Hobbs proposes cuts, new spending in budget as state faces shortfall



(The Center Square) – Arizona Democratic Gov. Katie Hobbs released her budget proposal on Friday afternoon.

The governor’s priorities will need to go up against the Republican-majority Legislature to reach a budget both can agree to. Her budget uses a $463 million shortfall estimate, but the Joint Legislative Budget Committee is projecting a $1.7 billion shortfall as of Friday, according to ABC 15.

Despite the projected deficit, the proposed budget would not tap into the state’s “rainy day” fund.

Notable ideas in Hobbs’ proposal include the following:

A retroactive 100-days in public school requirement for students using Empower Scholarship Account program funds in an effort to have more people paying for private school tuition without assistance. For example, if a parent has their child enrolled in private kindergarten having never been in a public school before, they will need to be placed in a public school for first grade in order to return to private school using ESA funds. The governor’s office estimates that most families will keep their students in private school regardless. The requirement existed prior to the program becoming universal under the Ducey administration.$13 million toward a mortgage assistance program intended to help with down payments for “first-time homebuyers.”$100 million “one-time” increase pulled from the General Fund for childcare servicesOne-time increase of $545,200 to create a “Prescription Drug Affordability Division” at the Department of Insurance and Financial Institutions$1 million for Operation SECURE, the effort launched by the governor to tackle border security issues$15 million for the SAFE Initiative – meant to combat the fentanyl epidemic$46 million to beef up the state’s healthcare workforce with the AZ Healthy Tomorrow initiative, which is meant to help the universities

There are also measures listed intended to combat the shortfall including:

A one-time 1% budget cut on the Executive and Legislative branchesA “transfer” of $282 million to the general fund from various “boards and agencies”Scrapping the School Tuition Organizations income tax credit

“We’re bringing accountability to taxpayer spending,” Christian Slater, a spokesman for Hobbs, said regarding a proposed reign in of ESAs.

Arizona Senate and House Republicans lambasted the budget proposal as “wildly unrealistic.”

“These elements in her proposal are dead on arrival with the Republican Majority,” Senate Appropriations Chairman John Kavanagh said in a statement. “Her grandstanding of bipartisanship during her State of the State Address is a far cry from the reality of this budget proposal, as her funding cuts strictly target Republican priorities.”

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