The state Senate has unveiled its budget proposal for the fiscal year that starts in less than two weeks.
The $17.6 billion plan would spend roughly $300 million more than the House budget package. That chamber approved its plan last week, although Governor Hobbs has said she would not sign it. The Senate version was negotiated with the governor’s office.
The chamber’s Appropriations Committee is scheduled to take up the package of bills Tuesday. GOP leaders say the plan is to vote on them in the full Senate tomorrow and then send them to the House.
The Show's Mark Brodie spoke with Sen. John Kavanagh, Republican chair of the Appropriations Committee, and House Minority Leader Rep. Oscar De Los Santos, a Democrat.
Sen. John Kavanagh: Key Republican negotiator is confident Senate proposal will pass
JOHN KAVANAGH: Well, the fact that it was completed is always a highlight. I/t, it can drag on forever and since we started so late in the process, it's amazing that it appears that we will be making the June 30, the government shuts down, which asterisk, not really, in time.
BRODIE: To what do you attribute the fact that you started so late?
KAVANAGH: Well, the governor did not want to negotiate. Until we had referred Prop. 123, which is the continued, increased amount of money from the state land trust to education. She did not want to do any negotiations until we took care of that, and we had a great deal of problems with our stakeholders getting the language down.
So in the end, we both realized that it probably won't happen this year, which is not a problem because we could do it next year and it will not interrupt the flow of the money to these schools.
BRODIE: Yeah, you backfilled the, the, the amount of money from the general fund for schools for this year. So one of your Senate colleagues referred to the House budget as a quote fantasy land budget. Do you agree with that assessment?
KAVANAGH: Well, I, I'll be kinder. I'll just simply say it's, it's not realistic since hell will freeze over before the governor signs it because of certain, what I would call, provisions that are toxic to Democrats.
BRODIE: And your proposal spends roughly, I think, $300 million or so more than the House version. Is that a tough sell for your fellow Republicans?
KAVANAGH: Not when it's a $17.6 billion dollar budget, that that becomes something of a rounding error. And in addition to charges that we are, you know, massively overspending, which are, which is ridiculous because we, we.
BRODIE: You don't have that much money to spend this year.
KAVANAGH: Almost the entire budget is the baseline, which is the continuing ongoing programs that we always do. You know, we're only really adding about a half-billion dollars, so it's, it's not that much more. And we, counter to accusations by some House members that, you know, this is not a conservative budget by the fact that they are extending a hospital tax of $100 million for an additional year. So, you know, I, I see your “I'm not conservative,” and, you know, double down on you.
BRODIE: So I want to ask about the fact that as you say there's a lot of sort of baseline spending in here. Is there any additional spending that was particularly contentious or that one side or the other was very much we must have this, we must not have this?
KAVANAGH: There were items that were contentious, but early on we both agreed that we would not put in things that will, you know, throw off our, our members. So, I mean we're not funding internal illegal immigration enforcement, and the Democrats will not be funding drive through abortion clinics.
BRODIE: Was that a tough thing to come to the fact that you were kind of have to, everybody was gonna have to kind of give a bit?
KAVANAGH: No, I mean, we, we realize that and again the, the, we negotiate with input from our members. We find out from the Republican caucus, you know, what they want, what are their limits, and, and we have a pretty good feel of that.
But then it's, it's only about four or five of us, from each chamber, and, and the governor's office that go into a room called the cage, right? And we slowly negotiate the budget and again we, we realized we were late.
I started off the negotiations with the, with the governor's office by saying on this first round we're gonna make a lot of concessions, and we expect you to do the same thing. And when they came back the next day they did in fact make a lot of concessions, so it went much more quickly.
BROIDE: How much wiggle room did you feel like you needed to leave yourselves based on economic uncertainties, fiscal uncertainties maybe coming from for the rest of this fiscal year?
KAVANAGH: This is government. There’s built-in wiggle room. You can always go to some funds and shake it hard and more money drops out. So you know, and we have a $1.6 billion dollar rainy day fund. However, we only will touch that if we have decreased revenues.
We, only once in my 19 years did we, was that tapped against my wishes for increased spending that was at the end of Gov. [Janet] Napolitano's turn a year before the Great Recession hit and the next year, not only did all of that spending go away, but we had less money in the rainy day fund to buffer the big fall that hit us for the next two to three years.
BRODIE: Let me ask you a bit about higher education because I, I understand that was one of the differences between the House version and your version where the House would have capped tuition and basically frozen it for a few years without funding the universities any more. The Senate version does not do that. Why did you make that decision?
KAVANAGH: The governor. We were fine with that, but the governor said no way, you know, that's, that's one of the sacred cows that we're not butchering, this budget.
BRODIE: How close do you think you are to having the final product? I mean, there's always going to be amendments on the floor, but I mean, are you expecting those to be fairly noncontroversial, keeping everybody on board?
KAVANAGH: The only thing that we're adding to the budget in the Senate are some Republican member asks who will be coming on the bill And in fact we, we've gotten some back channel communications that when the Senate budget goes over to the House, we'll be putting a few more of the Republican member asks on. And there'll be the votes there to pass. The, the, the governor, of course, has handled some asks for Democrat members.
I would expect that, some of the more, conservative members in the House, the so-called Freedom Caucus, they will probably be putting on some very controversial amendments, you know, which they ideologically support, but which are non-starters and if they ever got in the budget, the governor would veto it.
BRODIE: Well, so given that you're going to add some additional Republican member asks, how do you make sure that that keeps Democrats in the Legislature and the governor on board?
KAVANAGH: Almost all these asks are local projects and, and state road projects in districts. It's mostly construction stuff, you know, things related to water, not super controversial.
No, we're, we're not, you know, you know, hiring an army of state ICE enforcers, you know, much as I would like that.
BRODIE: So it sounds like you are fairly optimistic that this budget will pass in the not too distant future.
KAVANAGH: It will. It's just a matter of how difficult will the labor be.
BRODIE: How difficult do you think the labor will be?
KAVANAGH: It, it depends on, you know, what, what, what kind of amendments are put on and whether or not they're just put on as a matter of, we want to show we're doing something. As opposed to you know, trying to make the budget toxic and harming members that don't go along with the, and the Democrats may do the same thing, they may try to put some very extreme amendments on, you know, which then forces members to go on the record as, you know, opposing whatever they put on.
You know, which is difficult for, you know, conservatives because they know if it goes on the budget is dead, so it can't go on, you know, and there are some members who will never vote for the budget and they just put this on and they go back and they say, look how, you know, pure I am ideologically, but you know, there's a scale of idealism versus practicality in the budget.
And you know, you, you've got to be practical. You, you can't let the, the good get trampled because you're waiting for the, you know, the excellent, so but some people just always stay on, on that idealism. They never vote for the budget. These people who never get bills passed, you know, they, they, they are very popular with the party bases, but they're just not effective legislators.
Rep. Oscar De Los Santos: If House GOP wants to 'govern like adults,' they'll join negotiations
OSCAR DE LOS SANTOS: Well, the House Republican budget is a complete and total sham and a joke. Everybody knows it. The Senate Republican colleagues know it, the governor knows it, we know it, and so what we're focused on is the actual real bipartisan budget. And we're not gonna dignify their joke of a budget with a serious response, and so we were not, not gonna give it any air there.
BRODIE: So when you talk about the real budget, I assume you're referring to the version in the Senate that has been working with the governor.
DE LOS SANTOS: That's correct.
BRODIE: So what about that budget gives you hope that House Democratic priorities will be included?
DE LOS SANTOS: Well, it's very simple. It's the fact that we have been at that table crafting that budget from the get-go. We're confident there's going to be a strong bipartisan budget that has very good Democratic priorities in it.
I think I'm feeling good that we're going to be investing in public education and public health care. We're gonna be making investments that bring down child care costs for hardworking families here in Arizona and I think we're gonna, we're gonna be making investments that, in public safety and workforce development, in higher education.
And so I'm excited for the public to see it because it really is the product of a bipartisan process and frankly it is a model for shared government. The electorate, the people of the state of Arizona gave us a bipartisan government and we are delivering a bipartisan budget.
BRODIE: Have House Democrats been involved in the writing of this plan?
DE LOS SANTOS: We have been intensely involved in the writing of this plan, absolutely.
BRODIE: In addition, I would assume, to Senate Democrats and the governor. So is it everybody but House Republicans that have been involved in this?
DE LOS SANTOS: Yeah, inexplicably, House Republicans have chosen to go it alone and be on their own island, and it's very strange and you even saw their colleagues in the Senate call their budget a quote fantasy land, and the chairman of the Senate Republican Appropriations Committee was absolutely shocked.
He said for, that for the first time in 20 years, House Republicans are not at the table. It, it was a bizarre and stunning choice from the House Republicans to be completely MIA from this process.
BRODIE: When it comes to the actual numbers and the actual policy in it, how different are the House and Senate versions?
DE LOS SANTOS: Well, you know, I think there are significant differences, you know, the House Republican budget failed to prioritize investments in public education. That is something that we're going to be championing. They also cut more than $200 million from access to state Medicaid program that would have kicked off thousands of hardworking vulnerable Arizonans off of their health care. That's completely unacceptable for the House Democratic Caucus, and you are not going to see that in the bipartisan budget.
BRODIE: How about some of the policy proposals? I mean, we, we heard some in the House version that some of the Senate Republicans at least seem open to considering in their version that I would imagine House and Senate Democrats would maybe not be all that thrilled by.
DE LOS SANTOS: Well, you know, we're working through those differences. Obviously this is a, a bipartisan budget. Not everyone is going to get what they want. Everyone's going to be a little bit unhappy that is sort of the nature of a deal and, but, but there we don't think there's going to be anything in there that is going to be a total poison pill.
BRODIE: So you're not worried about potential policy getting in there that would throw Democratic members off the budget?
DE LOS SANTOS: We're working around the clock to make sure that's not the case.
BRODIE: So given that Senate Republicans and Democrats are working with the governor, assuming that the Senate is able to pass this plan that Democrats stay on board with, what is your level of optimism the House will get on board with that?
DE LOS SANTOS: Well, I think there's going to be a lot of things that House Republicans are going to be able to get on board with. It's a bipartisan budget, obviously negotiated with their Republican counterparts in the Senate, so there will be, you know, a good number of Republican priorities, and I think that House Republicans are going to see the writing on the wall that this is the real budget and if they want to have an influence in how the taxpayer dollars are spent, they should have, they should be playing with us here and negotiating.
BRODIE: Does it concern you at all some of the criticism that has been out there about the sort of the the 90-90-90, what's been called, you know, the Senate, House, and governor each get a pot of money to do with what they want and sort of thoughts back to a couple of years ago when many most legislators got a certain amount of money to do with what they wanted and, you know, especially some of the House Republicans are being critical of of that idea. Does that bother you at all?
Well, I want to be clear that the budget we are negotiating funds broad, big and important statewide priorities and certainly the things that Democrats have been fighting for are not, you know, in-district pet projects or pork as it's often called, but these are big investments in making sure that child care is more affordable, that our schools are funded, making sure that we're providing good health care to Arizonans, that we are providing pathways to higher education and the workforce and so, you know, I, I just don't think those kinds of concerns can be raised about the things that Democrats are fighting for.
BRODIE: Anything that you would really like to have in there that at least so far is not?
DE LOS SANTOS: Well, you know, I think that I think one big thing that we've fought tooth and nail for are reforms to the ESA program. That program has completely ballooned to a billion dollars. It's unaccountable. It is riddled with waste, with fraud and abuse, and, you know, we're fighting hard to try to rein it in, but the truth is that's a red line with the Republicans.
BRODIE: So I know that Senate leadership, Republican leadership has been talking about voting this out by the middle of this week and then sending it to the House. Is that your expectation as well that the Senate version should be done within a couple of days?
DE LOS SANTOS: Yeah, that sounds about right.
BRODIE: And what, like what do you think happens then? I, we kind of alluded to it, but like what do you think happens next?
DE LOS SANTOS: Well, you know, it'll come to the house and we're gonna have to have a serious conversation with House Republicans about whether they want to proceed with a quote fantasy land budget, which is what their Senate Republican colleagues talked about, or whether they want to govern like adults.
That's the choice that they're going to be faced with, and we invite them to join Senate Republicans, House Democrats, Senate Democrats and the governor's office on delivering a real bipartisan budget that serves the people of the state of Arizona.
