Arizona House Republicans have unveiled their budget proposal for the fiscal year that starts on July 1.
The more than $17 billion plan includes a pay raise for corrections officers and money for road and other infrastructure projects. What it doesn’t include, though, is buy-in from the state Senate and Gov. Katie Hobbs, who are negotiating on their own, separate plan.
The House Appropriations Committee is scheduled to start going through the budget proposal in a little more than an hour.
Rep. Matt Gress, the panel’s vice chair, joined The Show to talk about what some highlights of the proposal are for him.
Full conversation
MATT GRESS: Absolutely. Yesterday, House Republicans introduced a budget for the upcoming fiscal year. It's balanced, it prioritizes law and order, so we invest in public safety, critical infrastructure, we protect the most vulnerable, and we help working Arizona families and we do it all without raising taxes.
I think that's a really important feature of this budget. So, in total, I think it's a strong start and it also incorporates executive and Senate priorities.
MARK BRODIE: Yeah, I want to ask you about that because as has been reported, the Senate and the governor's office have been working on their own plan separate from this. Why do you have optimism that you can bring them on board to this plan as opposed to the one that they're negotiating?
GRESS: I don't necessarily think they're going to come on board to our plan just as we're not going to come on to their plan. It's going to be a compromise, a collaboration, you know, we've reached out to the Senate and to the governor's office multiple times and they have decided to go it alone, but ultimately this bill is going to require cooperation from the House and from Republicans. So we kept an eye on that and that's why we included a lot of the priorities of the Senate and the governor in the budget to begin with because we know we're headed that way.
BRODIE: What are some of those similarities? Like what did you take from what you know of the Senate and governor's office proposal, which is not final we should say, to incorporate into yours.
GRESS: So the Senate members have a number of different key asks that we are aware of, that they've shared with us. And it ranges from infrastructure, to child welfare, to education. And same with the governor's priorities. She laid them out in her executive budget back in January. So we had a blueprint on what we could draw from. And a lot of these things are critical services funding the Department of Corrections, for instance, or the Department of Child Safety, making sure that those resources are there, so that these populations are not threatened by, you know, the potential bankruptcy.
We've also fully funded our Medicaid programs. And the developmentally disabled programs fully funded all of them, based on the new case load estimates that the executive has shared with us. So I believe it's a responsible package and it's, I think it should get a lot of attention.
BRODIE: Given your experience with budgets, you, of course, were a big part of Gov. Ducey's budget office. What do you make of the fact that here we are on June 12 and the House and Senate, both led by Republicans, are not on the same page on the budget.
GRESS: You know, every budget is different and in my experience as budget director, we had issues when the House and the Senate weren't on the same page and the job of the executive was to try to bring both chambers back together. That really hasn't happened with this governor. They've been MIA in terms of their interaction with the House Republicans. But be it as it may, I mean, this budget will get done, and I think you're seeing progress both on the House side. We're moving forward and going to be voting on it this week.
The Senate is planning to introduce their budget plan on Friday and they'll go to appropriations on Monday. So I think you'll see a meeting of the minds early next week.
BRODIE: One of the big differences it seems between the Senate budget and the House budget is this idea of sort of divvying up pots of money that the Senate gets a certain amount, the House gets a certain amount, the governor gets a certain amount. Why to you, and you have been on record saying that you do not like that idea, what to you about that makes it not a good idea.
GRESS: You have to balance statewide priorities with member asks. There are big projects and we're talking about perhaps the 347, one of the five most deadliest, five most deadly highways …
BRODIE: State route 347.
GRESS: State route 347 between I-10 and the city of Maricopa, or an expansion in the West Valley of Interstate 10 to build out the infrastructure there based on the growth due in large part to TSMC and others. Basic critical services for the Department of Child Safety and Corrections. All of these things are of statewide concern, and they require all of us, the House, the Senate, and the governor, to invest in them.
But divvying up the monies and forgetting about basic government services is shortsighted, and it has resulted in shortfalls and lots of supplementals this year because of that process. So our approach is let's fund some of these big statewide initiatives, and we can also take care of member needs as they arise in terms of the whole package, so a hybrid model is what the House proposes.
BRODIE: Do you see the Senate version in some way as a modified version of what you all did a couple of years ago called the Oprah budget and not in a complimentary way, which led the state into not great financial situations?
GRESS: Well, absolutely. I mean, you took a $4 billion surplus that Governor Doocey left to Governor Hobbs and turned it into a $2 billion deficit in one year, and It relied on inflating revenues. It spent way too much, and, and we had to cut the next year. And some of those cuts, I think, were detrimental to population service. That's why I voted against the budget.
BRODIE: So would it be your expectation that at the end of the day, the version, because there has to be a budget that passes. The version that ultimately the House and Senate approved and the governor signs will be some kind of combination between what the Senate and governor are negotiating and what you are looking to approve.
GRESS: Exactly. And, and that is that is the reality of shared government where you have Republicans controlling the Legislature and the Democrats controlling the governor's office. There will be a compromise. It will likely be a hybrid model, and we just need to get it done because time is ticking.
BRODIE: How are you trying to account for all the uncertainty in terms of revenue, be it from tax collections in the state or what the state may or may not be getting from the federal government?
GRESS: And that is certainly a big topic of discussion. Hard to predict what the Congress will do, but I think that the most prudent course of action is ensuring we're not inflating our revenues beyond reasonable expectations and also keeping large cash balances. That budget two years ago had an ending cash balance of just $11 million out of an $18 billion budget.
So the budget plan that we put forward yesterday leaves an ending balance of $429 million. That's cash that we're going to need, certainly to accommodate if revenues don't come in, even on forecast of what's, what we have in our budget. But there are also other needs.
For instance, there are cost sharing provisions in the federal tax bills that the state would need to pick up. Or the tax reforms themselves, should we conform with the no tax on tips? Or, you know, additional benefits for seniors. If we conform with those, that costs money and so we need to be prepared going into the next legislative session to make those decisions in a financially responsible way.
