A conversation with Gov. Katie Hobbs on heat, bipartisan wins and more
The first year of divided government in more than a decade in Arizona has been an interesting one. State lawmakers convened in January, and ended up with the longest session in Arizona history. Along the way, there were bipartisan deals, and partisan bickering.
The Show sat down with Gov. Katie Hobbs late last week to talk about that, and to look ahead to next year. The conversation began with the heat emergency she declared earlier this month, after July set heat records here and around the world.
Hobbs has faced some criticism for the timing of the emergency declaration and she talked about why she declared when she did and more.
MARK BRODIE: Let me start with the heat emergency declaration that you issued not that long ago. I’m curious about the timing of it, because obviously you’ve been getting calls to do this for quite some time. So why did you choose the time that you did?
KATIE HOBBS: Well, I think people talk about the timing — it’s not understanding what the heat emergency declaration actually does. Any weather declaration is retroactive, and it's so that costs that were incurred as a result of that weather event can be reimbursed. And so we’ve been looking at this as a tool. Looking at the specifics in terms of what would constitute declaring an emergency, there’s very specific criteria with the National Weather Service. So we did it when it made the most sense. And we’ll continue to look at, retroactively, if we need to do it again for a different time period.
But in addition to the emergency declaration, we issued an executive order that’s more forward looking. And in all of this, we’ve been working very closely with local jurisdictions, helping support and augment their heat responses.
BRODIE: So you mentioned the executive order. I’m curious what you would like to see happen. Like, what are some of the things that for you should be on the table in terms of trying to deal with this going forward?
HOBBS: Well, I think really broadly working with our utilities — and we have a roundtable scheduled this week to talk with them about their responses, how they’re helping customers who have additional challenges because of this emergency and maybe not able to afford things — making sure the grid is is solid and that we’re planning for those contingencies. But in the long term, really a lot more coordination between the state and local jurisdictions who have really borne the burden of dealing with these weather situations. I think we’re going to see them more and more as the new normal, and we want to have a more solid plan in place moving forward.
BRODIE: Do you see that as more of a financial kind of thing in terms of maybe helping cities pay for the things they need? Could the state maybe get more into operating cooling centers or that kind of thing?
HOBBS: Yes, and that was part of the emergency declaration as opening a couple of additional cooling spots near the Capitol where we’ve seen a lot of heat related activity with unhoused individuals. So it is helping jurisdictions with their costs, but also folks who are in homes that need weatherization or energy efficiency. We’re getting a lot of federal resources in that we can help make sure it gets to the right individuals and communities, and we want to make sure that we’re coordinating on that.
BRODIE: Would you say that what you’re looking at is short-term, medium-term, long-term kind of things? Because a lot of these items sort of fit into one of those categories.
HOBBS: It’s really all of the above. As I said, we’re going to start seeing this kind of extreme heat more prolonged and more frequently. And so we need to be ready to address it.
BRODIE: Let me ask you about one of the last things that happened during the legislative session, which was the approval of Proposition 400, the extension of the Maricopa County sales tax. Along with it, you signed a bill that would do away in a couple of years with the residential rental tax. How important for you was getting something on Prop. 400 done that the cities, that MAG was interested in having?
HOBBS: It was a huge priority going into this session. This allows MAG to continue to implement their transportation plan, which is not only important for Maricopa County and for transportation, but it’s important for the entire state. This will keep the more rural communities from having to compete with Maricopa County for these transportation dollars. It’s investing in infrastructure that’s going to continue the economic growth of the region and ensure that these companies that are growing here are going to be able to have a workforce that can reliably get to work, that their supply chain can get to them. So it's really critical. This is going to create hundreds of thousands of jobs over the life of the extension.
So it was a huge priority. Obviously, we had to make concessions. It’s not perfect. Not everyone got everything they wanted. But at the end the day, it’s a great deal for Maricopa County and for Arizona.
BRODIE: Do you consider the residential rental tax bill one of those concessions?
HOBBS: Absolutely. Again, not everyone got everything they wanted, but I think at the end of the day, people recognize they were going to have to give up some things. And this this tax is an important revenue source for cities. So while it’s great that renters are going to get this kind of relief, we’re going to work with the cities to try to see what we can do to replace that revenue.
BRODIE: What might some of those options look like, and what might some of the options look like that Republicans in the Legislature would go along with?
HOBBS: Well, that’s the question of the day, right? This legislative session was certainly unpredictable. I think next year, in an election year, it might be even more so. And we don’t know what revenue is going to look like. And so it's going to be challenging, as will all of the other priorities we have going in.
BRODIE: Do you think there’s anything that you can do sort of on the executive branch level that might be able to get some money to cities that the Legislature wouldn’t have to be involved in?
HOBBS: We would certainly look for those opportunities if there was a specific tranche of federal funding that was appropriate. We’re certainly looking at the options we have available.
BRODIE: So you mentioned the fiscal situation is a little bit unpredictable right now. Your office not that long ago put out a memo about that related specifically to the universal ESA school voucher program, saying that essentially the state is potentially looking at a [roughly $300 million] budget shortfall. Are we looking at potential budget cuts next year?
HOBBS: You know, I don’t want to go that far and get that far ahead of ourselves, but I think that the key piece of this is the unaccountable, unsustainable universal voucher program and the growth that’s happening with that. It’s far outpaced the the original projections from the majority who supported its implementation and is in line with what the opponents have been saying from Day 1: that it’s going to grow to this out-of-control program that’s going to bust the budget.
And whether or not you support public tax dollars going to pay for private school, this is not something that’s just going to affect dollars going to public education. It is going to affect all other areas of the budget if it continues to grow at its current pace.
BRODIE: So you came into office and in your first budget calling for basically the scaling back, the rolling back of this universal program. Republicans in the Legislature, perhaps not surprisingly, were not so thrilled with that idea. Are there things that you’re looking at for next year that maybe don’t roll it back, but maybe scale it back somewhat or something to maybe help with the budget situation?
HOBBS: I think that we have to find a way to compromise on this. And Republicans in the budget process were not willing to have it on the table at all. It is more and more clear that their projections are just completely inaccurate and that they’re going to have to face the reality of the situation we’re in. We’re going to have to compromise. That might look like putting a cap on the number of vouchers. It might look like putting an income cap. But we have to find a solution to rein in this unsustainable program.
BRODIE: Do you have reason to believe that Republicans will change their tune on that and go along with those things that they’ve said no to before?
HOBBS: Well, they've continued to say, mistakenly, that this is a program that actually saves tax dollars. That’s not the case. And we have a lot more solid numbers coming from every independent financial analyst that has looked at this program, pretty much in agreement that it’s growing unsustainably. And so, I think going into next session we have a lot more concrete information about that. And so if they continue to say, “no, this is saving money,” they’re just just wrong, and there’s more and more evidence to prove that.
BRODIE: One of the other issues that was a big one earlier this year at the Capitol was housing. And of course there were several attempts at doing something about trying to increase the supply of housing, not just in the Valley, but around the state. And those were ultimately unsuccessful. Are you optimistic that something might be able to happen next year?
HOBBS: I think housing is an area that we can find common ground and bipartisan compromise. There are some common-sense regulatory reforms that I think we’re going to have to work with local jurisdictions on implementing that will allow us to create more housing more quickly. And that’s really the issue. It’s a supply problem. We have invested significant amounts into affordable housing, but it’s going to take a while to get all of that built. And so I think this is definitely an area that there is room for a compromise.
BRODIE: It seemed that this year on the proposal that ultimately got the buy-in from at least some of the cities, that it was bipartisan support but also bipartisan opposition to that bill at the end. How do you try to overcome that, given that the negotiators were able to get something that at least some of them on both sides could live with and the cities could live with?
HOBBS: Yeah, I certainly think that just because the legislative session ended doesn’t mean that those discussions ended, and there’s certainly a lot of stakeholder meetings happening around the state on this and many other issues. And so hopefully those things can continue to be hammered out during the interim so that we come into next session with something ready to go.
BRODIE: We heard recently that water cuts to Arizona will maybe not be as bad as we had originally thought because of the wet winter we had. Of course, as we all know, one wet winter does not make up for many, many years of drought. Water was — other than the Rio Verde situation — was not a huge topic of discussion or at least action this year at the Capitol. Would you expect that to be different next year?
HOBBS: Absolutely. One of the things we stood up very early in my term was the Water Policy Council that is right now meeting and and talking about proposals, the things we need to address to manage our rural groundwater to address the assured water supply program. And so I know that there’s legislative policies, proposals being discussed there. And there’s other action we could take that would help some of those rural communities that want to have control over their own groundwater management. And so we’re looking at all of those. I’m hopeful that there will be some bipartisan legislative solutions introduced in the next session. I think there is wide agreement that we can’t keep doing the same thing that we've been doing.
BRODIE: Are you generally supportive of increasing the number of active management areas in the state?
HOBBS: Yes, I think I’m supportive of those communities that want that control over their groundwater, which is really about control over their future as communities to be able to have that flexibility. And there are a lot of tools we could implement — whether that's legislatively or through executive. But we’re going to work with the local communities to help address their needs in this area.
BRODIE: I want to ask you also about some of your agency director nominees, most of whom were not approved by the state Senate. What are you looking at in terms of trying to get some of these folks into their positions? Because, as you know, they have one year from the time that they were appointed, if they don’t get Senate confirmation, to serve in that office.
HOBBS: Yeah. So I think I want to just start this off by saying that what has been put in place in terms of director confirmations is unprecedented. And the director of the nominating committee continues to move the goalposts about what’s acceptable or not. And they’re really using this committee as a tool to vet their own really partisan political agenda. And it’s hurting Arizonans. Arizonans should have an expectation that government can function and that they can get the services they need. And this is creating an air of uncertainty.
We have directors who uprooted their families and moved to Arizona. But I will say that they are in their roles. They are working. Government is functioning. And we’re going to continue to support them to do that. And if it looks like the process is going to continue to be broken the way it is, we’re going to look at the options we have to keep those directors in place and make sure there’s continuity in the agencies.
BRODIE: Do you think there will be any action on any of those nominees between now and January when the Legislature comes back?
HOBBS: I think that Sen. (Jake) Hoffman has the ability to continue to hold the committee hearings during the interim. I don’t know if he’ll choose to do that. There was an intent to do some of those hearings during the break that they took, and that didn't happen. So I’m not sure what his plan is. And again, as I said, he continues to move the goalposts. And that’s incredibly frustrating, but we’re going to keep doing the work that we’re there to do.
BRODIE: You mentioned how sort of unpredictable this last legislative session was. I think for most people, observers and those involved in it. I’m curious — you obviously have experience in the legislature with statewide elected office — how did this year go relative to how you thought it would be? And what maybe did you learn from it and take away from it that you’ll use going forward?
HOBBS: Yeah, well every Legislature is different, and anyone who has served any time in the Legislature could tell you that. So I knew that going in. I knew that this Legislature was, even though it’s the most closely divided in numbers we’ve had in a while, it's really the most ideologically divided. And that those would be challenges. And I think any governor in their first term has issues not just in Arizona, but just the on ramp to get your agenda to the Legislature is so short. Between the election and the start of the legislative session. Freshmen legislators come in and have the same sort of of barrier. There are certainly valid criticisms of us during the session. We’re taking those criticisms and learning from them and really spending the interim working with both parties. And as much as we can get on the same page with our priorities going into the next session.
BRODIE: After having gone through a full session now, I’m curious how you would describe your relationship with Senate President Warren Peterson and House Speaker Ben Toma.
HOBBS: You know, I think that folks were surprised that we sat down and hammered out this bipartisan budget that was able to get supermajority support in both chambers. And I have had conversations with both of them that — you know, we did what people didn’t think we could do both on the budget and Prop. 400. So there are things that we widely disagree on in terms of issues, but I think there’s a good working relationship in place, and we’re working every day on improving the relationship with the legislative Democrats as well.
BRODIE: All right. We’ll have to leave it there. That is Arizona Gov. Katie Hobbs. Governor Hobbs, thanks a lot for coming in.
HOBBS: I appreciate it. Thank you.