Budget Stalemate: House and Senate Republicans Clash Amidst Financial Tensions

Arizona House Republicans are pursuing a solo budget plan, diverging from Senate negotiations as the July 1 fiscal year deadline looms. On July 11, they unveiled their spending proposal amid ongoing discord with their Senate counterparts.

House Speaker Steve Montenegro and Senate President Warren Petersen remain at an impasse over budget negotiations involving Democratic Gov. Katie Hobbs. Meanwhile, Senate Republicans have been negotiating directly with Hobbs for over two weeks, progressing towards a potential agreement.

Sen. John Kavanagh revealed that the Senate GOP plans to allocate a $270 million budget surplus from a $17.6 billion budget. Each faction of the GOP in both chambers would receive $90 million, while Hobbs and the minority Democrats would have access to the remaining funds.

Conversely, the House has different plans for the surplus, preferring to avoid splitting funds between political factions. Kavanagh indicated that the Senate is prepared to set aside the House GOP’s allocation until Montenegro is willing to negotiate.

“We are still hoping for reconciliation,” Kavanagh remarked, noting the House could choose how to use its funds later. However, uncertainty remains if a final budget vote can be secured without House participation.

A standoff between the House and Senate GOP is unprecedented, risking a potential failure to meet the June 30 deadline for the upcoming fiscal year. House Democratic Leader Oscar De Los Santos criticized the House GOP’s solo plan during a recent committee session, emphasizing a lack of negotiation with Democrats or the Governor.

De Los Santos remarked that successful governance requires bipartisan cooperation, calling Montenegro’s independent approach ineffective and labeling it as a “sham.” He expressed skepticism about the proposal receiving necessary support in the Senate.

In contrast, Rep. Matt Gress, a significant figure in the House budget discussions, asserted confidence that the measure could secure enough votes. He emphasized the intent to kickstart the budget process, pointing to the lack of engagement from the Governor’s Office in negotiations.

Gress described the House’s budget as structurally balanced, aiming to invest in public safety, infrastructure, and economic opportunity while limiting governmental scope. He noted plans to prioritize state officer raises and proposed tuition reductions for in-state university students.

Hobbs’ office has yet to respond as budget talks unfold, amid a backdrop of limited legislative activity since late April focused on budget negotiations. The division among GOP factions has become increasingly apparent, creating challenges for reaching a consensus.

As of June 11, the House has introduced its budget plan and aims for swift legislative action. Montenegro expressed determination to finalize the budget by the week’s end, with Gress optimistic about obtaining the requisite votes.