Legislature passes $17.8B budget for Arizona, the first spending plan under Gov. Hobbs

State lawmakers approved a $17.8 billion budget Wednesday on strong bipartisan votes that will provide tax rebates to families, fund millions of dollars of road projects, increase K-12 education funding and create a new state park.

The lopsided approval, with more than two-thirds of the lawmakers on board, overshadowed Democratic discontent with the plan that fellow Democrat Gov. Katie Hobbs negotiated with Republican legislative leaders.

The votes give Hobbs a big win in her first budget foray even as she faced criticism from her own party, whose members felt she didn't fight strongly enough for some Democratic priorities. Of particular concern was lack of action on the state's rapidly growing private school voucher program, which Hobbs in January vowed to roll back.

In a concession to those concerns, House Speaker Ben Toma, R-Glendale, along with the minority leader, Rep. Andrés Cano, D-Tucson, announced the creation of a committee to examine the best way to provide oversight of the Empowerment Scholarship Account program. The Senate was invited to join but declined.

Hobbs praised the votes after the House concluded work mid-afternoon Wednesday.

What's in Arizona's state budget? Money for families, education, housing, water and more

“I’m glad the House passed the bipartisan budget and I look forward to signing it into law," she said in a statement. "Not everybody got what they wanted, but I’m thankful legislative leaders were able to set aside their differences, compromise, and support a bipartisan deal that makes historic investments in affordable housing, builds roads, bridges, and public transit, expands access to health insurance for Arizona’s children and creates critical new ESA accountability measures."

GOP leaders also celebrated the budget, which won the votes of the unified Republican caucuses.

“25 ayes, 5 nays – bipartisan,” Senate President Warren Petersen, R-Gilbert, said as the vote on the main budget bill in that chamber concluded around 4:30 a.m. Wednesday before going to the House. “Whoo! That sounds like a success to me.”

Lawmakers got millions to spend, securing votes

The budget framework is what apparently led to its success, but not without fueling discontent.

To garner support, leaders offered lawmakers a slice of the state's estimated $2.5 billion budget surplus, amounting to $20 million to $30 million per Republican member, with a lesser amount for Democrats.

Those dollars are why the budget bulged with 50 transportation projects, as well as 26 local projects. They represent the wishes of individual lawmakers, who say it allowed them to address needs in their districts.

"This is the first time I’ve been able to list the critically needed things that my poor district needs," state Sen. Wendy Rogers, R-Flagstaff said.

But it also sparked complaints of political pork, as many of the transportation projects supersede the long-term planning the Arizona Department of Transportation does.

Thrown out: Arizona Sen. Wendy Rogers' restraining order against reporter dismissed by Flagstaff judge

Rep. Athena Salman, D-Tempe, lamented that while the budget deal found $15.5 million to pay for improvements to the rodeo grounds in Prescott, there wasn't room for another $5 million that would have further expanded the reach of the state's children's health care program, called KidsCare.

Rep. Amish Shah, D-Phoenix, voted against the budget package, faulting its framework.

“I'm very disappointed by the process," he said. By catering to smaller-dollar concerns, the budget did nothing to address the big pressing issues, such as teacher retention and reining in the voucher program, he said.

That echoed a common complaint from Democrats, many of whom swallowed their objections and voted yes for the budget.

Mitzi Epstein, the Democratic leader in the House, said Democrats were told Tuesday that if they didn’t vote for the budget, the $426 million in funding that Senate Democrats were able to direct to favored causes would be rescinded and redirected to GOP priorities.

Asked if she felt forced to vote for the spending plan, she replied, “Pretty much.”

However, the budget has a lot of “great things” in it, said Epstein, D-Tempe. It includes money for homeless services, a $150 million infusion into the Housing Trust Fund and a nearly 7% boost in K-12 funding for the coming year.

A late amendment to the budget directed the state's Housing Department to use some of the money from the Housing Trust Fund to establish a campus that would provide temporary housing and services to address Arizona's ongoing crisis with the unsheltered population.

What's left for Legislature this year

With the budget passed, the House and Senate leaders have indicated they're probably a few weeks away from final adjournment. The House will take a break until Monday. The Senate returns Thursday.

Yet to be addressed is whether to grant Maricopa County permission to hold a transportation election and a revived effort to repeal rental taxes, a key GOP priority.

Lawmakers also say they will reverse a bill that on Tuesday put the state's Medicaid agency, AHCCCS, on a track to expire as of July 1.

The Senate Appropriations Committee killed Senate Bill 1736, which would have continued the agency until 2029. Also included in the bill were provisions to extend the Board of Dental Examiners and the Board of Massage Therapy for two years, with six-year extensions for the Naturopathic Physicians Medical Board and the Optometry Board. Those extensions also failed on the tie vote. Bills don't pass if there is a tie.

Read our blog: New state budget approved, will go to Gov. Hobbs for signature

Reach the reporter at maryjo.pitzl@arizonarepublic.com or at 602-228-7566 and follow her on Twitter @maryjpitzl.

Arizona Republic reporters Ray Stern and Stacey Barchenger contributed to this article.

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This article originally appeared on Arizona Republic: Arizona Legislature passes $17.8 billion budget on big bipartisan vote