individuals are twice as likely to suffer from disabilities, and over half have at least one chronic medical condition. Food insecurity and lack of housing further complicates physical and mental health. Tragically, EDs have a revolving door of homeless patients that are too sick to be safely discharged to the streets or shelters, yet not “sick enough” to meet hospital admission criteria. Inevitably, poor living conditions prevent hope of recovery. Eventually their health worsens and necessitates hospital admission for a few nights. Upon discharge, access to doctors and social workers are limited. Navigating the system, even in good health, is daunting. Shelters decline medically complicated patients, skilled-nursing facilities have strict admission criteria and receiving housing under the Housing First model can take weeks to months, if not longer. An interim housing option is needed.

Sam Taylor walks ahead of Stefanie Smith , both of Native American Connections. The two were among workers and volunteers who tried to find people who are homeless during the annual Point-in-Time Count in Maricopa County. Volunteers and workers search washes, parks and city streets in the quest. (Photo by J.J. Santos/ Cronkite News)

Medical Respite Programs offer a promising solution to provide higher quality healthcare at a fraction of what it is currently costing taxpayers. This unique type of shelter, also known as a recuperative care center, is specifically designed to care for the homeless sick as they recover and arrange for permanent housing. According to the National Health Care for the Homeless Council, there are 75 active centers across 29 states with an average of 21 beds at each facility. A dismally small number — compared to the demand for such services.

Homeless patients who are admitted to the hospital experience medically unnecessary discharge delays that may stretch out four or more days longer than those with homes to which to return. Lack of options for patients experiencing homelessness impedes the entire hospital system, as fewer available inpatient beds, in turn, decreases availability of Emergency Department exam rooms, resulting in more crowded waiting rooms. Upon eventual release from the hospital, the patient is back to the same predicament they were in prior, and nearly six times more likely to be readmitted to the emergency department within the subsequent 30-days.

Ending up back in the hospital can result from the near impossibility of situations like trying to recover from pneumonia or undergo chemotherapy while sleeping in unsheltered conditions. Even the “lucky” few who obtain a bed in a shelter must remain vigilant to avoid having medications and belongings stolen.

Medical respite care offers an alternative to this inhumane and ineffective cycle, yet woefully underfunded and under-recognized for the benefits to individuals and society provided. A Centers for Medicare and Medicaid Services (CMS) study found that a single Respite Center saved Medicaid and Medicare nearly $5 million per year! A study out of Cook County found that in the 12-months following a stay at a respite center, individuals had 50% fewer hospital admissions.

Respite care has been modeled repeatedly since the 1980’s with overwhelmingly positive results. Consider the example of Circle the City, a 501(c)(3) nonprofit organization that has been providing respite care for the homeless in Maricopa County, Arizona, since 2012. Through private, federal and state funding, Circle the City offers integrated health care and social services at two 50-bed locations. By operating as a Federally Qualified Health Center they are able to participate in a shared savings program with two managed care organizations and to negotiate a Prospective Payment System with the state Medicaid agency, Arizona Health Care and Cost Containment System. Since 2017, they have annually been awarded a portion of the McKinney-Vento Homeless Assistance Grant distribution from the U.S. Department of Health and Human Services Health Resources and Services Administration. Most importantly, they have fostered countless community relationships with local business, hospitals to provide and advocate for this vulnerable population. Despite this, they continue to rely on private donations for most of their funding. All of this allows for the care of more than 9,000 people every year, 70% of whom leave the respite center into permanent housing – putting an end to the cycle of chronic homelessness. Circle the City and numerous other respite centers provide a solid framework to create successful systems of care for the homeless throughout the country.

Providing health care to the homeless is an issue that affects everyone. It is time that we, and our elected officials, embrace the solutions at hand. Respite Centers are a critical component of the health care system, and a vital resource in the pursuit to end homelessness. Respite programs must be expanded as a bridge to other services, like vital Housing First initiatives. They can no longer be supported by private donors alone; local and national policy makers, city and hospital officials, need to become more actively involved to promote humane and efficacious strategies to assist these highly vulnerable members of our society.

Amy Capone is a fourth year MD/MPH student at the University of Arizona College of Medicine – Phoenix studying to be an Emergency Medicine physician.

Jen Hartmark-Hill, MD, FAAFP is a Mayo Clinic trained Family Medicine physician who has served as the medical director for Street Medicine Phoenix. She is an Associate Professor in the Department of Bioethics and Medical Humanism at the University of Arizona College of Medicine-Phoenix and Chair of the Public Health Committee for the Arizona Medical Association.

Tax credit program answers need for affordable housing

Civil engineer and worker discussing issues at the housing construction site (Stock photo/Deposit Photo)

In the same way as the Covid pandemic has negatively impacted the Arizona economy and many families’ personal finances, the past year has placed even more pressure on the state’s housing market – in particular, the need to build more affordable rental housing.

Even before the pandemic, about 120,000 people were moving to Arizona each year. Such exponential growth means that our state needs to build an estimated 240,000 new rental units this decade. What would have been a major challenge under favorable pre-pandemic economic conditions has now become a behemoth task. With property owners struggling under the various eviction bans enacted to protect renters from losing their homes – and in many cases facing non-payment or reduced payment of rent for the past 10 months – the capital to build new affordable housing rental homes has become more challenging to secure.

If Arizona’s population growth continues at the same furious pace, the law of supply and demand dictates that rents will keep rising. More people and higher rents will create an even greater demand for additional affordable housing, a need the market cannot possibly hope to meet under present circumstances.

Fortunately, there’s a solution for the Catch-22 outlined above – an innovative public-private partnership idea known as the Arizona Low Income Housing Tax Credit Program. Our organization, with help from a bipartisan group of state legislators and stakeholders, nearly got this measure passed in 2020, before the pandemic cut the session short. The legislation is modeled after a federal program that originated with President Ronald Reagan in 1986 and has been expanded by presidents of both parties in the decades since. The federal version of tax credit program has supported the building of nearly 3 million units of affordable housing nationally – including 47,000 in Arizona.

State tax credit programs for low income housing have already passed in Colorado, Utah, New Mexico and 23 other states. These “booster programs” to build affordable housing have created massive momentum wherever they have been enacted. As just one example, Colorado’s state low income housing program has created about 5,000 new affordable housing units since 2015.

We will be back at the state Legislature this year with two identical bills: SB1327 sponsored by Sen. David Gowan and HB2562 sponsored by Rep, Regina Cobb. These bills mirror last year’s legislation, which passed the House with 45 of a possible 60 votes. The Arizona proposal leverages the same stringent regulatory parameters as the federal program, which issues tax credits to state and territorial governments that in turn use a competitive process to distribute the credits to developers. This can be implemented in Arizona without creating a new layer of government, given that the Arizona Department of Housing already manages this process through its Qualified Allocation Plan. Additionally, new state tax credits can be targeted toward the communities that need them most, including urban and rural areas, the homeless, military veterans and schoolteachers.

Under the present pandemic conditions, with renters and property owners feeling enormous financial pressure, and with the need to build more housing and more affordable options, the time for this practical solution is now. Statewide, we need to build about 3,000 new affordable housing units and about 4,500 new workforce housing units each year until 2030. That will not happen without some creative thinking and a motivational tool that helps grow developer interest in building rental housing at all price points and across all demographics. To the extent that developers continue to plan to build amid the pandemic, many property owners face financial challenges, given that land, labor and material costs are the same for building “affordable units” as they are for market-rate apartment homes.

A state level low income housing tax credit program would better level housing supply and demand while freeing the marketplace to do its work. The program has worked for almost 40 years now, through six presidential administrations and innumerable market ebbs and flows. Especially while Arizona finds itself still struggling with the pandemic, the tax credit program will help us help thousands of families put roofs over families’ heads and create jobs to spur our economy.

Our housing market needs solutions right now. Low income housing tax credit program is ready to go, and we know it works. Let’s hope the Legislature and Gov. Ducey agree and vote to get it done.

Courtney Gilstrap LeVinus, is president and CEO of Arizona Multihousing Association.

Transitional housing still effective as programs fade away

Trent Deweese, 20, stands at the door to his apartment provided as part of the transitional housing program of Native American Connections, a Phoenix-based nonprofit that offers behavioral health and housing support. Deweese was homeless his senior year in high school and through the program has found an electrician apprenticeship and will soon move into his own apartment. PHOTO BY LUIS ZAMBRANO/ARIZONA CAPITOL TIMES

When Trent Deweese set out to Phoenix from Tonopah, he did not expect to be sleeping under a bridge his senior year in high school.

He found himself there after a two-year relationship with his girlfriend ended and his parents were unable to help him return home.

Deweese, now 20, turned to his high school counselor who put him in touch with Native American Connections, a Phoenix-based nonprofit agency that offers behavioral-health support and housing.

Deweese said he’s moving into his own apartment at the end of February after going through the agency’s transitional housing program.

“[The program] helped me a lot, and I don’t know where I would be at if I didn’t get to Native American Connections,” he said.

Although the number of people, like Deweese, who have found themselves homeless has increased nationally, transitional housing programs such as the one that helped him are giving way to emergency shelter, even though many homeless agencies believe that transitional housing is an effective tool in combating homelessness.

The 2020 Point-in-Time count, which is a single-night count of people in shelters and on the streets, found that 7,419 people experienced homelessness in Arizona and 3,767 of those individuals were unsheltered.

Federal funding for targeted homelessness assistance has increased every year in the past decade, resulting in a more than 200% increase. However, from 2014 to 2019, people experiencing unsheltered homelessness increased by 20.5% nationally.

The shift away from transitional housing began in 2013 to a policy that incentivized housing assistance with low barriers to entry and no service participation requirements, causing the number of transitional housing beds to fall from 197,192 to 95,446, a decrease of 101,746 beds.

Native American Connections

The nonprofit opened its transitional housing program, Saguaro Ki, in August 2019, and provides 18- to 24-year olds shelter for 18 months.

Deweese was given emergency shelter through the nonprofit for six months before he was assigned a case manager.

During 2019-2020, Native American Connections housed 129 residents, and the average stay was 70 days, according to the agency’s annual report.

Ruben Soliz, youth housing program administrator at Native American Connections, said program models didn’t change drastically when the Covid pandemic hit, but it did affect residents’ efforts in finding long-term employment.

“Several of our youth have experienced some challenges finding what’s going to be permanent gainful employment, so, we’ve had a good number that are getting temp jobs that are going to be sort of high demand,” said Soliz.

The program helped Deweese land an apprenticeship to become a commercial electrician last year, but like everything else, the pandemic stalled those plans temporarily.

He currently works several temp jobs, sometimes holding two at a time. Although he hasn’t found permanent employment, he’s moving out at the end of February to his own apartment after having stayed for the full 18 months.

He said testing, personal protection equipment, and a more dedicated staff have also come as a result of the money received, which substantially helps the emergency housing program due to the higher turnover rates and number of people living there.

Housing Priorities

Margaret Kilman, senior program manager at the Corporation for Supportive Housing, a New York City-based nonprofit that focuses on advancing housing solutions to help vulnerable people nationwide, said that transitional housing is a useful tool in ending homelessness when effectively used to achieve permanent housing.

“Over the last couple of years there has been some loss of favor in the use of transitional housing as an approach, but I think if they’re done well and if they’re done with an eye toward making sure that folks are as quickly as possible achieving permanent housing, that’s OK,” said Kilman.

The shift in housing solutions now prioritizes homeless assistance based on vulnerability and severity to ensure that people who need it the most get help.

“We always want to think about balancing temporary crisis interventions and our investments in temporary crisis interventions to permanent and long-term solutions,” Kilman said.

She said supportive housing is the best intervention for people who have experienced homelessness for a long time.

Current Efforts

The Phoenix City Council has recently approved $4 million in funding from the CARES Act to Human Services Campus and Central Arizona Shelter Services or CASS. CASS will use $2.4 million for 275 beds for its campus while HSC will spend $1.6 million for expanding neighborhood clean up and hiring additional staff for the Brian Garcia Welcome Center, which provides a client-centered approach for homeless adults.

As for Native American Connections, they have been working with Save the Family, UMOM and Pivotal Public Policy on HB2480. The bill, introduced by Rep. Andres Cano, D-Tucson, would increase funding for homeless youth and families, but its effectively dead as it didn’t get a committee hearing by February 28 in its chamber of origin.

The bill proposed support for transitional housing programs and emergency shelter programs like Saguaro Ki and HomeBase.

As for Deweese, he’s grateful for all the help he received from Native American Connections.

As his time comes to a close there, his case managers reassured him he would have a place to stay and find an apartment.

“I didn’t know what I was gonna’ do after,” Deweese said. “I thought I was just gonna’ get kicked out, honestly. But I would panic and freak out and then they were telling me not to worry because they wouldn’t just let me down like that, and it was great that I had chosen the program.”

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