Arizona’s Long Term Water Augmentation Fund, initially established to secure $1 billion for new water sources, is facing another financial diversion. The fund, created by the Arizona Legislature and former Governor Doug Ducey in 2022, is now contributing over $70 million to balance the state’s budget, raising concerns among officials and lawmakers.
The decision to allocate these funds has been criticized as shortsighted by the state agency responsible for securing additional water sources. The move also drew criticism from members of the Senate Appropriations Committee, who largely voted to advance the $17.6 billion budget proposal for the upcoming fiscal year.
Senator Vince Leach expressed his dissatisfaction, saying, “It’s not even a sweep. It’s worse than that. It’s a piggy bank, and we’re using it, and have been using it, as a piggy bank. And this budget continues the piggy bank approach.”
The full Senate is set to deliberate on the budget following the committee’s vote. The budget was a result of negotiations between Democratic Governor Katie Hobbs and Senate Republicans, diverging from a separate budget passed by House Republicans, which was declared dead by Hobbs and Democrats in favor of the Senate’s version.
All 16 bills within the budget framework received a supermajority endorsement from the committee members. Additionally, the budget includes measures to waive spending limits on K-12 schools for the next two years, ensuring they can fully utilize allocated funds.
Despite this, some lobbyists pushed for specific amendments. State corrections officers, for instance, advocated for a 20% salary increase instead of the proposed 5%. They warned of potential retirements impacting already understaffed prisons if compensation wasn’t improved.
Conversely, hospitals welcomed the Senate’s decision to terminate a temporary $100 million yearly tax funding the state’s Medicaid plan, a move not mirrored in the House’s budget proposal. “We appreciate the fact that the Senate budget, unlike the House budget, ends this practice this year,” said Tom Farley, representing the Health System Alliance of Arizona.
The budget hearing provided a forum for public commentary, with some praising the budget for its allocations. Notably, individuals like Rachel Lack, whose son with severe autism has benefited from state funding, expressed gratitude for continued support for developmental disabilities.
However, the use of $73.2 million from the WIFA fund was contentious. Originally, the fund was intended to allocate $333 million annually over three years to identify and develop new water sources, including a potential desalination plant in Mexico. The plan faltered due to lack of transparency and Mexican government involvement.
In recent years, funding commitments to the WIFA fund have dwindled, with only $190 million allocated in 2023 and a $100 million reduction the previous year. Judah Waxelbaum, WIFA’s chief legislative liaison, criticized the current budget for repeating past mistakes, stating it sends “a deeply contradictory message” to stakeholders.
Despite earlier resolutions from the House and Senate identifying past fund diversions as errors and pledging to restore critical funding, this year’s budget continues to divert resources from the WIFA fund, drawing mixed reactions and highlighting the ongoing debate over Arizona’s fiscal priorities.
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