Tucked here and there among the $12.8 billion budget package signed into law last week by Gov. Doug Ducey are numerous water-related funding opportunities for rural counties across Arizona.
Among the budget items in SB1823, the general appropriations bill, are allocations of $3 million for water project assistance grants to cities and towns that provide water in Navajo and Apache counties. Another $2 million of water project assistance grants are available to irrigation districts in Cochise and Graham counties.
Those funds are in addition to $160 million moved from the state’s general fund on June 30 to the Drought Mitigation Revolving Fund. Of that, up to $10 million may be used for grants which facilitate the forbearance of water deliveries by June 30, 2025, while another $10 million may be used for Arizona State Land Department grants related to water use.
Ducey also signed into law changes to Arizona’s tax code which allow water utilities regulated by the Arizona Corporation Commission (ACC) to deduct contributions toward construction from their Arizona gross annual income. This can be particularly beneficial for companies which serve smaller communities where it can be difficult to spread out the cost of construction projects.
In addition, the Legislature passed a bill sponsored by Rep. Gail Griffin (R-LD14) to provide $40 million for the Water Supply Development Fund for assistance to water providers for improvements to water infrastructure and projects located in rural communities.
The ACC is encouraging owners and operators of small water utility companies which are regulated by the Commission to take advantage of the funding, which can go as high as $1 million per project, to improve their water systems and benefit customers. There is also an option of a $100,000 grant which does not require repayment.
Eligible water utility companies must serve at least 15 customers or at least 25 people for at least 60 days of the year, be located outside of an active management area, and be within a county with a population of less than 1.5 million people. The funding can be used for myriad purposes, including acquiring water or water rights; purchasing or refinancing debt related to water supply development projects; conveying, storing, or recovering water; reclaiming or reusing water; capturing or controlling stormwater; and replenishing groundwater.
Utilities can apply for the WSD Fund loans or grants to the Arizona Water Finance Authority.
“I encourage every regulated water utility that qualifies for these funds to take advantage of them as expediently as possible for the benefit of their customers,” ACC chair Lea Marquez Peterson said last week.
House Speaker Rusty Bowers (R-LD25) acknowledged the importance of the water funding allocations in a post-budget signing statement, calling the funding for infrastructure projects a “key to securing Arizona’s future, and one of our highest priorities.”
In a decision seen by some as desperation and others as a brilliant strategic move, House Speaker Rusty Bowers has ordered his 59 fellow Representatives back to work Monday to take up 11 stalled budget bills.
Whether Bowers and other House leaders can pull together 31 votes -the same number of the Republican House caucus- is unclear, but House Majority Leader Ben Toma believes it is time for members to put up or shut up.
Amendments are expected to be proposed for all the bills but there is no guarantee any bill will receive the requisite 31 votes for passage. But Toma said last week taking the bills to the floor will force each representative to go on the record with a vote, something that could come back to haunt some lawmakers if the state government is shut down due to no new budget.
Toma spent months on the budget team before the budget bills were put forth last month with the blessing of Gov. Doug Ducey. He said it is a “constitutional duty” for representatives to vote on the bills, but for those who believe what is on the table is “not good enough, they’re going to need to explain why it’s not good enough, to their constituents and pretty much everyone else.”
Among the issues is how much of the more than $1 billion surplus to spend now, how much to turn toward the State’s debt, and how much to give back to taxpayers via tax cuts. There is also disagreement over how to phase in a flat rate income tax that is expected to result in a 10 to 12 percent drop in state revenues.
Much of the opposition to the tax cuts and flat rate tax plan are based on complaints about the expected affects due to the state’s shared revenue agreement with cities and towns. If less revenue is coming into the state, then less revenue will be received by municipalities, unless the shared revenue agreement is amended.
Last week Speaker Pro Tempore Travis Grantham said it was time to look beyond who was at fault with the original budget plan that did not have better support. Instead, he said it was time to work on finding a consensus to get a budget passed so the legislature can adjourn.
But for that to happen, Grantham says some lawmakers need to realize the surplus “is the people’s money, it’s not the government’s money” and move forward with approving tax cuts.
“The issue we’re having is there is so much money in the pot and there is so many people with so many wants and so many needs we’re having trouble staying focused on the finish line,” he said. “We just need to focus on the budget, we need to focus on cutting taxes, and we need to focus on getting out of there.”
There is also the issue of 22 bills, all Republican supported and some with unanimous bipartisan support, which Ducey vetoed out of frustration with the progress being made on the budget bills. Some legislators are insisting that there needs to be assurance that those bills will all be reintroduced and signed by Ducey before they will vote for the budget.
The Senate is currently set to come back June 10, although Senate President Karen Fann could call everyone back on 24-hours. Like the House, Fann has a handful of budget-objectors in the Republican caucus whose votes are necessary for passage of the budget bills.
On Monday, the Arizona House passed Senate Concurrent Resolution 1044. The resolution allows voters to decide if students who are in the country illegally but have attended for two years and graduated from an Arizona high school can be eligible for in-state college tuition.
SCR 1044 also exempts post-secondary education from the definition of a state or public benefit. Currently, Arizona residents who do not have legal immigration status do not qualify to receive those benefits.
Last week, Republican State Reps. Michelle Udall and Joel John forced a vote on the resolution by joining all House Democrats. Republicans Rep. David Cook and Rep. Joanne Osborne joined the group later and voted in favor of the matter. The move shifted power away from the Republican Caucus momentarily, but left a deep division.
Speaker Rusty Bowers expressed his disappointment in the tactic employed by Udall and John before casting his vote against the measure:
The measure will now go before the Arizona voters on a ballot in 2022.
The ballot initiative would repeal a 15-year-old ban on in-state tuition for undocumented high school graduates, including about 2,000 Dreamers per year. Voters created that ban in 2006 when they approved Proposition 300, which denies public benefits to those not in the country legally, including reduced cost tuition.
