(UPDATED) House Democrats Get ESA Oversight Committee; Budget Passes That Chamber and Heads to the Governor’s Desk

Twenty-Four hours ago, it seemed a solid possibility that the budget Governor Hobbs would sign for FY 2024 would only receive Republican votes.

What a difference a day makes.

After a day of uproars, protests, and calls to start the budget process over, the budget for 2023/24, after a series of meetings and phone calls between legislators and the Governor is headed to the ninth floor of the Capitol Building after securing bipartisan wins in both chambers of the Arizona State Legislature.

Democratic Legislative Leaders Mitzi Epstein (Senate) and Andres Cano (House) both voted for the measure.

Representative Cano, who is leaving the legislature after obtaining a position at Harvard University, issued a series of posts, praising the parts of the budget that reflect Democratic and most centrists values.

“This budget is far from perfect. But I assure it looked radically different two weeks ago.” House Democratic Leader @AndresCanoAZ uplifts additional K12, housing and healthcare negotiated in by Democrats. He praised members who voted for key investments and those who voted no. pic.twitter.com/K3ydkLEKo6

— Arizona House Democrats (@AZHouseDems) May 10, 2023

The House will soon vote on the '24 budget. We are proud of the Democratic wins in this bipartisan budget negotiated by @MitziEpstein & I, including:

🏫 $341.9M for school facilities
🍎 $300M one-time K-12 infusion
🍏 $88.6M new ongoing K-12 funding
📚 $85M for AZ universities

— Andrés Cano (@AndresCanoAZ) May 10, 2023

We ensured our public schools were supported by negotiating:

🍎 FY2024 Aggregate Expenditure (AEL) Limit override
🆕 ESA Reporting metrics
👏 ESA House Oversight Committee
📚 Reallocation of Freedom School funding

— Andrés Cano (@AndresCanoAZ) May 10, 2023

Additionally…. this budget includes:

🚨 $10M for emergency shelter group homes for DCS kids
🏘️ $5M for Mobile Home Parks Fund deposit
🪖 $15k for veterans' burial services
🧾 $201.4M for formula increase for AHCCCS
🫄 $7.5M for OBGYN call services
🧒 $5M to expand KidsCare

— Andrés Cano (@AndresCanoAZ) May 10, 2023

Every Arizonan deserves not only a thriving economy, but an affordable economy:

🌄 $9M for nonprofit projects on tribal lands
💵 $5M for micro business loans
🌳 $6M Heritage Fund deposit
🖌️ $5M State Lake Improvement Fund deposit
🌾 $1M to State Rural Development Council

— Andrés Cano (@AndresCanoAZ) May 10, 2023

Additional tribal investments:

💵 $4M for San Carlos Apache and Tohono O'odham college remedial education
🫶 $1M Missing and Murdered Indigenous People Task Force fund
🧾 $500k for more positions on Advisory Council on Indian Health Care

— Andrés Cano (@AndresCanoAZ) May 10, 2023

Less than two weeks ago, many of today's Democratic wins were not a part of the budget.

I am thankful to our Democratic caucuses for entrusting Leader Epstein (@MitziEpstein) and I to negotiate today's framework with Governor @GovernorHobbs and the Republican Majority.

— Andrés Cano (@AndresCanoAZ) May 10, 2023

One concession that helped increased Democratic support for the budget in the House was an agreement by Cano and Speaker Ben Toma to create a committee to focus on creating an Empowerment Scholarship Account Oversight body that will have equal representation among Democratic and Republican stakeholders.

NOW House Speaker @BenToma & outgoing Dem leader @AndresCanoAZ agree to form study committee on Empowerment Scholarship Accounts, a sore spot for Dem caucus. pic.twitter.com/8JYgO3ApIg

— Brahm Resnik (@brahmresnik) May 10, 2023

Democrats also secured five million dollars to increase funding for rural fire districts.

In a statement released after the House passage, Governor Hobbs issued a statement similar to the one earlier this morning when the Senate passed the measure, relaying:

“I’m glad the House passed the bipartisan budget and I look forward to signing it into law. Not everybody got what they wanted, but I’m thankful legislative leaders were able to set aside their differences, compromise, and support a bipartisan deal that makes historic investments in affordable housing, builds roads, bridges, and public transit, expands access to health insurance for Arizona’s children and creates critical new ESA accountability measures. By working together in a constructive way, I know we can accomplish so much for the people of Arizona and grow jobs, protect our natural resources, and build a state that works for every community.”

Education organizations, while still upset that the growth of the ESA Voucher Program was not contained, also praised public school appropriations in the budget.

Emily Kirkland at the Arizona Education Association (A.E.A.) issued a statement that read:

“There’s a lot to like in this budget–and one major disappointment. We’re glad to see the repeal of inequitable results-based funding, an increase to the base school funding level, and a one-time infusion of $300 million into K-12 public schools. These investments will translate into higher educator pay, better benefits, smaller class sizes, and other improvements, helping us keep highly qualified educators in Arizona’s schools. We’re also happy to see a long-delayed and much-needed $340 million investment in school facilities. Finally, it’s great that the legislature has preemptively waived the school funding cap (also known as the Aggregate Expenditure Limit or AEL) for next year, avoiding a completely unnecessary political fight over whether school districts can spend the money they’ve already been appropriated.

At the same time, it’s extremely frustrating that this budget does not address the growth of the state’s out-of-control voucher program. The extremist majority in our state legislature has ignored the will of Arizona voters and pushed through policies that bankroll private schools for the wealthy at the cost of the public schools attended by 90% of Arizona kids. Vouchers will cost the state more than $600 million this year alone. This unchecked spending is completely irresponsible and is on track to bankrupt our state. The fight to repeal vouchers during next year’s legislative session starts today.”

Rebecca Gau from Stand for Children Arizona also released a statement that offered:

“With a nearly $2.5 billion surplus, the new budget takes significant steps forward to support our schools and communities. These include:
A one-year waiver of the Aggregate Expenditure Limit (AEL) for FY 24, providing stability and certainty for schools by granting access to over $1 billion in promised funding.
Elimination of administrative fees imposed on children in juvenile court, allowing them to learn from their mistakes and move on.
Free dual credit classes for low-income students, leveling the playing field for access to college credits while in high school.
A one-time refundable child tax credit to support working families.
An additional $300 million for schools to address inflation adjustments.

Our team at Stand for Children Arizona has been tirelessly working alongside policymakers to make these positive changes a reality. We believe that every child, especially those furthest from opportunity and justice, deserves effective and fair education in our state.

Although we celebrate these achievements, there is still work to be done. We share the concerns of others in the education community about the absence of a cap on ESA vouchers and the need for a permanent solution to the AEL. We will continue to advocate for these issues in the coming session.

For now, let’s take a moment to acknowledge the hard work of Governor Hobbs and the legislature in negotiating a budget that includes significant wins for our children. It’s time to celebrate the progress we’ve made together!”

There is a lot to like in this budget.

Many people who did not have hope, especially a lot of poor children lacking health care, now have that.

K-12 schools will see infusions of cash, including for facilities.

There will not be a tug-of-war to waive the Aggregate Expenditure Limit next year.

More homeowners will receive assistance.

Infrastructure projects in addition to those granted by the Bipartisan Infrastructure Law will be completed.

So there is a lot to like about what passed on a bipartisan vote today in the Arizona State Legislature.

Unfortunately, there are also items to be very concerned about.

The Secretary of State and Attorney Generals’ offices did not receive the increases they were requesting. This could compromise the personal safety of the officeholders and their missions to conduct smooth and safe elections as well as go after financial predators and drug dealers.

There is also, based on the uproar from Democratic legislators,  how Democrats from the Governor and the Legislature organized their strategy, goals, negotiating teams, and talking points for the budget negotiations.

There appears to be a learning curve at work here.

Hopefully, the experience will be the best teacher moving forward.

Finally, while accountability measures on ESA’s were achieved, there is still a potential fiscal crisis coming down the road if the growth of these scholarships is not checked.

Senator Epstein and Representative Cano were right to call this “the Republican’s Alt-Schools ESA voucher program.”

The continued growth of these ESAs is potentially a fiscal ticking time bomb that can bankrupt this state if sane minds on both sides do not come to their senses and take common-sense steps now to stem the likely coming crisis.

Stay tuned for this fight at this time next year.