Vetoes, pork and a transportation compromise: What got done at Arizona Capitol this year

This year's legislative session will be remembered for a lot of superlatives: The longest session in state history at 204 days. The most vetoes by a governor in a single session: 143. And $2 billion worth of pork projects.

When it comes to policy, superlatives are harder to identify. Aside from bipartisan deals on the state budget and a transportation tax, other big wins were lacking.

From water to housing to education, GOP lawmakers and Democratic Gov. Katie Hobbs fought to a draw. Many Republican bills passed only to be dispatched with Hobbs' veto stamp, while Democratic priorities were sidelined by the GOP majority.

“It was as entertaining as a Hollywood script, but the session did not have a lot of accomplishments," lobbyist Scott Smith said.

Smith, like others interviewed for this story, cited the budget and the transportation tax as major accomplishments. He was deeply involved in pushing for approval of the transportation measure, nicknamed Proposition 400, which allows Maricopa County to call an election next year on whether to extend a half-cent sales tax for roads, highways and transit.

Smith cited the repeal of the rental tax, which was part of the transportation deal, as well as a $150 million investment in the state's Housing Trust Fund, as other measures with widespread impact.

But the session will likely be remembered for Hobbs' record-shattering veto count, as the GOP-led Legislature, long used to one-party rule, adjusted to a Democrat in the governor's seat.

It is also remarkable for its record-setting duration, nearly eight months, punctuated by numerous "breaks" as Hobbs, Senate President Warren Petersen and House Speaker Ben Toma — all new to their posts — sorted out how to work with each other and with their caucuses.

In between, there was the drama of the expulsion of a Republican House member, the censure of a Democratic lawmaker, the hard-line stance of the right-wing Freedom Caucus and the grilling of the handful of Hobbs' cabinet nominees who actually got a hearing.

Opinions are mixed over whether the next session will be much different, given 2024 is an election year in which every legislative seat, not to mention the U.S. presidency, will be on the ballot. Hobbs has pledged to put at least $500,000 behind an effort to elect more Democrats to the Legislature, which could sour relations after finding harmony this year.

"We can work together on important issues for Arizonans when we can put the partisan politics aside," the governor said Friday. "And I'm really optimistic moving forward that we've set the groundwork to continue doing that. I'm sure there will still be really big partisan disagreements, but I'm more than optimistic going into the next session."

Wins, losses for a new Democratic governor

The session started with frequent public sparring between Hobbs and the GOP leaders in the Legislature as they grappled with political division not seen in Arizona in 14 years. Hobbs bragged about her veto stamp, which she readily used on bills that would have limited transgender rights or revamped how Arizonans vote.

She tallied 143 vetoes to 204 bills signed into law, busting the single-year veto record of 58 set in 2005.

Those vetoes were "manna from heaven" that shored up Hobbs' base and signaled a governor with backbone, said Dennis Burke, former co-chief of staff to Arizona's last Democratic governor and former veto record holder, Janet Napolitano.

Hobbs showed a sense of pragmatism Burke also saw in Napolitano, he said.

Hobbs "got a budget done with a belligerent legislature and (ended the session) with a critically important transportation bill that will go to the voters," Burke said. "I think she's got to be really pleased."

Hobbs found herself at odds with members of her own party over the veto of a bill that would have legalized the sale of more homemade foods, including tamales, and her budget compromise, which some progressives said resembled a Republican spending plan.

Freshman Rep. Cesar Aguilar, D-Phoenix, criticized the governor for not communicating better with Democratic lawmakers and caving to GOP leaders, including Petersen.

"I think she should have set a tone that she's a fighter ... and at the end of the day, the buck stops with her," Aguilar said about budget negotiations. "It kind of felt like the one who was controlling the narrative was Petersen. We were caving into what he wanted."

No change on universal school vouchers

The governor won money for housing and school repairs but gave up on her pledge to rein in the state's ballooning Empowerment Scholarship Account program, better known as universal school vouchers. Republicans have vowed to fight any attempt to roll back the program.

“Protecting ESAs is a huge win for Republicans and certainly a loss for the governor," Smith said.

Republicans also scored points on the state budget by insisting that any increase in state-agency funding come from one-time money, rather than making permanent increases.

Instead, Hobbs agreed to a GOP plan to divvy up the state's $2 billion surplus for lawmakers' pet projects — a tactic to get their votes on the $17.8 billion state budget. Democrats complained the ploy deprived key government programs of budget increases to the benefit of special interests such as the Prescott rodeo, a Fountain Hills observatory being built by a nonprofit group and the Turf Paradise racetrack.

But with a budget deal approved in early May, eight weeks before the June 30 deadline, Hobbs, Toma and Petersen all claimed a win, touting a bipartisan accord.

The budget also headed off what has become an annual drama over school funding. Lawmakers agreed to waive the spending limit for schools in the current year, sparing the prospect of education cuts in toward the end of the school year.

Keep reading: Head of Arizona school voucher program resigns as Hobbs memo stirs debate on costs

Confirmations of department heads stall

The budget and vetoes are "a winning platform for any Democratic governor," said Democratic consultant and former lawmaker Chris Herstam.

Insiders have criticized Hobbs for not using the leverage of the Governor's Office to get more of her cabinet nominees through the Senate confirmation process, a political fight that "should have been waged and won before any budget compromise took place," Herstam said. Just six of two dozen nominees have been confirmed.

The session finale came in late July, distanced from the bulk of lawmakers' work by a seven-week break: A deal on the transportation tax, called Proposition 400, that drew bipartisan support but angry protests from Freedom Caucus members, who wanted a separate vote on the bill's light-rail components.

Hobbs signed a repeal of the rental tax, a bill much like one she had previously vetoed earlier. It was a compromise to get Proposition 400 passed.

On that deal, she ended the session on the same side as Toma and Petersen, which all three hailed as a bipartisan win.

Cooler heads, and spirit of compromise, prevail

Petersen said he and Hobbs ultimately recognized the political split at the Capitol, and the reality that neither could accomplish partisan aims without compromise.

"Ideologically, we're diametrically opposed," Petersen said after the Legislature adjourned sine die. "However, I feel like we have an open line of communication.

"We've been able to recognize what we have, and what we have to get done," he said. "And I feel like we've done well up to this point. I feel like we've had some good bipartisan solutions that we've been able to accomplish this year."

Toma had a similar assessment, saying the session is proof that cooler heads prevail when it comes to resolving divisive issues. Those cooler heads led to "honest conversations and honest negotiations," he said.

"So far, people have kept their word, and that to me is important and that is a good omen, a good indicator of possible success next session," Toma said.

2024: More of the same?

Not every outlook is as sunny.

Political consultant and lobbyist Stan Barnes predicts storm clouds for next year, building off the fissures of this year.

"It will be long and equally as acrimonious, maybe even more so,” he said.

National politics will color many issues, what with Arizona being a presidential swing state and a potential three-way race for the U.S. Senate seat held by Kyrsten Sinema playing out as lawmakers do their work, he said.

“All of that will be the fog that the governor and the Legislature will have to work in," Barnes said.

Smith agreed the overlay of the 2024 elections might make for bumpy relations. But, he said, the "Big Three" — meaning Hobbs, Petersen and Toma — know each other now and that should help avoid some of this year's conflicts and vetoes.

Lobbyist Stuart Goodman foresees fewer vetoes. Many of the bills Hobbs rejected were "statement bills" intended more to make a partisan point rather than to win buy-in from a Democratic governor.

"What’s the sense in doing that over?" Goodman said of a veto repeat.

Plus, there's a track record from this year that underscores the need for compromise among Hobbs and legislative leaders, he said.

"They did demonstrate, out of necessity, that they can sit down and put differences aside and find solutions that matter," Goodman said. "I’m hoping that translates into a less raucous session."

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

Reach reporter Stacey Barchenger at stacey.barchenger@arizonarepublic.com or 480-416-5669. Follow her on Twitter @sbarchenger.

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This article originally appeared on Arizona Republic: Arizona 2023 legislative wrap: Vetoes, pork and a transportation deal