An effort to adopt a stripped-down state budget and adjourn on Thursday slammed into a demand by Democratic lawmakers to earmark an extra $50 million to cope with the spiraling effects of COVID-19
The Senate budget included some $50 million in a Crisis Contingency and Safety Net Fund the governor could use for economic assistance during an emergency. The money could pay for things like housing assistance, shelter for the homeless, cash for food banks, help for health care providers, nonprofit organizations and businesses with fewer than 50 employees.
The governor could augment the account with money raised from other sources, including federal grants and private sources.
However, House Speaker Rusty Bowers (R-Mesa) said the extra spending wasn’t acceptable to House Republicans, according to a story by Howard Fischer, with Capitol Media Services.
The impasse foiled a plan to adjourn the Legislature, with several members already self-isolating for fear of infection by COVID-19.
Lawmakers had been on track to adopt a pared-down, $11.8 billion budget to keep state agencies running, with no new spending or tax cuts.
The Democrats had more say in the Senate, partly because two Republican senators did not attend the session for fear of infection by the virus.
House Republicans rejected a series of proposals by Democrats.
That included a bill by Rep. Arlando Teller (D-Chinle) to establish a $40 million fund to avoid evictions due to temporary job losses during the crisis.
Another bill would have temporarily eliminated a two-year limit on food stamps as well as a new provision that anyone receiving food assistance go out and look for work.
Democrats also objected to a pared-down budget that dropped added funding for schools included in Gov. Doug Ducey’s budget proposal. That includes only half of $128 million in school assistance for things like textbooks and computers owed to the schools under state formulas. Lawmakers cut $300 million from the fund during the recession and have only begun to restore the money.
Republicans wanted to hold onto the money for at least a year longer, arguing the economy could slip into recession — with the state heavily dependent on volatile sales tax collections. During the last recession, the fall in sales tax cut state revenues by a third. Since then, lawmakers have cut the individual and corporate income tax rates.
The state has amassed a $1 billion “rainy day” fund as the economy has boomed in the past several years, but hasn’t yet fully restored school funding cut during the recession.
The package would postpone discussions of most of the contentious issues that had slowed adoption of the budget until the outbreak, including new tax cuts.
The Legislature will likely meet again in the coming week to hash out an agreement, although the timing remains unclear.
The Legislature has already authorized $55 million in additional funding from the reserves for measures necessary to respond to the crisis. Much of that money will likely go for extra testing and surveillance and was passed unanimously by the Legislature when Ducey declared a state emergency.
The state remains heavily dependent on sales tax, which could take a big hit in the next few months due to the spreading effects of COVID-19. Major events like spring training have already been canceled, bars and restaurants have closed in Maricopa, Pima and Pinal counties, as well as cities like Flagstaff. The tourist season will likely take a huge hit. Some national experts have predicted the onset of a recession, with unemployment levels rising in the short term rising above 10%.
Democrats argued lawmakers should lay the groundwork for an effective response to the crisis before heading home — as well as pass key financial measures.
For instance, Rep. David Cook (R-Globe) urged his colleagues to vote on a plan to spend $20 million building a bridge over Tonto Creek, in the wake of the drowning of three children at a flooded crossing last year.
Also potentially on hold for now is $30 million over the next year for new locks at some state prisons and switching swamp coolers for air conditioners — since the humid air from the swamp coolers is rusting the locks.