Republican state lawmakers introduced a budget proposal on Monday that would adopt massive tax cuts by slashing spending at most state agencies and cutting a handful of other programs.
GOP lawmakers proposed across-the-board cuts of about 5% to nearly all state agencies, including those with short-staffed departments charged with fighting fires and helping vulnerable residents.
Under the GOP plan, only the Department of Public Safety; Department of Corrections, Rehabilitation and Reentry; and Department of Child Safety would remain whole.
The agency cut is expected to save around $99 million, according to legislative budget analysts.
John Truett, state fire manager with the Department of Forestry and Fire Management, told KJZZ’s The Show his department doesn’t have enough money as it is to hire the people it needs as wildfire risk continues to grow in Arizona and other Southwestern states.
“We’re very short-staffed when it comes to a statewide fire department, per se,” he said. “And, you know, we could use a few more folks and a few more permanent positions to provide that coverage and that public safety throughout the state.”
Democratic Gov. Katie Hobbs' administration has also blamed staffing problems for well-documented issues at the Department of Economic Security, which administers social service programs like unemployment and food assistance.
Since adopting a new online unemployment system last year, the department has faced a wave of complaints from Arizonans who say the new system is glitchy, making it difficult to file and process claims. They’ve also complained that it is nearly impossible to contact department staff for help with those problems.
Last year, Hobbs blamed the problems on federal funding cuts that forced the department to layoff about 500 people.
“And so it's created this backlog,” Hobbs said in October. “So there is also a new system. The issues are not being caused by the new systems.”
More recently, Hobbs spokesperson also blamed those staffing cuts for a sharp decline in the number of people who receive SNAP food assistance in Arizona, saying there are fewer people to process claims as the department implements stricter federal eligibility rules passed by Congress last year.
Under the GOP plan, DES would lose nearly $10 million and the forestry department would lose about $2 million.
Rep. David Livingston (R-Peoria), who chairs the House committee that vets budget bills, dismissed concerns about how the 5% spending cut could affect those agencies.
“Well, it's good news that the governor thinks there's $100 million in efficiencies that she can cut to fund those things, so I think the governor can manage that on her own,” he said, referring to a plan Hobbs introduced this year to reduce spending and improve government efficiency.
Livingston indicated Republicans don’t plan to budge if Hobbs pushes back against the cuts after the governor halted budget negotiations last month over Republicans’ refusal to include the renewal of a key education funding measure.
“I never turn around a good negotiation, but she walked away from the table,” Livingston said. “The first governor in my tenure ever to do that. They have to live with that.”
A spokesman for the Department of Economic Security declined to comment.
“The department does not comment on pending legislation,” Brett Bezio said.
The Department of Forestry and Fire Management did not respond to requests for comment.
The agency cuts alone would actually only pay for a fraction of the amount needed to achieve tax conformity.
The rest of that money would come from a few different avenues. About $100 million would come from “government efficiencies,” something proposed by Hobbs earlier this year. She claims by streamlining state processes and implementing AI, the state can avoid redundancies and save.
Republican lawmakers hope to save an additional $76 million by eliminating solar tax credits and other incentives for solar energy and pollution control. It’s what they describe as “green new deal tax credits.”
Finally, the budget proposes cutting funding to the Arizona Commerce Authority and Tucson Rio Nuevo — an economic development organization and a Tucson tax finance district — to save another $86 million.
With all those combined savings, Arizona will be able to match state tax policy to federal cuts Republicans in Congress implemented in a spending bill last year.
Lawmakers scrambled to come to a bipartisan agreement on tax conformity with Hobbs earlier in the year, ahead of tax filing season, but she vetoed their bills. Now, the deadline for tax filing has passed and GOP lawmakers say passing conformity is crucial to ensure Arizonans won’t have to file amended returns.
“This budget delivers one of the largest tax relief packages in Arizona history, and we’re the only known state advancing the full Trump tax cuts into state law. It eliminates taxes on tips and overtime, strengthens deductions for families and seniors and ensures taxpayers will not have to refile their returns,” Senate President Warren Petersen (R-Gilbert) said in a joint statement with House Speaker Steve Montenegro (R-Goodyear).
Republicans remain at odds with Hobbs, who in January proposed a budget that only implements a portion of the federal tax cuts at the state level.
The GOP proposal spends about $800 million less than Hobbs’.
Earlier this month, Hobbs implemented a bill signing moratorium until Republicans produced a balanced budget plan to her, explaining how they plan to pay for their ideas.
Hobbs’ spokesperson Christian Slater said on Monday morning that Republicans still hadn’t shared anything. He did not say whether the bill moratorium is lifted now that the budget has been introduced.
Petersen insisted the GOP budget plan should have bipartisan appeal.
“We’re moving a budget that cuts taxes, funds core services, shrinks government, includes priorities both sides have raised and gives Arizona a responsible path to finish the session,” he said.
Missing from the GOP budget plan is anything to do with renewing Proposition 123 — a funding mechanism for public education which pulls revenue from the state land trust. Lawmakers backfilled Prop. 123 last year after choosing not to send it to the ballot for voters to renew.
Hobbs and legislative Republicans are in favor of putting Prop. 123 on the ballot and increasing the share of land trust monies to increase teacher salaries and fund other education related projects, like school infrastructure.
The budget proposal also declares that the state chooses to opt into a federal tax credit program that would fund private school scholarships.
Lawmakers sent that proposal to Hobbs in the form of a bill earlier this session, and she promptly vetoed it.
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