Arizona Leaders React to the Recently Passed Arizona State Budget

The reaction to the recently passed Arizona State Budget has been, to put it charitably mixed, with some Democrats saying the measure did not protect programs designed to help the most vulnerable and expand the Middle Class. Extreme MAGA Republicans faulted the budget for not going far enough in spending cuts.

The Fiscal Year (FY) 2025 budget includes the following cuts that should be puzzling to people who want to move the state forward, expand the middle class, and lift people up.

• Canceling a $333 million deposit to fund water infrastructure projects.
• Millions of dollars toward highway projects.
• Cuts to the Arizona Promise Program that provides scholarships to low-income students.
• Close to $22 million in cuts combined to ASU, U of A, and NAU.
• $54 million in cuts to Community Colleges along with many school-to-work apprenticeship programs that community colleges house and support.
• $30 million to help schools that serve impoverished children.

How are these cuts helpful to Arizonans and the Grand Canyon State in the long run? Newsflash: They are not. What did survive?

The two Ducey-Republican era fiscal measures that created the budget deficits in the first place: The Ducey-Republican Era Flat Tax for the state’s plutocratic one percent and the Empowerment Scholarship Private School Voucher Accounts that also mainly give welfare to Arizona’s richest and most radicalized on the right.

The only nuggets Republicans conceded to on vouchers were a $2.5 million cut to families double dipping on scholarship dollars during the summer and some new fingerprint rules for private school staff.

Not exactly the big cuts and reforms that were necessary for that program, especially given the revelation that 79 families in the ESA program were allowed to keep $175 million in unspent scholarship funds with no accountability.

In a press release, Arizona Governor Katie Hobbs put the best possible positive spin she could on the legislation, noting that the provisions included:

• Delivers resources for the Department of Health Services to protect vulnerable Arizonans, hold bad actors accountable, and enforce new standards created under the bipartisan Long Term Care reform bill.
• Does not cut basic state aid to public schools despite a $1.8 billion deficit.
• Provides 1.5 million meals to working-class children in school with $3.8 million to the Healthy School Meals program.
• Secures $12 million to expand access to quality, affordable childcare for Arizona workers.
• Includes an Aggregate Expenditure Limit extension to give public schools the budget certainty they need.
• Caps STO spending and includes new standards for schools receiving ESAs to keep students safe.
• Protects the historic FY24 $150 million Housing Trust Fund deposit and commits $15 million more to build housing that’s affordable for working-class Arizonans.
• Funds Governor Hobbs’ SAFE (Stopping Arizona’s Fentanyl Epidemic) Initiative, including:
  $1 million to DHS to distribute and equip first responders with lifesaving overdose reversal medication
  $3 million to DEMA to fund the Counter Drug Task Force to assist local law enforcement efforts with fentanyl interdiction
  $1 million additional ongoing and a $4 million one-time deposit to DPS for the Local Border Support line item to support border communities fighting drug trafficking.

Arizona Attorney General Kris Mayes, incensed that the fiscal plan included a raid of the federal opioid settlement to fund the Department of Corrections, issued a statement following the budget passage that conveyed:

“I am extremely disappointed our Democratic Governor, along with GOP leadership at our State Legislature, would put our $1.14 billion, 18-year opioid One Arizona Agreement at risk by attempting to sweep opioid funds to backfill budget deficits caused by GOP policies. Though I repeatedly warned them this is an unlawful use of these funds, they proceeded with moving forward anyway. I am beyond thankful to the legislators who spoke up on this issue and who understand the dire need to use these funds in the manner and intent they are meant to be used for. I have stated publicly and very clearly that I refuse to release these funds in this way as it would violate the agreement, and I stand by those words today. This is an egregious grab. I will do everything in my power to protect these opioid settlement funds for all Arizonans.”

“Let’s start off by remembering how we got here. A number of pharmaceutical companies grossly misrepresented the dangers and addictiveness of their drugs – opioids – to blatantly enrich themselves. They created marketing ploys, pushed prescriptions, and caused death and chaos. This terrible scandal has killed more than a million Americans since the epidemic started. Mothers, fathers, daughters, sons, colleagues, and friends. Communities and families ripped apart, hearts crushed, a public health crisis that has wreaked havoc in every corner of every state across our country – including Arizona, which is now in the bullseye of our fentanyl crisis.”

“Nearly all of us know someone who has died, someone who has become addicted, someone who has had an overdose from these lethal drugs over the course of this many-year public health crisis. Arizona has seen more than 11,500 opioid overdose deaths since 2017, more than 26,000 non-fatal opioid overdose events since 2017, and more than 98,000 emergency room visits for suspected drug overdose since 2020.”

“The One Arizona Agreement was created to effectively distribute $1.14 billion in opioid settlement funds over 18 years. The state, counties, cities, and towns reached this agreement to disburse funds based on population and severity of harm, with the State receiving 44% of the total – $502 million, and the counties set to receive 56%, or $639 million, to distribute to cities and towns within the region. As the legal and fiduciary steward responsible for these funds, it is my duty to ensure they are legally spent, that the process is transparent, and that these funds are spent according to the agreement – focusing on prevention, education, and treatment within our communities.”

“There has been national scrutiny and attention on how these monies are being spent, with many comparisons being drawn to big tobacco settlements of our past. If there is one thing I can applaud my predecessor on, it is the fact that our opioid settlement agreements were crafted thoughtfully to include clear guidelines for disbursement and transparency. Having traveled across our state holding listening sessions on our fentanyl crisis, I know there is a dire need for resources in every community, with different needs across these communities.”

“I look forward to the day when we can put politics and power plays aside to better protect public health, get these funds out into the communities who so desperately need them, and save Arizona lives. Until then, I will continue to do what I was elected to do – be the lawyer for the people of our great state and protect these opioid settlement funds that too many people lost their lives for.”

Arizona Secretary of State Adrian Fontes posted on social media:

The FY2025 budget allocates the full $8 million we need for election costs, ensuring safe, fair, and secure elections in Arizona. Plus, we’re partnering with @azcjc to fund the Address Confidentiality Program for victims’ protection, with no impact on the general fund.

— Arizona Secretary of State (@AZSecretary) June 16, 2024

Later the Secretary commented:

“It’s not just good-will, but good work that accomplishes a budget of this kind. There was a lot of rolling up our sleeves, setting aside politics, and working together to understand what was at stake, so the legislature could set priorities and make decisions. The outcomes are never perfect, but I am proud of what we achieved. That is how democracy works.”

Arizona House Democratic Leader Lupe Conteras issued a statement that relayed:

“Our House Democrats stood strong against extremist measures to divide our state, encourage racial profiling, target LGBTQ youth, and make it more difficult to vote. In addition to standing up to MAGA extremism, our caucus made history when we took the lead to overcome a Republican blockade and repeal Arizona’s draconian 1864 total abortion ban before it could end reproductive freedom completely in our state. Arizona wanted that vote, we delivered, and it will save lives.

On the state budget, we recognize that the Republican majority and our former Republican governor have put our state in an extremely difficult deficit situation because of irresponsible tax cuts for the wealthiest Arizonans and a ballooning ESA voucher giveaway to those same families. Whether they were a yes or a no vote on the state budget, I respect the work each of our members put in for their constituents and their districts to move our state forward as best we can. I’m damn proud of each and every one of them and the way they fight for their constituents. I’m also proud that our caucus provided key votes to pass a bi-partisan waiver of the Aggregate Expenditure Limit, an archaic funding cap set in 1980, which will allow schools to access all of the funding appropriated in the budget and avoid layoffs and catastrophic mid-year budget cuts in 2025.”

Beth Lewis and Tyler Kowch issued a joint statement for Save Our Schools Arizona that read:

“Today is a sad day for Arizona students, parents, and educators. The budget passed last night keeps Arizona’s schools funded at 49th in the US, robbing our students of educational opportunities in service of an irresponsible and unpopular voucher scheme.”

“Because Republican lawmakers refused to rein in the runaway ESA voucher program — which drove fully half of the budget deficit — no new dollars were allocated to public schools, leaving Arizona’s public schools far behind our neighbors and states across the country. Now, there is zero funding for schools to hire more teachers, offer teacher pay raises, or provide the classroom resources our students desperately need.”

“Failing to touch Gov. Ducey’s unaccountable ESA voucher giveaway is an incredibly irresponsible use of taxpayer funds. Refusing to limit the voucher funding that is being used as a coupon for the rich is a slap in the face to every one of the 90% of Arizona families who choose and rely on their local neighborhood schools. Despite some minor reforms, Arizona’s voucher program remains the most expansive and least accountable in the entire US.”

“This budget makes the path forward abundantly clear: No progress can be made for Arizona public schools until the balance of power is shifted at the legislature. To this end, Save Our Schools Arizona is committed to knocking on hundreds of thousands of doors by November 5 to flip the legislature to one that will protect and prioritize our public schools.”

Arizona State Senator Priya Sundareshan posted:

Thank you so much @PimaRex – we kept fighting as long as we could to make the budget better for southern AZ and the whole state. https://t.co/2LZTBxgk3X

— AZ Sen. Priya Sundareshan (@priya4az) June 16, 2024

Arizona State Representative Nancy Gutierrez responded to Blog for Arizona’s request for comment, offering:

“While I am pleased that we were able to secure funding that will allow all students who qualify for reduced-price lunch to receive lunch with no cost, I am very disappointed that public education money was cut. So, once again, we are funding out-of-control spending for rich families to pay for private school tuition, and we are doing this at the detriment of our most underserved public school communities. That is why I voted no, again this year, on our state’s budget.”

In remarks to AZ Mirror, State Representative Mariana Sandoval said:

“Our budget is a moral document. I’m sad to see that in the $16 billion budget, our communities are getting crumbs. Those are the wins my colleagues are talking about, crumbs.”

Arizona State Representative Patty Contreras wrote:

Saturday, June 15th, was a long day of budget bill consideration and negotiation. At the end of the night, no one got everything they wanted. I held my nose and voted Yes on the budget. Here are a few items I wish had been included in the budget but were not. 

• The budget didn’t include any rollbacks to the out-of-control ESA voucher program. 
• It didn’t fund the public school opportunity weight or additional funding past this next fiscal cycle. 
• It didn’t adequately fund the Area Agency on Aging to provide services throughout the state for our growing elderly population. 
• It didn’t provide funding for low-income housing tax credits, which would have allowed developers to build low-income housing throughout the state.  

Why, then, you ask, did I vote for the budget? We are in a very divided government, which makes it difficult to negotiate for dramatic reforms and provide for programs we, as Democrats, find essential. No budget will be perfect, and there will be winners and losers. I don’t consider it a perfect budget, but I voted for it because there were some good items in it that I did not want to lose for our community.

For instance, I understood from the Governor’s office that Speaker Toma was implacable in his stance on the ESA voucher program. He would not negotiate to reduce this at all. However, some minor reforms on ESA were accomplished, including auditing purchases, having a public database of allowable expenses, a fingerprinting requirement, and eliminating the summer school loophole. I agree that these minor reforms are peanuts compared to the nearly $1 billion ESA expense, but pressing the Speaker was not going to get us anymore. Their line was drawn.

This year’s budget protected the opportunity weight and additional funding formulas for public schools, and there is legislative intent for it to be considered again in FY 2028. However, if Democrats achieve a majority in one or both chambers in November, we can fix this and include it in next year’s budget.

While public education funding did not increase, it did not get cut. This is a win, considering the legislature must cut nearly half a billion dollars from the budget. However, we were able to fund school meals for low-income families. The FY 2025 budget provides $3.8 million for approximately 1.5 million free student meals. Also, any previously approved school facility projects were funded at $200 million.

I advocated for the continuation of funding for the Arizona Commission on the Arts ($2 million), the Area Agency on Aging ($2 million), and the Arizona Trail ($200,000). These were funded below what we had requested, but at least some funding was provided in this year’s budget.

Wins that I can be proud of supporting in the budget include but are not limited to:

• Childcare – $12 million
• STO reform – cap the program at $130 million.
• Department of Health Services – 12 FTEs for Licensing to increase workforce capacity at DHS for licensing, inspections, complaints, and enforcement in hospitals, nursing homes, and other health facilities.
• Housing Trust Fund: Protecting the one-time $150 million funding in the FY2024 budget and adding $15 million in FY2025.
• Homeless Shelter and Services Fund – protecting the one-time $60 million funding in the FY2024 budget.
• Department of Child Services – prevented harmful cuts to services and supports for children.
  • Funded Healthy Families Program expansion ($12.5 million)
  • Funded Children and Family Support services ($5.5 million)
  • Funded permanent guardianship caseload increase ($5.4 million)
• Department of Economic Security – prevented harmful cuts to developmental disability services.
• Funded Childcare assistance ($12 million one-time GF and $131 million federal Expenditure Authority for Child Care and Development Fund)
• Water – Cut $333 million from the Water Infrastructure Finance Authority (WIFA) fund. This originally was a $1 Billion/3-year budget item, which I always thought was a boondoggle. It was fitting to have this cut from the budget.

Some people will criticize me for not voting No on this budget. I understand their consternation. I voted Yes so that we can move forward from this year. Trying to lean on the Majority leadership, which was the stance of some of my colleagues, could have hurt the wins we did achieve. However, leaning on the Majority could have allowed the Freedom Caucus more time to press on their leadership to make more drastic cuts. We had no guarantee that if we pressed more, we would gain more. The opposite was also true. If we pressed more, we could have lost what we had already won. I’m not a gambling person. I take my money when I’m ahead. 

This budget is done. Let’s move forward and work towards winning the majority this November to make substantial and lasting changes next year and in the years to come to help all Arizonans.

Personally, I think the state budget that the legislature passed sucks.

I think Governor Hobbs and some Democrats in the State Legislature, while securing some vital services for the state’s residents like feeding hungry children, child care, and funding the elections process, failed in not drawing a line in the sand on both of the main drivers of the fiscal deficit: the flat tax and the expansion of the Republican welfare program for the rich: the ESA Scholarship Program.

It appears that they should have fought more for the people’s priorities.

Today is June 17, 2024. There are 13 days left in the fiscal year. They could have and should have taken a stand,

They also did not permanently fix the Aggregate Expenditure Limit for public schools. They just did another band-aid waiver for the new year so the whole process has to play out again when it should have been solved.

Representative Sandoval is right. The Democrats got crumbs and the long-term fiscal shape of future Arizona budgets, with the flat tax and voucher programs virtually untouched, is in peril.

As I wrote in previous articles over the weekend, how can anyone vote for this budget that cuts programs that benefit seniors and poor children while allowing the state’s wealthiest one percent to hoard $175 million untouched in their E.S.A. accounts with no accountability?

That said, I was not in the room when these discussions and negotiations, some of them behind closed doors, occurred. I did not see how the Governor, her team, and the other Democrats fought for the people’s priorities. They undoubtedly did and Republicans, like Representative Contreras said, were just plain obstinate and immovable. Maybe this is the best budget deal that could have been achieved given the circumstances of the moment.

Still, it would have been interesting to see what would have happened had Governor Hobbs and the Democrats told Speaker Toma and the other Republicans, many of whom created this fiscal mess during the Ducey years, that the budget was lacking and they were not going to help with the state’s fiscal blueprint until their priorities were properly addressed.

There was still time to try that approach.

They should have tried.

In the fight for control of the State Legislature this November, it would be easier to campaign against Republican extremism on vouchers and the flat tax if they had.