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No deal yet on Arizona spending and tax-cut plan; lawmakers recess
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No deal yet on Arizona spending and tax-cut plan; lawmakers recess

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PHOENIX — Senate Republicans gave up Thursday on trying to hammer out and immediately adopt a deal for a new $12.8 billion state spending plan and a $1.9 billion tax cut.

“We thought we were really, really close to getting a budget done today,’’ said Senate President Karen Fann, R-Prescott. But those hopes dissolved.

“Over the last 12 hours we’re further apart now than we were,’’ Fann said. She said there were “a lot of new requests, a lot of new demands’’ by lawmakers on what they wanted to see in the package.

“So, it would be futile for us to try and put this up (for a vote) and get something passed,’’ she said. “We obviously need to put things back together again and figure out where we are going to go from here.’’

Fann’s efforts to get all 16 Republicans in her chamber to agree are complicated by the fact that some believe there is too much spending on things they do not consider priorities while others have “asks’’ of their own. She needs 16 votes in the 30-member chamber to advance a plan.

The same problem exists across the courtyard in the House, where Republicans, who have just 31 votes in that 60-member body, find a divergence of interests.

At this point the plan is to recess the legislative session for two weeks, until June 10. The procedural motion to set that date to reconvene does permit earlier action if Fann and House Speaker Russell Bowers, R-Mesa, reach an accord with members before then.

Fann, in an interview with Capitol Media Services, expressed frustration that the plan did not come together.

“We were really, really close” on Wednesday night, she said. “And we thought all we had to do was ... button up six or eight little things that we needed to clarify.”

All that changed overnight.

“When we came back in (Thursday) morning we now had a list of new things from the House, people that wanted things in the budget and people that wanted things out of the budget,” Fann said. Such changes aren’t simple, she added.

“Most of the things they wanted out of the budget were either things belonging to the governor or other members,’’ Fann said, without providing specifics. “And it was negotiated ... with those things.’’

She isn’t just blaming House members. “Some of our Senate members this morning, they came in with some new or adjusted requests, things that we thought we had an agreement on,’’ Fann said. “Apparently there wasn’t a solid agreement,’’ particularly when the deals were reduced to specific budget language, she said.

“So we needed a little more time to get people back closer on board with it.”

That leaves the question of whether another two weeks will make any difference.

“Yeah, I’m going to stick my neck out and say I’m confident,’’ Fann said.

She has something working in her favor: a hard deadline of July 1, the beginning of the new fiscal year, to adopt a spending plan.

“That is our only, No. 1 constitutional thing we must do,” Fann said. “Everything else is superfluous. Consequently, the closer it gets to that date, the more urgency and pressure that people will finally say, ‘OK, I’m going to have to give a little on this one.’ ‘’

In the past, Democrats’ votes have sometimes been sought, when it was easier for Republican legislative leaders to alter the plan to attract bipartisan support and get around a few Republican holdouts.

“It’s still too early,” Fann said of whether that would be a strategy.

Senate Minority Leader Rebecca Rios, D-Phoenix, said she’s willing to talk. “I keep waiting for my phone to ring,” she said.

Rios said she doubts Fann will come to her soon, at least not as long as a centerpiece of the GOP plan is a flat 2.5% tax rate and a cap on other income taxes on the most wealthy.

“The flat tax is a nonstarter for Democrats,” she said. “So that could be why they have not invited us to the table yet.”

Still, Rios said Democrats are willing to discuss some sort of tax cut. But it would be nowhere near the $1.9 billion annual cost. And it would have to be structured in a radically different way.

“Democrats would be more than willing to sit down and negotiate a budget that provided tax relief across the board, to working families, not a tax cut that is aimed at the top 20%. That’s ludicrous,” Rios said.

Fann, asked if that is an option, said, “Well, everything’s negotiable when you’ve got to do 16 and 31,” the number of votes needed to enact a budget.

Rios said if Republican leaders want votes from Democrats there will be some other requests. Much of those revolve around relief for Arizonans still dealing with the effects and after-effects of the pandemic.

She said that means dealing “substantially” with issues of homelessness, evictions, child-care assistance, and more money to help relatives deal with children who have been removed from their homes rather than having them placed with the Department of Child Safety.

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