Budget Deadlock Threatens Government Shutdown Countdown

House Speaker Steve Montenegro has introduced a $17 billion budget proposal for the upcoming fiscal year, set to begin on July 1, despite a looming veto threat from Governor Katie Hobbs.

Montenegro, a Republican from Goodyear, criticized the previously negotiated $17.6 billion plan as irresponsible and claims there is insufficient support from House GOP members. The proposed spending plan largely mirrors the current fiscal year’s budget, with some adjustments.

The House is scheduled to vote on the plan on June 25. While Montenegro is open to discussions for adjustments if Hobbs agrees to a more acceptable proposal, he insists on having a plan in place given the tight deadline.

Senate President Warren Petersen, despite backing the Senate’s budget plan, has expressed willingness to see what the House produces. However, with the governor’s veto threat looming, the future of any proposal remains uncertain.

The pressure mounts as a budget deadlock could lead to a government shutdown on July 1, with the state’s constitution lacking provisions for operations without a budget.

Montenegro’s “continuation budget” faces scrutiny, especially given the dynamics within the House. Currently, there are 33 GOP lawmakers, but one is on honeymoon, and Democrats have indicated they will oppose the bill. House Minority Leader Oscar De Los Santos criticized the plan, asserting that it will negatively impact public schools, health care, and essential services.

Montenegro must navigate these obstacles carefully. Notable GOP lawmaker Rep. Justin Olson has taken a firm stance, arguing that the Senate’s budget proposal reflects an unsustainable spending increase significantly outpacing inflation and population growth.

In light of historical budget crises, Olsen emphasized the need for fiscal responsibility to avoid repeating past mistakes, which led to severe budget deficits and cuts.

As negotiations continue, the Republican caucus’s support for Montenegro’s approach remains in question; how far they will compromise to avoid a fiscal catastrophe is still unfolding.