PHOENIX — With the budget clock ticking, Gov. Katie Hobbs says she and Republicans in the Arizona Legislature are close to a deal.
Just three weeks ago, Hobbs vetoed a Republican budget proposal she called “unbalanced and reckless.” But now, five weeks before the new fiscal year begins, the Democratic governor said she’s confident a deal is near.
“We've done this for the past three years,” she said Monday. “I'm confident we'll get to a bipartisan balanced budget that works for Arizona.”
Arizona Senate President Warren Petersen agreed, telling ABC15 in a text message Friday: “We have closed out most of the line items. But the last details can be the hardest.”
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Hobbs and Republicans have been at odds for months on how to enact state versions of President Donald Trump’s tax cuts. She vetoed two tax-conformity bills, and Republicans have vowed to pass full conformity so taxpayers won’t have to file amended returns.
The governor also walked away from budget talks in March over a dispute over whether to send voters a new Proposition 123 to increase the amount of State Land Trust money for public schools and instituted a moratorium on legislation.
Hobbs and Republicans restarted budget talks soon after she vetoed their budget package, and she ended her bill moratorium on May 14.
"I think a lot of what we see in the public is political gamesmanship,” Hobbs said. “And we've had that before, and we've gotten past that and gotten to the table and got negotiations done.”
In the budget proposal she released in January, Hobbs called for more staffing for the Department of Economic Security, expanded utility assistance and funding for affordable housing, and proposed a new fee on short-term rentals, hiking fees on large sportsbooks, and repealing tax incentives for data centers.
Meanwhile, the vetoed Republican proposal included full tax conformity and 5% cuts to all but three state agencies.
“I knew when we put out our budget that we would have to compromise,” she said. “We're not to the finish line yet. We're still working out the details of what the final budget is going to look like.”
Hobbs wouldn’t comment on what compromises she and Republicans have already agreed to.
Petersen said the earliest a budget could pass would be in the first two weeks of June, and Hobbs said to expect a budget within a couple of weeks.
In mid-June, Republican lawmakers are visiting Washington, D.C., for a three-day, taxpayer-funded trip to discuss how they can help Trump with his policy agenda.
A new budget must be in place July 1, two weeks after the June 15-17 trip.
