The 2021 legislative session in Arizona was at times chaotic and contentious, particularly during the budgeting process that wrapped up on the day before the start of the new fiscal year. The 171-day session was the third longest in state history, but 2022 may not be any easier.
“It was a brutal year, and I can’t see this one being much different. I really can’t,” said Rep. Regina Cobb (R-Kingman).
Although conventional wisdom says that legislative sessions are shorter in an election year, Cobb said she doesn’t expect that to be the case this year.
“With the election year, it usually is a short session, but we have so many issues,” Cobb said. “We had double the bills last year than we had the prior year because we were doing 2020 and 2021 together. But this year, already, the rate bills are being dropped is double what it was last year.”
The 2022 legislative session is set to kick off on Monday, but as of Friday there were already 115 bills introduced in the State Senate, with another 48 bills introduced in the House.
Although Cobb plans to run several bills herself during the 2022 session including three focused on water management that she has been pushing for the last few years, she said as the House Appropriations Chair, her top priority is always the budget.
After passing the budget just one day before it officially went into effect last year, Cobb said the goal is to get the budget done as quickly as possible this year. But that may be easier said than done.
“There are going to be many issues,” Cobb said with a laugh.
Cobb said she and Senate Appropriation’s Chair David Gowan (R-Sierra Vista) have put in a lot of work on the budget already and have been meeting with all of the state agencies since this summer. Cobb and Gowan sat down for a full day meeting in late December to take stock of everything that they agree on, and Cobb said she feels good about where things are leading into the start of the session.
“I think we have a preliminary budget that we can say, ‘These are the basics, and this is what we need to do,’” Cobb said.
But the budget still has a long ways to go before a majority of the House and the Senate agree with the Governor on a spending plan for Fiscal Year 2022-23.
What court ruling means
Although Cobb has several years of experience working on the state budget, this year will be a little bit different than it has been in the past after the Arizona Supreme Court ruled that reconciliation bills have to have a single subject, and voided several laws that were included in the reconciliation process last year.
“In the past there has been small amounts of policy able to get through the budget,” Cobb said. “This past year we had more policy than normal in the budget process. We were called on it. The supreme court came back and said you have to have a single subject.”
The Supreme Court’s ruling was made in early November, but Cobb said they haven’t provided any additional guidance about how the process should be handled. Cobb explained that she generally runs 11 budget bills – each with a topic such as “health” or “education.”
“The Supreme Court hasn’t given us direction as far as, do we do single subjects of health like we have done in the past, or do we have to separate it out? So am I going to have 11 bills, or am I going to have 100 bills? That is going to make a big impact on how the budget goes in itself,” Cobb said.
How to spend a surplus
Cobb said the state is looking at another large surplus this year for the second year in a row. While that may be good news for the state’s financial health, Cobb said it will likely lead to more debate about what to do with it.
“Arizona is doing fantastic economically – our corporate taxes are double digits above what we anticipated,” she said. “That is what is bringing in most of the dollars, but in every aspect of our income – all of them exceeded our expectations. So Arizona is doing really well. But on the other side, what do you do with that surplus? Do you pay off debt? Do you get prepared for a downturn because you know there is going to be a downturn at some time? That is where we will probably have difficulties. Some members are going to want to spend.”
Cobb said when there is a large surplus, members tend to feel like they need more. She said that was the case last year when there was a $1 billion surplus.
“I think the budgeting process was pretty plentiful last year,” she said. “I think everybody had Christmas last year, and this year it looks like there is going to be another Christmas. Sometimes that is a problem because once you put it on there, it becomes the baseline moving forward. If anything gets cut off of that then it is a cut, whether it was during a fat year or a lean year.”
Cobb said that Arizona has paid off all of the debt that it had on state buildings, and nearly all the debt incurred during the economic downturn in 2009 and 2010.
Cobb said when it comes to crafting the budget, she tends to lean towards spending on infrastructure.
“Infrastructure, roads or broadband is always a good investment,” Cobb said. “Your return on investment is not only better roads and communications for everything from hospitals and schools, but also nothing says that we are doing well more than when you are seeing orange cones everywhere. That means that something is moving, and the dollars are being spent where they should be spent.”
Another issue that is likely to make headlines during the budgeting process is the expenditure limitation for Arizona school districts.
“We have a lawsuit going on there that isn’t going to be heard until Jan. 20,” Cobb said. “So I don’t see the state making any movement prior to that. I know that’s not what the school districts want to hear, because the expenditure limitation is a big deal for them this year.”