This blog will update on Friday with any new bills from the Arizona Legislature

The Arizona Legislature is expected to wrap up its session Friday but still has two major bills to consider, $1 billion in spending to shore up the state’s water supply and a massive expansion of taxpayer-funded vouchers to all schoolchildren.

Lawmakers passed a nearly $18 billion spending plan with bipartisan support as the sun rose Thursday. The budget was approved exactly one week before the deadline, as the fiscal year begins July 1. It now goes to Gov. Doug Ducey, who already has signaled his support for what he calls a budget that “will truly leave Arizona better than we found it.”

© Arizona Department of Administration The Arizona Legislature is hammering out final bills after approving a state budget for the fiscal year beginning July 1.

The 55th Legislature is likely to adjourn sine die (for the final time) after these and other final bills are considered.

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Follow coverage at the state Capitol by Arizona Republic reporters here.

5 takeaways: What to know about Arizona’s nearly $18B budget

Set for Friday vote: Arizona on cusp of largest school voucher program in the US

10:20 p.m.: Vouchers poised for Senate vote Friday

A bill that would give Arizona the largest voucher program in the nation advanced Thursday to a vote of the full Senate, but only after a prolonged debate among members of the Senate Appropriations Committee.

The argument over Arizona’s Empowerment Scholarship Account program started late, ran long and frayed the tempers of lawmakers as well as some members of the public speaking on the topic. House Bill 2853 would expand Arizona’s ESA program to all of the state’s 1.1 million schoolchildren, providing a taxpayer-funded voucher that parents can use for private school tuition, homeschooling or a variety of other educational purposes. It passed 6-3, with Republicans in support and Democrats opposed.

The Senate is expected to take up the voucher debate Friday. President Karen Fann announced the Senate would wrap up work Thursday night after doing a few final reads on bills. The $1 billion water legislation still needs work, and lawmakers are tired from Wednesday night’s (and Thursday morning’s) marathon session.

The House already had announced it was leaving and would return at 10 a.m. Friday.

HB 2853 passed the House onWednesday, also on a party line vote that was greeted with shouts of “shame, shame” from public-school supporters.

— Mary Jo Pitzl

8:35 p.m.: Big boost in housing funds

Facing an ongoing housing crisis, the Arizona Legislature’s bipartisan budget put more money toward affordable housing programs than had been allocated for years.

The budget moves $75 million to the Arizona Department of Housing, with the biggest chunk — $60 million into the Housing Trust Fund — to be distributed as grants for projects across the state. One-third of that total is earmarked for rural counties.

Another $4 million of the total will go to affordable housing programs on the Navajo and Hopi tribal nations, adding to a federal grant of $134.6 million announced by U.S. Sens. Kyrsten Sinema and Mark Kelly last month.

By comparison, the state deposited about $16 million in the Housing Trust Fund in the past three years.

Tomas Robles, co-executive director for the activist group LUCHA, compared the housing funding to the proposed $335 million to be spent on a border wall.

“This choice does not prioritize the needs of our most vulnerable communities,” Robles said.

Reps. César Chávez, D-Phoenix, and Steve Kaiser, R-Phoenix, who filed an unsuccessful bill earlier this year that would have put $89 million into the trust fund, both praised the new appropriation.

“With a historic investment into the Arizona Housing Trust Fund, we will be able to protect Arizonans facing hardships,” Chávez said.

Kaiser said he strongly supported the fund deposit. Kaiser also saw the passage of a bill he sponsored that forms a bipartisan committee to study the state’s housing shortage and look for ways to “mitigate its causes.”

The bill was passed as an emergency measure, allowing the committee to begin meeting immediately. It’s supposed to provide a report to the Senate by Jan. 1.

A Department of Housing study showed the state needs an estimated 250,000 new housing units to keep up with demand, the department’s director, Tom Simplot, said in an October op-ed.

The new budget also adds $5 million for an alternative homeless transition services program and another homeless services pilot grant of $10 million that requires participating cities and towns to pitch in 50% of the state’s funding for any project.

Separately, the budget provides another $10 million to the East Valley Institute of Technology to construct and furnish a 64-bed transitional housing facility for foster youths aged 17 to 21.

— Ray Stern

7 p.m. Rental tax bill fails in the Senate

The Arizona Senate failed to pass a bill that could have lessened the tax paid by people who rent homes and apartments in the state.

Senate Bill 1116 would have prohibited cities and towns from charging sales tax on landlords who rent property. The tax rate can vary by municipality. Its supporters said eliminating it would amount to a benefit for renters, who pay the tax passed on by landlords, and who face high rents due to demand as well as inflation drawing more from their budgets.

Opponents, who included a group of developers, said it would remove a financial incentive for municipalities to allow multifamily zoning that could ease the rental shortage in some cities.

#azleg will be bringing SB1116 up for a vote despite an agreement with @AzCities not to eliminate any local revenue streams for 5 years. That = $200M in cuts for cities even though every Republican legislator voted for this 2019 agreement. pic.twitter.com/V4iWLrWIb1 — Arizona League (@AzCities) June 22, 2022

The bill failed on a 15-11 vote in the Senate, with only Republicans in favor. The House passed the bill 33-25 Wednesday.

The 16th Republican vote in the Senate, Sen. Paul Boyer, R-Glendale, voted with Democrats against the bill, citing the cost to city revenues. A fiscal estimate on the bill said municipalities would lose more than $200 million in tax collections the first year it was fully implemented.

In Boyer’s district, that would have meant a $60 million cut to Phoenix’s revenues and $9 million cut in Glendale, the senator said, adding that money is necessary to fund public safety services at a time when shortages abound.

“They need more bodies, not less,” Boyer said.

— Stacey Barchenger

6:20 p.m.: Committees advance $1B in water spending

Arizona House and Senate natural resource committees advanced proposals Thursday afternoon that would empower the Water Infrastructure Finance Authority of Arizona to dole out $1 billion allocated over the next three years to shore up the state’s water supply.

The plan roughly follows a proposal that Gov. Doug Ducey made at the start of the session but uses the existing agency that handles federal grants and loans instead of creating a new water authority.

Most of the money would go to water augmentation and importation projects, such as seawater desalination in Mexico or water recycling. More than $200 million could go to conservation projects such as grants for drip irrigation installation on farms.

Federal officials last week warned that the seven states that share the Colorado River must produce a plan this summer to conserve roughly as much water as Arizona alone takes from the Colorado River — between 2 million and 4 million acre-feet — but a $1 billion investment will likely yield less.

A Mexican desalination plant that Arizona could support, in exchange for some of Mexico’s Colorado River water, would cost more than $2.5 billion and produce about 250,000 acre-feet a year.

The House committee voted 9-5 to send the legislation on for debate on the House floor, while the Senate committee approved it, 7-1.

— Brandon Loomis

4 p.m.: Fix for marijuana sales fails

Lawmakers killed a bill intended to resolve multiple issues involving Arizona’s marijuana dispensaries, including a testing requirement to ensure tainted products are not sold to the public.

House Bill 2050 went down on a 36-22 vote, four votes shy of the 40 needed to pass. It had previously won approval from the Senate, but House members, perhaps prodded by the dispensary lobby, declined to add their support.

Rep. Joanne Osborne, R-Goodyear, criticized the 11th-hour nature of the bill, which was done on a strike-everything amendment and had not been vetted in any committees, including the House health panel, which she chairs. Without that scrutiny, she said, it’s impossible to know if the bill will cause harm or fix problems.

The legislation was prompted after an Arizona Republic investigation found contaminated marijuana on dispensary shelves. The bill would have created a testing regimen, which Rep. Pamela Powers-Hannley, D-Tucson, called a common-sense protective measure for marijuana users, particularly those with medical ailments.

The bill also would have ironed out local zoning issues that could block the ability of holders of social-equity licenses to open shop.

— Mary Jo Pitzl

3:45 p.m.: After rest, lawmakers tackle final issues of session

With multiple references to sleep deprivation and eying the end of the session, lawmakers returned to the Capitol early Thursday afternoon to tackle a few remaining policy issues.

Committees in both the House and Senate are meeting to hammer out details of a bill that would determine how the budget’s $1 billion-plus investment in water can be spent, and who has authority to oversee that spending.

The Senate is also expected to consider a massive expansion to the state’s school voucher program before it adjourns.

But as can be the case in the Legislature as negotiations are ongoing, work is getting underway hours after it was scheduled, signaling another all-nighter in the making.

“Thank you for being patient today,” Rep. Gail Griffin, R-Hereford, told the committee she chairs, House Natural Resources, Energy and Water, as it began meeting at 3 p.m. “Lots of things happening, as you’re very much aware.”

— Stacey Barchenger

7 a.m.: Minutes after budget vote, Ducey shows support

Republican Gov. Doug Ducey applauded the first and only bipartisan budget of his tenure that caps his two terms in office.

“These investments demonstrate an unwavering commitment to do what the people of Arizona expect us to do: address today’s needs and prepare our state for the opportunities and challenges that lay ahead,” the governor said in a statement about 5:30 a.m. “This budget will truly leave Arizona better than we found it.”

The budget passed by lawmakers is billions more than the $14.2 billion Ducey proposed in spending in January and draws on an unexpected over $4 billion in surplus state revenues. It includes many of the governor’s priorities, including funding for water issues, border security, raises for state employees and a deposit into the rainy day fund, the state’s emergency bank account.

The state’s flush coffers reflect a vastly different financial reality than when Ducey became Arizona’s 23rd governor in 2015. The state had a projected $1 billion shortfall then.

As lawmakers ground through the budget slog until the sun rose on the state Capitol early Thursday, the governor was scheduled to be in Washington, D.C., with a group of about 250 high school students on a civics-focused trip sponsored by the Arizona Cardinals. He was expected to return to Arizona on Thursday. It is not yet known when he will sign the budget bills.

Ducey, who is term limited and cannot run again, leaves office in early 2023.

— Stacey Barchenger

PASSED Over the last eight years, Arizona has made responsible decisions to live within our means, reduce burdensome government regulations and increase trust in our citizens — and the result is a booming economy with record revenues. 1/ — Doug Ducey (@DougDucey) June 23, 2022

5:45 a.m.: Senate OKs budget; end of session looms

Senators cast the final budget vote at 5:25 a.m. on the 165th day of the Legislature but not before indulging in some self-congratulation for producing a bipartisan $18 billion spending package.

The deal came together late Wednesday and resulted in an overnight session that no one really saw coming earlier in the day. Staffers arrived not realizing their work day would bleed well into Thursday.

As the Senate closed out its budget work with a series of bipartisan budget votes, lawmakers commented on the unusual moment.

“I think this is what most Arizonans wanted us to do tonight – to come together, to vote on a bipartisan budget,” said Senate Minority Leader Rebecca Rios, D-Phoenix. “I hope this is a sign of what we can do in the future.”

Majority Leader Rick Gray, R-Sun City, said he had never really seen a bipartisan budget until today.

“It’s encouraging we have actually come together,” he said. Maybe, he added, there’s a lesson here: the value of compromise.

Ducey applauded the bipartisan work, although he only name-checked Republican leaders in a Twitter thread.

Not everyone was feeling warm and fuzzy about this kumbaya policy move.

Sen. Michelle Ugenti-Rita, R-Scottsdale, noted the nearly $5 billion increase in the budget from last year and said the across-the-aisle compromise cost too much.

“If there’s silver lining, though, it’s very reflective of everyone’s true colors,” she said. “At least the public will know who the conservatives are and who is not.”

She encouraged those who voted for the budget to campaign on their bipartisan move. And make sure you tell voters, she added, that the other side of the aisle will get half of everything.

— Mary Jo Pitzl

4:30 a.m.: House passes ‘historic’ budget bill

House Republicans and Democrats joined together for the first time in years to produce a bipartisan budget that boosts K-12 funding, pays off $1.5 billion in debt and provides long-awaited funding for a number of needs.

The House approved the last of 17 budget bills about 4 a.m.

The budget package is now being voted on by the Senate. if approved, it will head to Ducey for his signature or veto.

Republicans control the House by a single vote, and divisions within the GOP caused leaders to seek out Democrats’ votes to ensure the state would still be running past the budget deadline of June 30.

Several House members praised the budget’s passage as a significant achievement.

“Bipartisanship is alive,” Rep. César Chávez, D-Maryvale, said before voting for one of the bills.

After the last vote, House Majority Leader Rep. Ben Toma, R-Peoria, said he considered the bipartisan budget historic and that he couldn’t remember the last time Democrats and Republicans joined forces to produce a budget palatable to members of both parties.

The weeks of negotiations before the vote were sometimes hostile, sometimes collegial, and some GOP members wanted to leverage their own agendas until the last minute.

Democratic involvement made the rebellious Republican House members unnecessary in the end.

Toma noted that the budget included $1 billion in water infrastructure, another billion for roads and other infrastructure, $1.5 billion to pay down the state’s debt, and at the same time included the state’s biggest-yet expansion of a program that uses state money to subsidize private school tuition.

“It’s a big win,” he said.

Many of the votes passed with strong bipartisan majorities. It takes 31 votes to pass a House bill, and some “yes” vote tallies were in the 40s or low 50s. A bill that sets up a high-tech security system for schools passed 52-7, for instance, with one member not voting.

Some members disliked the budget, though, calling it “bloated.”

“It was the first time in its history that the a Republican majority has passed a Democratic budget,” said Rep. Jaqueline Parker, R-Mesa. “We spent $6 billion more this year than last year.”

Rep. Mitzi Epstein, D-Tempe, voted yes for the K-12 budget bill but insisted it was nothing like “historic.”

“It’s not a budget you can pass in the daylight,” she said. “We have $5 billion (in surplus funds) and oh, boy, we’ve put a little into education.”

But Marisol Garcia, vice president of the Arizona Education Association, said the bill shows that legislators have interest in “backfilling” the funding hole that has existed for more than a decade.

“It’s a better bill than we saw at the beginning of the day,” Garcia said, referring to the education bill that boosted K-12 funding. “It’s better than we saw last year.”

— Ray Stern

2:30 a.m. Bipartisan criminal-justice bill passes

The state House passed a criminal justice bill on a bipartisan vote that aims to improve investigations of police use-of-force incidents and allow women who give birth in jail to be released to a treatment center.

Sponsored by House Speaker Rusty Bowers, R-Mesa, the bill would create a new division within the state Department of Public Safety that would independently investigate use-of-force incidents by Arizona police agencies and law enforcement officers suspected of committing a crime. Police agencies would have to either use the new Major Incident Division investigators, another police agency or a regional police task force to investigate use-of-force incidents.

Democratic Leader Rep. Reginald Bolding, R-Phoenix, said before voting for the bill that it would be an important measure to build up more trust provide “healing” in the community.

The bill also creates an Anti-Human Trafficking Grant Fund that would “keep our children safe,” according to Rep. Walt Blackman, R-Snowflake. The fund would be administered by the Department of Emergency and Military Affairs, which would use the money for various state anti-trafficking programs.

A floor amendment by Rep. Regina Cobb, R-Kingman, added the provision about pregnant women in jail. The state corrections department would have to contract with a nonprofit organization and place up to 20 women in the program the first year, with up to 50 women per year placed in subsequent years. Children living at the center would be subject to separate security rules.

The bill was moved to the Senate.

— Ray Stern

12:50 a.m.: Democrats voting for budget

Arizona House Democrats announced that they had negotiated a deal with Republicans on a bipartisan budget featuring “significant new investment in K-12 public education and universities.”

Specifically, according to Democrats, they bargained away roughly $335 million for a border wall, which was to be presented in a separate bill, while picking up about $526 million of new money for K-12 funds — an 8.8% increase to permanent base funding. A provision that would have called for a tripling of tax credits for school tuition organizations was stripped out.

The budget also began the day with tens of millions of dollars for long-desired road projects on the Navajo Nation, which was likely put there to entice Democrats to vote for it, said Robbie Sherwood, Democratic spokesman in the House.

House Speaker Rusty Bowers, R-Mesa, said the bipartisan budget evolved when Republicans offered Democrats more K-12 spending, agreed to hold back on some Republican bills, and split out bills that Democrats that did not agree with so they could be voted on.

The House was still voting on budget bills at about 12:30 a.m., with some members estimating it could go on to the wee hours of the morning. The early bills were passing with overwhelming bipartisan support not seen for many years.

— Ray Stern and Mary Jo Pitzl

10:45 p.m.: Senate jets through work

The Senate has started its work on the 18-bill budget package. In another sign this is the real deal: Sen. Juan Mendez, D-Tempe, who was excused from in-person attendance all session due to COVID-19 concerns, is present, voting from his office.

The Senate is racing through part of its agenda, moving through bills with hardly no discussion or objection from anyone. That’s perhaps another signal that a bipartisan deal was already agreed to.

— Mary Jo Pitzl

10:05 p.m.: A real bipartisan moment?

Could it be? A budget with both Republican AND Democratic votes? Not since the days of former Democratic Gov. Janet Napolitano has Arizona seen a spending plan that could seriously take that label.

But as budget work is dragging out through the nighttime hours, there is increasing talk that the final product will get across the finish line with more than just a token Democrat voting “yes.” That also means we’re likely to see Republicans in the unusual position of voting “no.”

The proof will come in the votes — and no formal ones have happened as of yet. But with the smell of pizza wafting out of the House, and plates of Chinese takeout on Senate desks, indications are both the House and Senate will press on tonight, and for as long as it takes, to get a budget completed and on its way to Gov. Doug Ducey.

— Mary Jo Pitzl

7:45 p.m.: Lawmakers turn attention to a deal

A sure sign the Senate is getting serious about voting on a budget: Sen. Tyler Pace, R-Mesa, has returned from a business trip in Alaska. Pace left several weeks ago but promised to come back with one day’s notice when budget voting got serious.

His vote is important, as the Republicans can’t afford to lose even one of its 16 members or they would have to turn to Democrats for support. Sen. Michelle Ugenti-Rita, R-Scottsdale, has harshly criticized the budget as spending too much, especially on a list of 40-odd road projects.

— Mary Jo Pitzl

This article originally appeared on Arizona Republic: Arizona Legislature updates: Big bills on water, school vouchers on table for Friday