It’s official. The state Legislature hasn’t been in session this long since 2013 when former Gov. Jan Brewer successfully pushed through Medicaid expansion after a lengthy fight that divided the state's Republican leadership.
So, what’s the holdup?
Attempts to strike a budget deal have stalled out in both chambers, with concerns running the gamut from too much spending (some Republicans are criticizing items like pay raises for Department of Child Safety caseworkers, a tax exemption for military pensions, and Alzheimer's research) to not enough (the League of Arizona Cities and Towns estimates local governments would see a 31% cut in revenue under the proposed flat tax). And as more time goes on, more policy issues are being creatively woven into the package, including new and undebated matters, as well as resurrected items that failed earlier in the session.
Gov. Doug Ducey even vetoed 22 bills as an incentive to lawmakers to pass a budget before he would consider any more enactments. His message came through loud and clear, although the Legislature did reintroduce all of the bills that died on his desk. But there has been no movement on any remaining measures, nor will there be until the budget stalemate is resolved. When that day comes, it will be a mad rush to see which bills get calendared for floor action and which get left behind—although it’s anyone’s guess as to when that might be.
The House and Senate took the week off after Memorial Day in an effort to let tempers cool and then reconvened earlier this week to take another pass at negotiations. However, despite new amendments intended to address specific concerns, Republicans didn’t have the votes. Leadership even put the tax package up on the board for a formal vote – effectively double-dog-daring conservative members to shoot down the largest tax cut in state history – but still couldn’t flip the two Republican holdouts.
The most pressing concern is the fact that we are quickly approaching the end of the fiscal year (June 30). Failure to pass a budget before the fiscal year ends could result in a government shutdown, meaning state employees face possible furloughs, although specifics of that scenario are murky. With the deadline looming, speculation is rising about the possibility that the Legislature and governor will concede to the conflict and attempt to pass a “skinny budget” which would maintain current service funding levels. Unknown is whether it would be similar to last year’s skinny budget, which was a conservative approach to hedge against anticipated – but unrealized – budget shortfalls, or whether the skinny budget will include selected high priority items that enjoy broad support. As of today, there is still no clear path.
Adding another layer to all of this is Thursday's announcement from Gov. Ducey that he is calling a special session to address issues related to wildfire response, which will bring members back to the Capitol where negotiations on budget and tax issues will continue. While the date of the upcoming special session hasn’t been set, it will likely occur next week and will run concurrently with the regular session. More to come on that.