'As good as it gets': Inside the Arizona Legislature's 35-hour dash to balance the budget

Arizona lawmakers late Saturday approved a $16.1 billion state budget on a bipartisan vote that alternated between disgust and grudging acceptance.

They then called it quits for the 2024 legislative session.

The budget erases a $1.4 billion deficit. The vote came four days after the draft budget negotiated by Democratic Gov. Katie Hobbs, Senate President Warren Petersen, R-Gilbert, and House Speaker Ben Toma, R-Glendale, was aired. That fueled complaints from many lawmakers that they had been kept in the dark, then pressured to quickly fall in line.

But where critics found fertile ground to complain about the process and the spending plan's failings, those who supported it said they found merit in its provisions. Those ranged from protecting the state's universal school voucher program to applause for last-minute additions that brought on Democratic support.

In a statement, Hobbs thanked lawmakers for work on a balanced budget that was a compromise with partisan priorities and eliminated the budget deficit:

"Despite that deficit, we made important investments in delivering childcare to working families, combatting the fentanyl epidemic and securing our border, and protecting critical health and human services for vulnerable Arizonans."

The approved budget comes under the threat of a lawsuit from Democratic Arizona Attorney General Kris Mayes.

She unsuccessfully tried to convince lawmakers to reverse their plan to take $195 million over four years from the state's share of a national opioid settlement to close holes in the state prison system's budget.

On Saturday night, Mayes said she was "deeply disappointed" with the Legislature's actions. Her spokesman said Mayes stood by her comments that the plan was illegal and said she would be "analyzing the best legal course of action from here."

What we know: How will Arizona spend its $542 million opioid settlement money?

House passes budget with bipartisan support, opposition

The budget passed on a 34-21 vote in the House and, within a half-hour, on a 17-12 vote in the Senate.

In both chambers, members of the conservative Freedom Caucus often joined Democratic leadership and the caucus' liberal wing in opposition.

Support came from Republican leaders and rank-and-file members of both parties.

Freedom Caucus members — including Reps. Alexander Kolodin, Barbara Parker, Austin Smith and Rachel Jones — repeatedly raised process concerns, noting lawmakers were being asked to vote on legislation before they had time to read it.

After consistently railing against the budget bills as lawmakers deliberated, Kolodin called both the budget and the process "a train wreck" that "bastardized the way that the legislative process is supposed to work."

"Many of my colleagues on this side of the aisle think that Katie Hobbs is not particularly bright," Kolodin said. "But today she has certainly outplayed us, because she's playing the long game."

Toma fired back that the plan was "fiscally conservative" and produced the balanced budget that the state Constitution requires.

"Despite facing a nearly $1.5 billion shortfall, we've fixed this deficit without negatively impacting border security or public safety, without negatively impacting school choice, and preserving still many of our commitments to water," he said. "We've prioritized and protected many transportation projects that were important to members."

He defended the flat income tax and universal voucher program, the two programs that he sponsored and that Democrats blame for the state’s deficit. That shortfall came on the heels of $2.5 billion in spare cash just a year ago.

Speaker Pro Tem Travis Grantham, R-Gilbert, said the budget was a bipartisan product and thus a compromise.

Lawmakers can't get everything they want, he said as he voted "yes" on a budget measure.

"This is as good as it gets, folks," he said.

Rep. Alma Hernandez echoed that sentiment, as well as a Democratic catchphrase that dismissed the notion of a "perfect budget" and was repeated roughly two dozen times across closing arguments.

"Anyone who believes that we will ever have a perfect budget, I don't know where you are getting that from," the Tucson Democrat said as she voted "yes." "I have served under Republican administrations and now Democratic administrations, and we will never see a perfect budget.

"That is delusional, truly."

Three members of the teacher caucus — Democratic Reps. Laura Terech, Jennifer Pawlik and Judy Schwiebert — highlighted investments in education, child care and a scholarship program at the community colleges.

The fourth member of the teacher caucus, Rep. Nancy Gutierrez, D-Tucson, split from her colleagues.

Gutierrez said she was "disgusted" with the budget, its failure to curb the school voucher program and the loss of a $37 million fund intended to help public school students in low-income areas.

Rep. Myron Tsosie, D-Chinle, praised the budget for "supporting tribal nations."

But like Republicans, Democratic leaders also raised process concerns. House Minority Leader Lupe Contreras, D-Avondale, told reporters his caucus was largely shut out of negotiations between GOP legislative leaders and Hobbs.

In the Senate, Minority Leader Mitzi Epstein excoriated the voucher program as an unchecked run on the state's revenue. She blamed Republican leaders for refusing to make concessions not only on vouchers but also for refusing to bend on the transfer of opioid dollars from serving Arizonans statewide to the state prison system.

"It would have been a disaster without the Democratic caucus," she said as she voted "no" on the budget.

But Petersen, the Senate president, said negotiators found a middle ground in the cuts.

"We put together a bipartisan budget," Petersen told The Republic after voting "yes." "It doesn't have anything super liberal in it, nothing uber Republican."

Others also pointed fingers, somewhat obliquely, at Hobbs for not taking a stronger stand for Democratic priorities.

“When you’re in a leadership position, you should have a spine," said Sen. Anna Hernandez, a Democrat who is leaving the Senate to seek a seat on the Phoenix City Council. She made a reference to the person at the "top of the tower." The Governor's Office is on the upper floors of the state's Executive Tower.

Sen. Catherine Miranda, D-Phoenix, cast her "no" vote as a protest against the raid on the opioid fund, which she said would be robbed of the ability to help Arizonans struggling with addiction. She said she could not tolerate the "sleight of hand" that was swiping $75 million from the fund.

AG's opposition to opioid fund raid stalled Senate progress

A key stumbling block in passing the budget came from Mayes' opposition to what she sees as the theft of opioid settlement dollars to cover prison expenses. Mayes said she and the feds would both sue over the move, and the Legislature would lose in court.

An initial version of the budget took $75 million from a national opioid settlement to help the state Department of Corrections, Rehabilitation & Reentry cover its costs for the remainder of this year and all of next year stemming from a settlement over inadequate health care. The budget proposed pulling another $40 million a year for three years after that.

Hobbs and GOP leaders eyed the opioid dollars to help close the state’s budget deficit. They argued the settlement agreement allows some of the funds to be used for opioid purposes in prisons and jails. Mayes agreed but said there was a process that must be followed — and the budget authors weren’t following it. Plus, she argued, the budget ask went too far.

“The scale of this is just staggering and mind-blowing,” Mayes told The Arizona Republic, referring to the budget proposal. “They want to spend half of Arizona’s entire state share of the opioid fund on the prisons.”

The legal argument held sway among many legislative Democrats.

Lawmakers adjourn with Mayes impeachment, Dem ethics complaints outstanding

While lawmakers tied up some loose ends on Friday and Saturday as they wrapped up the budget, some priorities died with the sound of the gavel signaling sine die — Latin for adjourning the legislative session with no scheduled date to return.

Lawmakers opted against holding a trial after a group of House Republicans in May recommended Mayes be impeached for what it described as abusing her authority, attacking political opponents and selectively enforcing state laws.

The House Ad Hoc Committee on Executive Oversight released a 102-page document outlining its findings and exhibits, recommending the Legislature use its power to impeach Mayes, a Democrat.

The committee said Mayes committed "malfeasance in office," citing six examples. Those include Mayes' letter warning against a hand count of ballots in Mohave County, her unsuccessful lawsuit trying to stop delegation of election administration in Cochise County, her consumer alert about "crisis pregnancy centers" and town halls about water resources and possible nuisance lawsuits.

The committee faulted Mayes for not testifying before it, and for refusing to defend a 2022 law preventing transgender girls from playing school sports.

Mayes said the committee's investigation was a "sham" and "absurd." Democrats boycotted the panel.

Toma initially told The Republic he would vote to impeach Mayes based on what he had read so far of the committee's report. But he added in May that he would need to check the temperature of House Republicans, and appeared skeptical of the proceeding given the requirement for support from two-thirds of the closely divided Senate to convict.

“I happen to be pretty decent at math,” Toma said. “I understand to get to 20 in the Senate would be difficult.”

In the end, the impeachment push died without a full House vote.

Potential punishment for two House Democrats for an ethics violation met the same fate.

The bipartisan House Ethics Committee in early June unanimously decided the conduct of Rep. Oscar De Los Santos and Rep. Analise Ortiz in the aftermath of the first failed vote seeking to overturn Arizona's 1864 abortion ban violated a House rule that bars disorderly conduct.

In addition, panel members found De Los Santos, the Democrats' assistant minority leader, also ran afoul of House rules dealing with decorum and debate, as well as impermissible debate.

In the fevered wake of the first thwarted repeal attempt, De Los Santos and Ortiz led some fellow Democrats in repeated chants of "shame," "blood on your hands" and "hold the vote," directed at their Republican colleagues.

De Los Santos crossed the line when he led and participated in these actions, the report stated. Likewise, the ethics panel concluded Ortiz's behavior also was disorderly.

The two lawmakers in a joint reply said they were speaking on behalf of their constituents when they led the protest.

But as the final hours of the legislative session ticked by, it became increasingly clear a vote on punishing the Phoenix Democrats was not top of mind.

"We're working on the budget right now. It's out of my hands," Contreras told reporters from the House floor on Saturday.

"We don't run this building."

Locking horns: Arizona GOP report calls for Dem AG Kris Mayes to be impeached. She calls it a 'sham'

Arizona Republic reporters Ray Stern and Stacey Barchenger contributed to this article.

Reporter Mary Jo Pitzl can be reached at [email protected] or at 602-228-7566 and follow her on Threads as well as on X, the platform formerly known as Twitter, @maryjpitzl.

Pat Poblete is the state politics and issues editor at The Arizona Republic. Reach him at [email protected].

This article originally appeared on Arizona Republic: Arizona budget: Lawmakers approve $16.1B plan after filling $1.4B hole