FILE - Arizona Gov. Katie Hobbs delivers her State of the State address at the Arizona Capitol in Phoenix, Jan. 9, 2023. On Friday, March 3, 2023, Hobbs said corrections officials do not plan to carry out an execution on April 6, 2023, even though the state Supreme Court scheduled it over the objections of the state's new attorney general. Hobbs has ordered a review of death penalty procedures in Arizona due to the state's history of mismanaging executions. (AP Photo/Ross D. Franklin, File)
A steep budget deficit caused by plummeting tax revenues and escalating school voucher costs will be in focus Monday as Democratic Gov. Katie Hobbs and the Republican-controlled Arizona Legislature return for a new session at the state Capitol.
The Legislative new year officially begins in the afternoon with the governor's annual State of the State address The goal is to wrap up the legislative session within 100 days, but lawmakers typically go until May or June, especially when there are difficult problems to negotiate like a budget shortfall.
The state had a budget surplus of $1.8 billion a year ago. But it now has a shortfall of about $400 million for the current fiscal year and another $450 million shortfall the year after.
A tax cut approved by legislators in 2021 and signed into law by Hobbs’ Republican predecessor, Gov. Doug Ducey, replaced the state’s graduated income tax with a flat tax that took full effect last year. Arizona subsequently saw a decrease of over $830 million in revenues from income taxes, marking a nearly 30% decline from July through November.
Meanwhile, a school voucher program expansion that originally was estimated to cost $64 million for the current fiscal year could now top $900 million, according to budget analysts.
The voucher program lets parents use public money for private-school tuition and other education costs. Nearly 73,000 students participate now that all students can get the vouchers. The average scholarship is roughly $9,700 per student.
Water will also be an issue for the Legislature amid a severe long-term drought in the arid southwestern state. Concerns are growing in Arizona about shortages from the Colorado River system, which provides the state with about 40% of its water, and about shrinking supplies of groundwater and regulation in rural areas.
Calling drought the “challenge of our time,” Hobbs has limited housing development in parts of metro Phoenix over water concerns and canceled state land leases that for years gave a Saudi-owned farm nearly unfettered access to pump groundwater.
Worries about a record number of migrant arrivals on Arizona's southern border could also be a potent issue for state lawmakers in an election year.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
