Key Points:

• Lawmakers divided on $270 million surplus spending strategy

• House leaders have not had much to say about the budget

• Budget deal expected before June 30 deadline

House and Senate members are taking another break while budget discussions continue, but Gov. Katie Hobbs says she expects to have a deal completed in the coming weeks. 

The House adjourned until June 16 after voting on a few bills on June 4, continuing their pattern of periodic floor activity while legislative leaders negotiate the budget with Hobbs. 

The Senate also plans to return on June 16, which gives lawmakers just two weeks to get a budget to Hobbs that she’ll sign before the end of the fiscal year. 

“I think we’ll do it before the end of the fiscal year,” Hobbs told reporters during a press conference on June 5. 

Legislative leaders are close to a budget deal, but the House and Senate appear to have some differences in how to spend the approximately $270 million surplus that budget analysts have signaled is available for lawmakers.

Hobbs said her office is aligned with Senate Republicans on the surplus with some differences, but noted House Republicans are not in agreement with the Senate regarding the funds.

“It is frustrating that I put out my budget in January, made my priorities clear, and here we are seemingly playing games, and the House and Senate still not being on the same page when they’ve had all this time to get there,” Hobbs said. 

House leaders have spoken little about the budget. 

Speaker Steve Montenegro, R-Goodyear, concluded during the June 4 floor session by informing members and the public that budget conversations are still ongoing, but didn’t elaborate further than that. 

Montenegro was not available for comment after the House finished its business.

A House GOP spokesman said the House could return sooner than the June 16 if a budget is agreed to before then.

The Senate Appropriations Committee Chairman, Sen. John Kavanagh, R-Fountain Hills, confirmed to the Arizona Capitol Times that the House and Senate are divided on the budget. 

“This is the first time the House didn’t negotiate in tandem with the Senate, so I don’t know what they’re doing,” Kavanagh said. 

Kavanagh confirmed a plan reported by Axios that would divide the approximate $270 million nearly evenly between the Governor’s Office and both legislative chambers. 

The House and Senate would each receive about $90 million, while the governor gets more than $90 million. 

Budget analysts initially projected a $612 million surplus in January, but they attributed the lower estimate to ongoing federal uncertainty stemming from tariffs and tax cuts in April.

Axios reported on June 3 that the disagreement between the two chambers lies with how the Legislature would spend its share. Senate Republicans plan to take a similar approach from 2023, when both the House and Senate GOP caucuses designated a portion of funds for each of their members to spend as they saw fit. 

House Republicans don’t want to replicate 2023, where that budget was criticized for containing “pork” and personal projects for individual lawmakers. They instead want to pool their money together for larger infrastructure projects. 

Kavanagh said he’s not worried that the budget will be delayed and force a government shutdown. He said he’s confident the budget will be signed before June 30, with the Legislature adjourning sine die a day or two later. 

Chuck Coughlin, CEO of HighGround Consulting, called the 2023 budget process “a missed opportunity” for the state to address education, housing, water infrastructure and mental health care. 

“You dilute your ability to address those by a strategy which diminishes the ability of the state to address those problems by essentially handing out earmarked appropriations,” Coughlin said.

Last week, a Maricopa County Superior Court judge ruled that a $15 million appropriation to Prescott Rodeo Days in 2023 was unconstitutional. That appropriation was the result of Prescott-area lawmakers pooling the funds they were given in the 2023 budget process.