Questions hang over the budget, major bills as Arizona Legislature makes quick exit

With its scandals, culture war skirmishes and sunny economic outlook, this year's legislative session started out like plenty of others at the Arizona Capitol.

But the Legislature's quick adjournment on Monday was unlike anything else.

The Senate's swift passage of a basic budget and $50 million in relief pointed to the different political dynamics at play in the Legislature's two chambers. While the House drudged through a partisan back-and-forth, top Republicans and Democrats in the Senate hatched a deal.

And as lawmakers recessed with tentative plans to return April 13, they left in legislative purgatory a long list of proposed bills that will be re-examined in the harsh light of a very different political reality.

When they return, money is likely to be tighter, the needs greater and the political pressures altered.

"We're not going to have the same budget we started with," said Rep. Regina Cobb, a Republican from Kingman who chairs the House Appropriations Committee.

Gov. Doug Ducey had initially proposed a larger spending plan than the basic $11.8 billion budget approved Monday. Ducey wanted to exempt the pensions of military retirees from income tax and pitched millions of dollars for education initiatives and infrastructure projects. His plan totaled $12.3 billion.

Some lawmakers talked about bigger tax cuts or fully restoring district additional assistance for schools, which they are phasing in after cuts in previous years. Senate and House Republicans proposed budgets totaling more than $12 billion. Democrats argued many of these steps would still leave the state government stretched thin given the state's growth and the cuts of the last recession.

"I think we're going to be doing some mitigation," Cobb said.

The Joint Legislative Budget Committee reported this week that the state collected less revenue than expected in February due to income tax processing — a factor that had nothing to do with the pandemic.

But in their monthly update for legislators, the committee's staff cautioned that the numbers will get worse.

"The decline in the growth rate will be further accelerated by the economic impact of COVID-19," their note said.

Policymakers can fall back on a rainy day fund flush with about $1 billion.

The latest developments are likely to shelve plans for major tax cuts, though.

"We were hoping to get a good tax cut and give money back to our constituents but I think this is really going to change things," Cobb said.

The fate of bills may be sealed 

Any number of bills that might increase spending are likely to look all the more tenuous when lawmakers return to the Capitol. So, too, will bills that might take up a lot of political bandwidth during a crisis.

Bills that have not yet passed and exist now in sort of suspended animation include a proposal to double the gas tax of 18 cents over the next several years to pay for road repairs and improvements and impose a tax on electric and hybrid vehicles.

Legislation to help firefighters with workers compensation claims stemming from cancer, to toughen the rules on misconduct by school employees and to give local governments more leeway to regulate short-term vacation rentals all are on hold.

Legislation to ban transgender students from competing in girls' sports has stalled, too.

A slew of proposed constitutional amendments proposed for the ballot in November and dealing with issues ranging from redistricting to direct democracy may also sputter.

The last week also gave a glimpse of how difficult it may be to decide how to proceed if lawmakers return.

House, Senate on different paths

There was new urgency among lawmakers about a week ago to pass the necessary legislation and temporarily adjourn amid public health concerns.

The House slogged through legislation, however, as Republicans rebuffed attempts by Democrats to amend budget bills or related legislation with additional funding for public housing and a list of other priorities.

Meanwhile, Senate President Karen Fann, R-Prescott, and Minority Leader David Bradley, D-Tucson, forged a deal on economic relief that won support from Democrats and allowed Fann to pass a budget without a total consensus in her Republican caucus.

While both chambers have recessed until April 13, they can move that date forward or backward if the Senate president and House speaker agree.

New data in early April will give lawmakers a better sense of their new budgetary reality and some scope of the demand for help. But it will not be the full picture.

Many lawmakers said over the last week that they do not expect the $50 million in relief approved by the House on Monday will suffice.

And at this point, lawmakers have no idea what kind of revenue they will have to operate with, said Sen. Lela Alston, a Democrat from Phoenix and veteran lawmaker.

"It surprises me the speed at which our world has turned," she said.

Contact Andrew Oxford at andrew.oxford@arizonarepublic.com or on Twitter at @andrewboxford.