Scottsdale Residents Get Closer to Budget Certainty as Arizona Senate President Says Deal Is 99% Done

Arizona Senate President Warren Petersen said Wednesday that negotiations between the Republican-led Legislature and Democratic Gov. Katie Hobbs are essentially complete on the state budget that will fund services for Scottsdale and the rest of Arizona for the coming fiscal year.

"There's about 500 line items that we go through, and as we finally reach a consensus we will gray those line items out. I would say we're pretty much 99% of the way there," Petersen told KTAR News 92.3 FM. "The last 1% can be the hardest."

The budget must be approved before July 1 to avoid a state government shutdown. Scottsdale residents depend on state funding for schools, public safety, infrastructure, and social services.

What Scottsdale taxpayers need to know

Several key details emerged from Petersen's comments that affect households across Scottsdale and Maricopa County.

Tax changes will not require refiling. Petersen confirmed that any tax code changes in the final budget will not apply to returns already filed this year. Taxpayers will not need to refile, he said.

"That was one of the parts where we … put a line in the sand and we said we would absolutely not budge on … tax conformity for this year, which means you do not have to refile your taxes," Petersen said.

Proposition 123 appears resolved. One of Hobbs' top priorities has been renewing Proposition 123, the education funding measure voters approved in 2016 that expired last year. Petersen said the two sides have reached a solution on Prop 123 but declined to share the details.

"We've reached a solution on that issue," Petersen said, without explaining what the agreement entails.

Some Republican lawmakers have opposed including Prop 123 proceeds in the budget because there is no guarantee voters will approve the ballot measure in November.

How the standoff unfolded

Republican lawmakers passed a $17.9 billion budget in May without Democratic support. Hobbs vetoed the package, calling it "unbalanced and reckless" according to 12News. Her own proposal totaled approximately $18.7 billion and prioritized education funding and reforms to the state's Empowerment Scholarship Account voucher program.

For weeks, the two sides traded public criticism. That tone has shifted behind closed doors.

"I'm not going to get into the details of negotiations," Hobbs said this week. "I put out my budget in January. We always knew there would be a compromise to get to a budget that would pass."

Senate Majority Leader John Kavanagh, one of the Legislature's chief budget negotiators, told 12News the talks have been going "smoothly" but declined to discuss specifics.

What comes next

Petersen said he could not predict exactly when a final deal will be reached. He noted that the Legislature and governor have developed a system over the last four years for resolving line-item disputes.

"The solution can't be too left and it can't be too far right, and that's the sweet spot and that's where we land on consensus," Petersen said.

Hobbs told ABC15 she remained "confident" a bipartisan deal would be finalized.

Scottsdale families and businesses will have to wait for the final numbers. But with Petersen signaling the deal is nearly done, the uncertainty that has hung over state funding for months appears to be ending.

By Marcus Whitfield, Arizona State News