Arizona House passes budget, Senate looks to resolve impasse

PHOENIX (AP) - The Arizona House approved most of an $11.8 billion state budget overnight, putting pressure on the deadlocked Senate to resolve an impasse that has stalled progress for days.

The Senate was scheduled to meet Saturday as GOP leaders try to address the varied concerns of holdout Republicans or pick up support from Democrats.

House Republicans approved the budget package in party-line votes during a marathon session that ended shortly before 5 a.m. They also added last-minute provisions that angered Democrats, including a new requirement for the attorney general to forward to the governor and legislative leaders any complaints about alleged political influence in schools.

"This just seems like a way to threaten, harass teachers," said Democratic Rep. Kelli Butler, who said she worries teachers will face complaints just for wearing red following last year's "red for ed" protests for better wages and more school funding.

The attorney general is already charged with investigating complaints about the misuse of school resources for politics. Butler says automatically forwarding those complaints to the Legislature and governor is worrisome.

Secretary of State Katie Hobbs said on Twitter that the overnight changes would decimate her election services budget, "which is crucial for ensuring we have the infrastructure in place to keep our elections secure and fair." The budget directs her to use those dollars to administer next year's presidential primary.

Hobbs is a Democrat elected last year after decades of Republican control of the office.

Senate President Karen Fann remained optimistic for a breakthrough despite the GOP infighting that showed no signs of easing Friday night.

"We are hoping that you all will be back promptly at 10, and by then maybe we can start voting on some budget bills if at all possible," Fann told lawmakers as she dismissed them Friday night.

But at least three GOP senators remained opposed, and holdout Sen. Paul Boyer said no deal was in sight.

The holdouts sparked anger among GOP House members that were caught on an open microphone during a closed evening caucus meeting. Reps. Ben Toma and Kelly Townsend threatened to retaliate against two GOP senators who do not support the budget, with Toma saying he would not hear bills by Boyer or Sen. Heather Carter in the next session. They also discussed an ethics inquiry.

Carter and Boyer are demanding changes to laws that limit lawsuits by child sex assault victims. Carter also objects to the lack of funding for several of her key priorities that received broad support earlier but are not included in the final budget deal.

Boyer has vowed not to vote for the budget until his child sex assault bill passes. He pushed back on the idea of an ethics inquiry pegged to his move to block the budget until his demands are met.

"I think they need to re-read the code of ethics," Boyer said Friday. "If we're going to say there's something unethical about holding up a budget vote because of children who have been sexually assaulted and trying to expose child predators, then I have a different code of ethics than some of my colleagues over in the House."

The most contentious part of the budget is a plan to cut $325 million in taxes to offset higher revenue the state anticipates from changes in federal law and from collecting more taxes on online sales.

Democrats said the GOP plan sets up a fiscal cliff in the mid-2020s when the federal tax changes expire, but the corresponding state tax cuts do not. Around the same time, Proposition 123 - a 10-year year school-funding plan approved by voters - expires.

"We are setting ourselves up for a fiscally irresponsible, fiscally dangerous situation," Democratic Rep. Randy Friese said.

Republicans objected to calling the changes a tax cut, saying taxes would increase without the changes they advocate. Their plan would lower tax rates, eliminate a tax bracket and raise the standard deduction to lower all voters' taxable income.

"No matter how many times it's said that this is a tax cut, doesn't make it so," said Rep. Ben Toma, a Republican who helped craft the plan. "This is an offset of what would otherwise be a tax increase."

Democrats tried repeatedly to get their priorities added to the budget but were rebuffed in party-line votes. Their proposals included boosting the pot of money school districts use for things like textbooks and desks; boosted school salaries; funded full-day kindergarten programs; provided paid leave to state employees who have a child or adopt one and increased child-care assistance.