The Round Up: 2024 Arizona Legislative Preview
And we're back.
A note to our readers: The Arizona Legislature is set to commence its 2024 session today, with Governor Katie Hobbs delivering her second state-of-the-state address. Our team has put together a thorough legislative preview for our readers, informing you of the issues that will likely be flashpoints, and the key players who will be jockeying for their priorities.
More thorough round-ups like these are not contributions from outside authors, but produced by 1912 analysts. They will be published on a regular basis. We hope you enjoy, and consider donating to support our sustained work.
Looking back
Following a record long session in 2023, Arizona’s state legislative chambers–both Republican-controlled, albeit with slim one-seat advantages–are set to convene for the first time today. Coinciding with the legislature’s start, Governor Katie Hobbs is scheduled to deliver her second State of the State Address before lawmakers at the Capitol.
In her first year as Governor, Hobbs vetoed 143 bills, all of which were Republican-sponsored. While Hobbs made few friends across the aisle in 2023, the state’s current budget deficit is expected to force Republican and Democrat lawmakers to compromise significantly on key issues.
Republican House Speaker Ben Toma echoed the sentiment, commenting that “there isn’t a lot of appetite expressed so far for continuing this putting up bills that we know are not going to get signed…There are things that are doable and things that are not.”
Moving forward, leaders of both parties, such as Hobbs and Toma, will be crucial in working to resolve the budget shortfall—in addition to managing the state’s water, increasing its housing supply, and funding education at all levels. Unlike last session, in which legislators were all assigned tens of millions of dollars to allocate as they wished, this session will be defined by the scarcity of funds available to lawmakers.
Key quotes
Governor Katie Hobbs (D):
“The state of our state is strong. We brought world-class investments to Arizona, creating a pipeline for thousands of good-paying jobs. I brokered a historic deal with our neighboring states to protect Arizona's water. We launched Operation Secure to take border action when the federal government failed, and I've fought to protect reproductive freedoms to ensure you can determine your own future.”
Speaker Ben Toma (R):
“We're here to pass good policy. We're here to keep the business environment friendly, the work environment friendly, regulations low, and taxes low. And we're gonna continue to do that. Obviously, public safety remains a top priority. That's not gonna be an issue just because there's a deficit.”
Senate President Warren Petersen (R):
“We’ve got a lot of things that are very positive for Arizona, we’re going to be reducing gas prices by anywhere from 30 cents to a dollar a gallon we're estimating. We're going to increase teacher pay above the national average.”
Senate President Pro Tempore T.J. Shope (R):
“I think it's very fair to say that the state budget conversation will be the thing that sucks all the oxygen out of the room. It's one of the reasons why I don't think you'll see as many vetoes of bills this session. It's one of the reasons I, I don't think you'll have many other issues, and that's not to say that there aren't other issues that are important. But the state budget underpins every single one of those issues because in order to potentially appropriate money to any one of those that you need to solve, you need to have a balanced budget.”
Senate Minority Leader Mitzi Epstein (D):
“Putting a budget out before April is reckless. April is when we have our finance advisory committee. When we get those finalized numbers, it's, again, budgeting with your eyes closed.”
House Minority Leader Lupe Contreras (D):
“We need to protect our workers…[W]ith the population growth here in Arizona, the people that are coming from other states and their bodies aren’t acclimated to this and the heat is getting worse. With that population growth comes problems in homelessness and here we are with the deaths that we’re having. We need to have some kind of heat mitigation for the future, and we need to pass some legislation to help that out. We need to do something with the homelessness problem. We need to do something with our disability communities.”
Assistant House Democrat Leader Oscar de los Santos (D):
“We’re trying to show the voters and the people of Arizona that we are ready to govern for all Arizonans, that we are the adults in the room, that we are not bogged down with conspiracy theories and strange ideas.”
On the Issues
Budget: After years of surpluses, the Arizona state government’s budget currently sits at a $406 million deficit, according to the Joint Legislative Budget Committee’s December 2023 Monthly Fiscal Highlights. Heading into the New Year, it is likely that both Republicans and Democrats will look to make cuts in areas misaligned with party interests.
For example, in their 2024 Majority Plan, Senate Republicans explained that they will “use sound fiscal management strategies, like trimming unnecessary spending and prioritizing government's top functions, in order to close the funding gap.”
In their own Majority Plan, House Republicans wrote that they will “again pursue meaningful policy and budgetary solutions in the upcoming legislative session to protect Arizona’s border,” in addition to “reprioritizing discretionary funding and programs.” Further, Speaker Toma recently emphasized that the deficit was caused “in part because we continue to spend while our while our flat-tax took full effect.”
On the Democrat side of the aisle, many have blamed the recent tax cuts and expansion of the state’s ESA (educational savings accounts) program for the growing deficit. In an interview, Assistant Democratic Leader Representative Oscar De Los Santos commented that “we got to take a look at the ESA program and put in place some commonsense accountability and transparency measures so we can tap the brakes and have a prudent budget.” Also, Representative Stahl Hamilton noted, “[w]hat we’ve learned since those universal vouchers have been put into place, is that 75% of the families who have their kids in private schools had them there before they got an ESA voucher from the state of Arizona.”
Education: As one of her first actions of the New Year, Governor Hobbs issued an eight-point plan intended to “increase accountability and transparency” surrounding the State’s $1 billion Empowerment Scholarship Account (ESA) program. Noting increased costs and “reports of frivolous spending,” Hobbs and her fellow legislative Democrats look to be somewhat united in their desire to increase transparency, and most likely limit the scope of the program during the new legislative session. For example, House Minority Leader Lupe Contreras emphasized that Arizona Republicans “keep going off and touting this is for the poor to be able to get into the better schools,” before arguing that “it’s not the poor getting into the better schools. It’s the people already in the good schools.”
Meanwhile, Republican lawmakers have signaled no intention to back off their support of the program, with Speaker Toma recently “refus[ing] to acknowledge that ESAs are responsible for our budget shortfall.” However, according to recent KTAR reporting, Senate Appropriations Chair John Kavanagh commented that Governor Hobbs’ “idea to require fingerprinting for teachers at private schools that receive tax dollars — make sense.” Further, the Senate Republican 2024 Majority Plan emphasizes the need to “protect parental choice,” while also “providing Arizona kids with a great education and a quality teacher at the front of every classroom.” The House Republican plan similarly notes the importance of “school choice this year and beyond.”
In addition to a focus on the ESA program and school choice, both Republicans and Democrats have noted their desire to increase K-12 resources during the upcoming session. Further, it is worth keeping an eye on proposed teacher pay increases announced by Petersen last November. The proposed raises–which would be funded by the state’s land trust endowment if passed–were recently labeled as a “cotton candy poof in the air” by Senate Democrat Leader Mitzi Epstein.
Water: So far this year, already more than 20 water-related bills have been introduced ahead of the legislature’s Monday opening. The influx of legislation continues a bipartisan focus on the state’s water future carried over from late 2023. Notably last November, Governor Hobbs’ received recommendations from the Governor’s Water Policy Council regarding how to “protect the state’s water future and address challenges in urban and rural Arizona.” As part of the recommendations, the Council highlighted the need for legislation to establish a “new groundwater management program in rural Arizona.”
According to recent reports in the AZ Republic, Arizona Democrats intend to “prioritize laws that would protect rural water supplies” should the Council’s recommendations “become legislation.” On the Republican side of the aisle, Arizona Senate Pro Tempore T.J. Shope commented that he doesn’t expect water to “rise to the top as far as being a number one issue” during the legislative session, and instead envisions lawmakers “piecemeal[ing] a few small things together.” In his party’s Majority Plan 2024, the AZ Senate GOP notes that it will “champion solutions acknowledging actual water management practices for overall basin health,” as well as “introduce an interim option for targeted basins, while refuting false claims of Arizona not having existing tools to manage aquifers.”
Housing: With increased housing costs and rates of homelessness rising across the state, leaders in both parties are expected to prioritize reforms focused on increasing inventory and access during the new legislative session.
Late last week, Democrats in both the House and Senate announced several housing proposals they intend to sponsor once the session begins on the 8th. According to the Democratic Caucus Housing Working Group, these bills will mainly prioritize “strengthening renters’ rights, financing affordable housing, limiting corporations from manipulating prices, encouraging zoning and land use decisions that will make it easier to build smaller starter homes and diverse housing typologies, and preventing evictions and homelessness.”
Though no Republicans were involved in the unveiling, the Democrat proposals build on a legislative package offered in 2023 by former Republican Representative Steve Kaiser. While the bills ultimately failed, Democratic Caucus Housing Working Group Co-Chair Representative Analise Ortiz commented that “[s]ome of those areas where we had strong consensus and strong bipartisan support I feel confident will make it across the finish line with bipartisan support.
On the Republican side, the State Senate GOP’s plan emphasizes that “[d]ue to the economically detrimental, factually flawed, and haphazardly announced narrative created by the Governor’s Office about Arizona’s water supply, our state is now in an even more precarious position when it comes to our housing inventory, while out of state investment begins to impact our economy.” In a statement, Senate President Warren Petersen commented that lawmakers “should never be talking about limiting or stopping home construction,” adding that housing is a “tiny little sliver of the water supply.” House Speaker Toma has also touched on the state’s housing woes, commenting that for the “first time ever we're above the national median price for homes in the valley.”
In the headlines
Arizona Senate Republicans Unveil 2024 Majority Plan (December 14, 2023) - “Moving into 2024, we'll remain laser-focused on easing the burden of rising costs for our citizens, while continuing to stop dangerous California-style policies from being implemented in the Grand Canyon State. We'll remain unified in protecting freedoms and constitutional rights, advocating for family values and safe communities, promoting free market principles and limited government, and stopping radical ideologies from infiltrating the way of life and opportunities we've established over the past decade for all Arizonans.”
House Speaker Ben Toma Announces Committee Appointments for 2nd Regular Session of the 56th Legislature (December 19, 2023) - “Arizona House Speaker Ben Toma announced member appointments to standing and statutory committees for the upcoming 2nd Regular Session of the 56th Legislature. The new session opens on January 8, 2024.”
Governor Katie Hobbs Announces Plan for ESA Accountability and Transparency (January 2, 2024) - “Governor Katie Hobbs announced her plan to increase accountability and transparency in the ESA voucher program that is projected to cost the state nearly $1 billion in the current fiscal year. The plan, which will be introduced in the upcoming legislative session and executive budget, will increase student safety, promote financial accountability, and hold private schools receiving taxpayer dollars to similar standards as public schools.”
Governor Hobbs to Give Second State of the State Address (January 5, 2024) - “I will deliver my second State of the State address on Monday, January 8th, at 2 PM. Join me as I report on the progress we’ve made over the past year and my plans for the year ahead.”
House Republican Release Majority Plan for 2024 Legislative Session (January 5, 2024) - “Last year, the House Republican Majority Caucus issued a Majority Plan designed to secure what is most important to everyday Arizonans including: border, elections, families, communities, schools, water future and economic growth. In this upcoming session, we plan to serve our constituents once more by doing what we do best: defending past legislative victories and protecting our citizens' fundamental rights.”
How to Solve Arizona’s Budget Deficit (January 5, 2024) - “On net, considering the state of information available to it, CSI estimates policymakers face a likely cash shortfall of approximately $1.3 billion over the next three years.”
This round-up was written by Jared (JJ) Cichoke. He currently works as a Policy Analyst after previously holding various roles with Senator Martha McSally (R-AZ) and the Senate Committee on Indian Affairs. A graduate of Vanderbilt University, he recently moved to Arizona after spending nearly his entire life in Portland, Oregon.