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Hobbs and Mayes' fight over Arizona budget deficit fix to come to head this week

Kris Mayes (right) and Gov. Katie Hobbs
Howard Fischer/Capitol Media Services
Flanked by Attorney General Kris Mayes (right), Gov. Katie Hobbs speaks at a press conference on May 16, 2023.

A multimillion-dollar disagreement between Gov. Katie Hobbs and Attorney General Kris Mayes is scheduled to come to a head on Thursday.

The Democratic officials are at odds over how the state should spend millions of dollars it obtained from pharmaceutical companies accused of perpetuating the opioid epidemic. The One Arizona Agreement outlines how the state and local governments can spend the approximately $1.14 billion obtained under the settlement.

Hobbs and Republican lawmakers want to use $75 million from the opioid settlement fund to offset the state’s budget deficit and pay for expenses within the state Department of Corrections to provide substance abuse treatment and other health care to inmates.

But Mayes said that would violate the terms of the state’s settlement with pharmaceutical companies, which lays out specific ways those funds can be spent. She told Capitol Media Services she has allocated $10 million from the fund for opioid treatment in prisons but that the larger allocation is disproportionate to the need and is a transparent effort to sweep the fund to balance the state budget.

The budget passed by the Legislature over the weekend directs Mayes to deposit the $75 million with the Arizona Department of Corrections by Thursday. If she fails to do so, the budget calls on the Arizona Department of Administration to make that deposit anyway.

Under state law, the attorney general administers the opioid settlement account, but the law also gives the Legislature the power to appropriate those funds.

A spokesman for Hobbs declined to say whether the Governor’s Office has communicated with the Attorney General’s Office in an attempt to resolve the issue and directed questions about potential litigation to the attorney general.

A spokesman for Mayes said she is currently evaluating her legal options.

Wayne Schutsky is a broadcast field correspondent covering Arizona politics on KJZZ. He has over a decade of experience as a journalist reporting on local communities in Arizona and the state Capitol.