The Republic | azcentral.com

The Arizona Legislature is debating the state's $9.8 billion spending plan.

Lawmakers are holding public hearings on the tentative budget deal, which encompasses 11 pieces of legislation, including a proposal to give universities $27 million a year for 25 years to help underwrite extra bonding authority and pay for capital needs.

Reporters for azcentral.com are providing updates throughout the day:

Friday

3:55 a.m.: House passes budget

With little debate, the state House passed the last of the budget bills, ensuring passage of the $9.8 billion spending plan.

Democrats again complained the state could have done more for boosting teacher pay.

Republicans maintained the budget provides meaningful teacher raises and urged school districts to find even more money for additional pay hikes.

The budget won't formally be presented to Gov. Doug Ducey until Monday.

— Ronald J. Hansen and Mary Jo Pitzl

12:15 a.m.: Senate adjourns

The state Senate adjourned until 11 a.m. Monday after passing the 11-bill budget package. Senate staffers said the budget bills, still being debated in the House, will be transmitted to Gov. Ducey on Monday.

- Mary Jo Pitzl

Thursday

11:01 p.m.: University bonding measure passes

A majority of both Senate Republicans and Democrats voted to approve the university bonding measure, House Bill 2547. The measure passed 23-7.

Warren Petersen, of Gilbert, was the lone Republican "no" vote.

These Senate Democrats voted against the measure: Lupe Contreras of Avondale, Andrea Dalessandro of Green Valley, Katie Hobbs of Phoenix, Juan Mendez of Tempe, Lisa Otondo of Yuma and Martin Quezada of Glendale.

Quezada vented anger and disappointment that had built over recent days as it became clear Gov. Doug Ducey had bypassed Democrats in gathering votes to pass the budget.

“I find it extremely unfortunate that there is an assumption out there that if you vote against this bill for whatever the reason is, that you don’t support universities," he said of the measure that would increase the school's bonding capacity.

“I can tell you from my caucus, we fought for universities when there was a proposed $115 million cut. We fought for the universities when that was negotiated down to a much more manageable $99 million cut. We were the ones standing up fighting for the universities.”

Sen. Lupe Contreras, D-Avondale, said he had been ridiculed in recent days for not supporting the bonding measure.

“I fight for all education, not just higher ed. I fight for K-12, higher ed and everything in between. I’m not going to pick one over the other,” he said. "… If you think my job is easy, come do it. There’s an election every two years.”

Sen. Sylvia Allen, R-Snowflake, said Democrats were feeling the sting of being labeled as opponents of education, something she has felt for years.

“You want to see what the union’s been saying to me?” she said. “I agree there’s a lot of disrespect going on. I think it’s kind of ironic that you understand now what it feels like to be told you don’t stand up for education because you don’t vote for a bill. … I’m sick and tired of the emails, too.”

Immediately after the vote, Senate President Steve Yarbrough said the win felt "terrific," adding: "We worked our fannies off -- I wanted to light my hair on fire multiple times the last two days."

He said he had to give away "amazingly little" to earn support from conservative Republicans.

He said the $2 million for the "freedom-schools" was money that would have already gone to Arizona State University and University of Arizona.

"...It really cost nothing," he said. "All we had to do is said, 'Just make sure it lands here or there.' That was one of the cheapest things that I got to buy in the last three days."

Reporters asked Yarbrough the goal of banning general fund dollars from paying for university contract lobbyist since no such funds pay for them now. He indicated more would come on that front next week.

"Oh, I think that may yet get dealt with on Monday, could happen," he said. "We are amazing sometimes. We're not done figuring that out."

Asked to clarify what problem he is trying to solve, Yarbrough said the current deal is "not in the form that is entirely satisfactory." He added, "Sometimes we do stuff just to feel good."

— Yvonne Wingett Sanchez and Ronald J. Hansen

8:30 p.m.: What's going on up there?

While the wonks and lawmakers worried about the budget, Gov. Doug Ducey’s chief of staff, Kirk Adams, took to Twitter and suggested, ahem, leisure-time pursuits were underway on the Ninth Floor.

When a news editor had an exchange with Adam via Twitter about an item in the budget, Adams, a buttoned-up conservative who wields considerable power, shot back with a sarcastic reply.

“Yeah man. It's been nothing but Netflix and chill up here all year,” Adam tweeted.

We’re guessing — like many — Adams did not know how kids these days are using the phrase as a euphemism for romantic pursuits. (You can find a definition here.)

The tweet triggered a flurry of responses, including this one, from public-relations consultant Matthew Benson: “That’s it, I’m not sitting on ANY of the furniture up there ever again! #urbanDictionary

— Yvonne Wingett Sanchez and Ronald J. Hansen

7:58 p.m.: Did Democrats overplay their hand?

In the end, it is looking like Democrats won’t be needed at all to pass the budget or the bonding issue.

Democrats asked for a 4 percent teacher raise over one year, and a full restoration of the state’s cash-aid assistance program.

The asks were too big for Gov. Doug Ducey, and Republican leadership, who, according to Democratic Rep. Randall Friese, of Tucson, didn’t counter the minority party’s offer.

Instead, Republicans enticed conservative members of their caucus with other offers that, if passed, will make the budget – and state policies -- even more conservative.

If the deal holds, Democrats will suffer a loss greater than if they had vowed publicly to support the university bonding package, political observers said.

Republicans are discussing giving Arizona State University and University of Arizona at least $1 million for their Koch-backed “freedom-schools,” aimed at advancing free-enterprise ideals at the universities and widely opposed by Democrats. The GOP is also considering a way to prevent the universities from using state general fund dollars to hire contract lobbyists. And, they are advancing a bill that would require municipal elections involving tax increases be held on even numbered years, presumably making it more difficult to hike taxes because of higher voter turnout.

GOP consultant Chuck Coughlin said Democrats rallied Republicans – namely conservatives – to get on board the budget and bonding measures.

“It certainly created the impetus for the Republicans to draw ranks,” Coughlin said.

Rep. Anthony Kern, a Glendale Republican, said Democrats “always overplay their hand.”

He added, “I don’t believe that bigger government is the answer. I don’t believe that spending us into oblivion is the answer.”

Democratic strategist Barry Dill disagreed with the notion the minority party overplayed their hand.

“I think they’re playing it absolutely perfectly,” he said. “Even though they may lose, I applaud them, and they have to fight this battle and stand strong on a 4 percent teacher pay increase because they believe – and many of us believe -- that that is something that the public supports.”

-- Yvonne Wingett Sanchez and Ronald J. Hansen

7 p.m.: House passes university bill

The House of Representatives passed the university-funding measure on a 33-26 vote.

Democrats voted against, as did Gilbert Republicans Eddie Farnsworth and Travis Grantham.

-- Yvonne Wingett Sanchez

6:30 p.m.: Democrats try

Senate Democrats spent the afternoon and early evening on the hopeless task of trying to get an amendment passed.

They pushed, and pushed, and pushed for several different proposals:

4 percent teacher raise.

Restoring cash assistance for needy families to a lifetime limit of 24 months.

Appropriating $8.3 million to the Department of Revenue for tax enforcement.

Appropriating $8 million for daycare for low-income working families.

No Democratic bills passed. Any changes not blessed by Republican leadership would implode the budget process.

— Alia Beard Rau

5 p.m.: How to win more GOP votes

In an effort to win over enough Republicans to pass the university bonding measure, GOP leaders are talking with conservatives about the following:

Giving Arizona State University and University of Arizona at least $1 million for their “freedom-schools,” the Koch-backed schools aimed at advancing free-enterprise ideals at the universities. The Koch network helped fund Ducey’s rise to governor, and he and Republicans gave $5 million in state money to the schools last year.

One Republican, Rep. Anthony Kern, of Glendale, told The Republic on Wednesday he was one of the university holdouts, saying: “We can turn on our TV and see what the universities around our country, not just Arizona, are producing — look at (University of California) Berkeley,” he said. “That's an example of what our universities are producing.” As of 5:10 p.m., Kern said it is unclear how more money for the schools could sway his vote on the university issue.

Ban on using state general fund money for contract lobbyists at state universities. This follows Ducey’s executive order last year that banned various state boards and commissions from hiring contract lobbyists, saying last year he wanted to end a system where “lobbyists get richer” at the expense of taxpayers. Earlier this session, Ducey signed legislation that makes the executive order permanent.

Passage of a bill that would require municipal elections involving tax increases be held on even numbered years, presumably making it more difficult to hike taxes because of higher voter turnout. The bill is being heard in a House committee, going through the normal legislative process.

House Speaker J.D. Mesnard, R-Chandler, said there are discussions involving the items, which he thinks could move “a number of Republicans” to 'yes' votes on the bonding deal in both the House and the Senate.

“There’s an interest in some one-time money for the ‘freedom schools,’” Mesnard said. “That seems to be the direction things are going.”

Mesnard said the amount of money for the “freedom schools” is “going to be at least $1 million.”

Asked about the contract lobbyists, Mesnard said there is an interest among some members in ensuring general fund dollars don’t go to them. Some of those lobbyists have been furiously working holdouts and Democrats over the past several weeks to ensure passage of the bonding deal.

“The universities have lots of pots of money — this is being a little more prescriptive with state money,” he said.

Mesnard said things are changing constantly, but “These are the kinds of things people are talking about.”

— Yvonne Wingett Sanchez

4:05 p.m. House strips money from MCSO

A provision in the criminal-justice budget bill removes $1.6 million in funding from the Maricopa County Sheriff’s Office for gang enforcement and redistributes it to process rape kits. Pima County will get $400,000 of the total.

Democrats smelled a partisan ploy, noting Maricopa County voters just elected a Democrat to the post after years of Republican Joe Arpaio, and Pima County got a GOP sheriff after years of Democratic control.

After not initially getting an answer to questions about the reason for the fund shift, Rep. Ken Clark, D-Phoenix, finally did.

“The new sheriff has stated publicly that he doesn’t want to enforce all the immigration laws,” said Rep. David Livingston, R-Peoria.

Which prompted Rep. Mark Cardenas, D-Phoenix, to pop up and read a news story about a Penzone raid on illegal immigrants.

Livingston was skeptical, saying he’d have to see the story for himself and judge if it’s “fake news.”

Rep. Anthony Kern, R-Glendale, echoed Livingston’s message, adding that “elections have consequences.” So for rejecting Arpaio, Maricopa County residents lose money for crime enforcement.

During the back-and-forth, Penzone’s office announced a news conference for 4:45 p.m.to respond. Yesterday, the office reserved comment, saying the matter needed some evaluation.

Meanwhile, the House approved the measure, House Bill 2540, on a party-line vote, passing the first of the 11 budget-related bills.

— Mary Jo Pitzl

3:30 p.m. Raise or bonus for teachers?

Republican lawmakers are touting what they describe as a 2 percent raise over the next two years for teachers.

But educators now say they're getting a bonus, not a raise — and it could disappear at any time.

The increase is set up in such a way that it doesn't go into the base revenue the state allocates to districts each year, "thus making it temporary and not permanent," said Arizona School Boards Association spokeswoman Heidi Vega.

Senate President Steve Yarbrough, R-Chandler, has also introduced an amendment to the budget that would require school districts that don't get state aid because of their higher tax base — like Scottsdale, Cave Creek and Prescott — pay for the salary adjustment themselves.

"Legally, these districts are not required to provide these 'bonuses' to teachers since it's not a mandate," Vega said.

— Alia Beard Rau

2:48 p.m.: A show of bipartisanship — but not for budget bills

The House of Representatives is stalling on budget action, instead taking up unrelated bills. House Speaker J.D. Mensard is working the floor, talking to Republican lawmakers.

In a departure from the partisan politics, lawmakers opened the floor session by belting out a rendition of "Happy Birthday" to Rep. Eddie Farnsworth, R-Gilbert.

Regina Cobb, a Kingman Republican, took the mic to wish the birthday-boy good vibes. Then, the body sang him the birthday song.

Farnsworth thanked them for their wishes, saying, "I can tell you this: I would much rather spend time somewhere else than here, on my birthday."

He quipped that his older age comes with a silver lining: Along with Rep. Lawrence, R-Scottsdale, he said, he will probably nap through most of the blabbering that will go on" over the budget bills, "secondly, tomorrow, I probably won't remember any of this."

— Yvonne Wingett Sanchez

2:38 p.m.: They're not going anywhere

For anyone who thought today might be curtains for the 53rd session of the Legislature, here's some cold water: They're coming back next week.

The House and Senate extended the session through next Thursday, despite a chorus of "no" votes when it came time to vote on the extension. Most expect the Legislature to adjourn sine die (meaning: curtains) next week. But that depends on what happens, or doesn't happen, with the budget package.

- Mary Jo Pitzl

1:45 p.m., An educated vote?

Rumors abound that more conservative lawmakers are making deals with Republican leadership and Gov. Doug Ducey in return for their support of the budget and university bonding.

Sen. Kate Brophy McGee, R-Phoenix, considered among the more moderate Republicans, voiced concerns during a Republican caucus meeting about what that might mean for her.

“I need to know what’s going into those amendments. At some point, then I become a no,” she said. “There’s a lot of rumors going on out there and I’m just trying to understand the process.”

Senate Majority Whip Gail Griffin suggested Brophy McGee just follow her asmajority whip to know how to vote.

Brophy McGee balked.

“I don’t want to be in asituation where I have to vote for it to find out what’s in it,” she said. “I hate that.”

Senate President Steve Yarbrough, R-Chandler, told her he was sympathetic to her frustration.

“I am aware that there are all sorts of conversations going on. It’s a perpetual target,” he said. “We will do our dead-level best to keep you informed so when you do cast your vote one way oranther, it’s the wisest vote you could possibly cast under the circumstance.”

--Alia Beard Rau

1:15 p.m., Senate back at work

The Senate recessed for lunch and then was back for informal discussion of non-budget bills.

House Bill 2090 would require the Arizona State Land Department to adopt licensing time-frame rules for certain applications.

Senate Bill 1003 sets requirements for the Department of Child Safety, including related to removing a child from his or her home.

SB 1161 expands when a city can create an improvement district to pay for retention basins. It was a push by Sen. Don Shooter, R-Yuma, to address an issue in Yuma.

Many of the bills moving through Thursday appeared to be carrots to entice certain lawmakers to support budget and/or university bonding issues.

Earlier in the day, the Senate gave preliminary approval to House Bill 2528, which would increase individual personal tax exemptions, giving taxpayers and extra $50 a year.

Sen. Steve Farley, D-Tucson, called it a $10 million sweetener to get a couple of Republican House members on board.

Sen. Steve Montenegro, R-Litchfield Park, said it gives money back “to the little guy.”

The Senate also gave preliminary approval to two bills that would increase workers’ compensation coverage for firefighters.

HB 2161 would expand the types of cancer that would be covered. HB 2410 would expand the coverage for cardiac-related issues for firefighters.

12:02 p.m. House Speaker on behind-the-scenes budget action: "Negotiations up the yin yang"

Republican House Speaker J.D. Mensard told The Arizona Republic in a hurried interview he is more optimistic the university funding proposal could pass with only Republican support. Democrats, he said, may have overplayed their hand — and knocked themselves off the table.

Republican's pathway to a potential 31 Republican votes widened overnight, he said, as negotiations on bills outside of the budget package began, mostly with conservative Republicans.

Off of the House floor, Republican leadership is scrambling to cobble together a deal, Mesnard said, with "negotiations up the yin yang to see what it takes to get 16 (votes in the Senate) and 31 Republicans (in the House) on the (university) bonding proposal."

Mesnard, a Chandler Republican, said closed-door discussions involve proposals outside of the budget "that people care about," particularly squeamish Republicans.

"The negotiating spectrum has broadened, so there are more possibilities. I think there are plausible pathways forward."

— Yvonne Wingett Sanchez

11:15 a.m. Democrats still open

Sen. Steve Farley, D-Tucson, said he doesn't understand all the heartburn from Gov. Doug Ducey and the Legislature about trying to wrangle Republican votes for the university bonding plan when Democrats are ready to negotiate.

All they want, Farley said, are two things Ducey said he wanted during his State of the State address: teacher raises and additional services for low-income families.

Specifically, Democrats want a 4 percent raise for teachers and a restoration of the Temporary Assistance for Needy Family funding assistance with no strings attached.

But so far, Ducey hasn't reached out.

Senate will start its Committee of the Whole to address some non-budget financing bill at 11:30 a.m. No word on when the Senate will hold its Committee of the Whole hearings on budget and/or university funding bills.

— Alia Beard Rau

11:07 a.m.: House floor session begins

The House of Representatives began its session, opening with a prayer by Rep. Anthony Kern, of Glendale, followed by the Pledge of Allegiance. Expect a lengthy discussion of bills.

A short time before they went into session, Gov. Doug Ducey sent a tweet saying Arizona is "prioritizing K12!" education with teacher salary increases, money for construction of new schools, and access to broadband in rural areas.

A short time later, he posted a photo of him meeting with children from Scottsdale-based St. John XXII Catholic School.

— Yvonne Wingett Sanchez

10:10 a.m. GOP leadership: expect a brutal day

Many lawmakers had a restless night, some even dreaming about the state budget.

In a fog, Senate and House Republicans spent the first part of the morning in a caucus meeting getting additional details about the budget proposal.

Discussion in the Senate ran the gamut: Why does the budget include room for the governor to give the director of the state’s auto theft program up to a 30 percent raise? Does the budget include enough money to mitigate the impact of the voter-approved minimum wage hike on companies that serve individuals with developmental disabilities?

On the latter, several senators worried the $33 million allocation wasn’t enough. Staff said companies could come back later if they were in urgent need and seek additional money.

For the much-discussed university bonding proposal, it’s still unclear whether the governor has the votes to pass it.

Sen. Steve Smith, R-Maricopa, is among the questionable votes. Thursday morning, he said he didn’t like the proposal at this point, but was still open to conversation.

When asked where he stood, Sen. Sonny Borrelli, R-Lake Havasu City, answered with a joke.

“We all like bonding,” he said. “Bonding between parents and kids.”

In the House Republican caucus, Majority Leader John Allen, of Scottsdale, braced lawmakers for a long day, and thanked them for the work. He suggested there are enough votes to pass both the 10-bill budget deal and the separate university funding measure.

"It's a comfort to me that we're going to have 35 defenders of this budget as we go through," he said, adding, "Let's keep working in the same direction. There's things in this budget that we all like, there's things in this budget we could live without, and there's things in this budget that each of us wish wasn't in there. That's probably the sign that we've come up with a fairly good compromise.

"The jockeying's over. It's time to get this through the finish line."

He said lawmakers could be at the state Capitol "Until 8 o'clock, 12 o'clock, or 5 o'clock." He asked members to "keep a level head," and said leadership will aim to keep members informed of the day's schedule.

Asked by Rep. Jay Lawrence, of Scottsdale, what the House votes are on the university funding package, Allen responded, "The bond issue should pass ... and members, I believe we'll have a majority of our caucus on that bill ... but it's a tough vote. We know what we're asking. So, you know you're districts, you know who you are, you make your own decisions."

Meanwhile, in the Senate, President Steve Yarbrough warned lawmakers of a brutal day.

"We are going to start soon and go until we are finished," Yarbrough said. "None of us are thrilled at the prospect of a 26- or 36-hour day. But this is our job and we are going to do it."

— Alia Beard Rau and Yvonne Wingett Sanchez

10 a.m.: Floor session delayed

The House GOP caucus has ended. House Speaker J.D. Mesnard, R-Chandler, postpones floor session to 11 a.m. from the scheduled 10 a.m. The Senate is still caucusing.

— Mary Jo Pitzl and Alia Beard Rau

9:50 a.m.: Caucus meeting delves into teacher pay

House Republicans begin caucus on time. Lots of concerns among the caucus’ more conservative members on the teacher-pay provision. They don’t trust school boards to get the money to teachers and want more accountability on where the money is spent.

“It is not our job to pay teachers,” said Rep. Mark Finchem, R-Oro Valley, echoing the position of Rep. Travis Grantham, R-Gilbert. That’s the job of the local districts, they said.

— Mary Jo Pitzl

Wednesday

5 p.m.: Left behind: Fraud fears nix fingerprinting bill

A bill that got off to a fast and promising start has been killed by fears of food-stamp fraud.

The bill would have dropped the fingerprinting requirement for obtaining food stamps. The argument from supporters ranging from Gov. Doug Ducey to House Majority Leader John Allen was it’s redundant: state and federal programs have numerous other ways that they check to ensure an applicant is truly qualified to get the benefit, such as examining unemployment-payment records, Social Security benefits and even motor-vehicle records (which would reveal whether the applicant was a U.S. citizen).

Eliminating that requirement could have saved the budget about $400,000 – small change in a $9.8 billion budget, but still a savings.

However, the bill got stuck in the Senate. Allen, whose House Bill 2091 passed the House easily in early February, said too many Senate Republicans were skeptical of removing the fingerprint rule. They were suspicious a fraudster would slip though.

Ducey’s office said the bill foundered during budget talks, a concession to the give-and-take of negotiations.

Meanwhile, the Association of Arizona Food Banks has been trying to revive the matter. Not only would it save money in state’s general fund, said Angie Rogers, the association’s president and CEO; it would have shaved $1.6 million off of the federally run program’s costs in Arizona.

“We’re at a loss to understand it,” she said.

- Mary Jo Pitzl

3:32 p.m.:

House Appropriations panel resumes work, two bills left. Meanwhile, the Senate counterpart is still running.

University bonding plan passes House Education Committee on party-line vote. So it's ready for Rules and floor debate in both chambers.

2:50 p.m.: Schools' most pressing needs?

The House Appropriations Committee is still on recess while it waits for the Education Committee to vote on the university bonding proposal.

It closed out its morning session with a discussion of the K-12 spending bill and, in particular, the results-based and literacy funding it includes.

Some educators said it would be better to direct the $48 million from the two programs to what they called the schools’ more pressing needs.

Heather Cruz, the superintendent of the Litchfield Elementary School District, said those needs are better teacher pay and money for repair and maintenance.

“I don’t think the first things on people’s minds are results-based funding and literacy,” Cruz said.

Sean Rickert, the superintendent of the Pima Unified School District in southeastern Arizona, echoed that message.

“We’re taking a lot of little stop-gap approaches,” Rickert said. “But we aren’t necessarily addressing the broad needs of students in Arizona.”

— Mary Jo Pitzl

2:25 p.m.: Sen. Allen: Teacher raises are school districts' responsibility

1:56 p.m.: Sen. Farley on U. funding

1:30 p.m.: Democrats in Tempe, Tucson face extra pressure

State Republicans think they have nailed down the last votes needed to ensure passage of the $1 billion university bonding plan tied to the state’s overall proposed budget.

Gov. Doug Ducey and Republican leaders in the House and Senate appear to have pulled in more GOP support for the bonding bill by agreeing to add a tax cut that would raise the personal exemption on the state’s income by $100 over the next two years.

That still leaves Democrats generally opposed to the bonding plan because there is no plan to double the teacher raises to 4 percent, as they had sought.

While Republicans and their allies on the bonding measure are optimistic, the bill faces tight votes on the floor of the House and Senate. The votes on the bills are expected Thursday.

A big question: Will any Democrats vote for the bonding measure?

It is perhaps hardest to reject for members whose district includes cities that would most benefit from construction projects.

These are the lawmakers who may feel the most political heat on the bonding issue:

In the Senate, four Democrats are from Tempe and Tucson, home to Arizona State University and the University of Arizona.

They include David Bradley, Olivia Cajero Bedford, Steve Farley and Juan Mendez.

Asked Wednesday about facing his Tucson district if he voted against the measure, Bradley grimaced. Like other Democrats, he wants more for K-12 education.

Apart from those, there are others like Sen. Sean Bowie, a freshman Democrat, who made supporting education the centerpiece of his election win last year.

There are nine House Democrats from Tucson or Tempe.

That group includes Isela Blanc, Kirsten Engel, Mitzi Epstein, Randy Friese, Sally Ann Gonzales, Daniel Hernandez, Pamela Powers Hannley, Macario Saldate and Athena Salman. Six are freshmen.

— Ronald J. Hansen and Yvonne Wingett Sanchez

12:30 p.m.: Initial budget votes, 2 GOP holdouts come on board

The House Appropriations Committee has voted out eight of the 10 budget bills on party-line votes (Republicans in support, Democrats opposed).

GOP representatives Michelle Ugenti-Rita of Scottsdale and Tony Rivero of Glendale both say they are supportive of the entire budget, including university bonding. They had objected to the bonding proposal, but won concessions that the budget will include an increase in the personal income-tax exemption of $100 over two years.

That means that for Tax Year 2017, the exemption would rise to $2,150 and bump up to $2,200 in the following year. The proposal will be added to Speaker J.D. Mesnard's bill which indexes the personal-exemption to inflation, Ugenti-Rita said.

She added the Senate has agreed to the change. What's unclear at this point is how much more this will subtract from the state's general fund.

After the vote, the committee recessed and will resume after the House floor session that starts at 1:15 p.m.

— Mary Jo Pitzl

12:05 p.m.: Bonding gets OK in Senate committee

The Senate's Education Committee passed the $1 billion university bonding bill, Senate Bill 1532, out of committee on a 3-2 vote.

Democratic Sens. Catherine Miranda and David Bradley reluctantly voted against the measure, saying they wanted to also see more resources given to K-12 education. Specifically, they join other Democrats holding out for a 4 percent raise for public school teachers.

Miranda and Bradley emphasized their support for higher education, but said they can't ignore unmet needs in K-12 schools.

The bonding plan would provide the state’s three public universities with money for 25 years to help pay for additional bonding authority. The money would begin at a combined $27 million annually and could grow to about $43 million in the last year.

The universities would use the money for capital needs, such as constructing new research facilities at Arizona State University.

Gov. Doug Ducey had battled fellow Republicans over how to pay for the bonds for months, before settling on a general fund appropriation.

— Ronald J. Hansen

11:01 a.m.: Senate president ill?

Adding to the drama of the morning, Senate President Steve Yarbrough appeared ill during the Senate’s Education Committee, which was considering the university bonding proposal.

The meeting was the first step toward possible passage of the proposal, which would give universities $27 million in state funds over 25 years for bonding capacity.

When the Chandler Republican spoke in favor of the measure, he apologized several times, saying he had a headache. For a spell, he could not recall the name of Gov. Doug Ducey.

Yarbrough’s staff said the senate president was suffering from a migraine, and had been checked over by paramedics. Senate Republican spokesman Mike Philipsen said the day would proceed as planned, although those plans remain somewhat fluid. Yarbrough later gave a reporter from The Republic a smile and a wave.

— Yvonne Wingett Sanchez and Ronald J. Hansen

10:55 a.m.: KidsCare funding

The budget bill dealing with health, House Bill 2542, would block any new enrollment in KidsCare, the state's children's health-insurance program, if federal funding falls below 100 percent. Democrats note that if the funding goes down even 1 penny, theoretically, the program stops taking new sign-ups.

The Legislature reinstated KidsCare last year in the closing days of the session after heavy lobbying to restore it . Critics worried that if the federal money goes away, the state would be on the financial hook for the cost.

— Mary Jo Pitzl

10 a.m.: A breakthrough in the House?

Republicans now seem confident they have the needed votes to pass the university bonding measure in the House, though it may still be just short in the Senate.

Several lawmakers and people familiar with the budget negotiations say tax cuts favored by Rep. Michelle Ugenti-Rita, chair of the House Ways and Means Committee, are being added to the budget.

Ugenti-Rita has sought an increase to the state’s personal income tax exemption limit, which she described earlier this week as “a modest start, but it’s a start.”

Bringing that aboard the budget made her supportive of the plans, along with other GOP holdouts. It may have cost unified Democratic support of the bonding measure in the process.

Asked if Gov. Doug Ducey or his staff was meeting with Democrats and Republicans today, his deputy chief of staff Daniel Scarpinato responded: "We are meeting with members throughout the day, I don't have specific names right now."

Senate President Steve Yarbrough acknowledged his chamber is still short of unified GOP support for the bonding measure, meaning at least some Democrats may be needed to pass the bonding plan.

— Ronald J. Hansen

9:43 a.m.: House hearing begins

Rep. Lela Alston, D-Phoenix, asks that the time be noted. They're almost two hours behind schedule. The committee breezes through House Bill 2538, which deals with appropriations for capital outlays, with just one question from Rep. Mark Cardenas, D-Phoenix, on car-wash facilities.

— Mary Jo Pitzl

9 a.m.: Tick tock

The 8 a.m. hearing has yet to begin. The House hearing room is standing-room only, filled mostly with lobbyists staring intently at their cell phones or querying staffers about budget details.

Appropriations Committee members are drifting in and out — all but four of the 14 members have popped their heads in at one point.

Rep. Heather Carter, R-Cave Creek, is reportedly working on an amendment to provide more funding for state contractors who serve the developmentally disabled. The contractors say they have been pushed to the limit by the Jan. 1 increase in the state minimum wage and need an adjustment to their contracts.

The budget provides $33 million; lobbyists for those service providers say the actual increase is about half of that.

— Mary Jo Pitzl

6 a.m.: Key issues to watch

As Yvonne Wingett Sanchez and Ronald J. Hansen reported Tuesday, the centerpiece of the budget might be 2 percent raises for public school teachers. Those raises will be phased in over two years even though Gov. Doug Ducey initially proposed phasing them in over five years.

The most contentious issue, however, will be the university bonding plan worth up to $1 billion, which will be taken up as a standalone bill.

Ducey has battled fellow Republicans, who opposed his initial plan to set aside certain sales tax revenues to help pay the debt. The measure will need at least some Democratic votes to pass and if it fails the entire budget deal could fall apart.

Your chance to have your voice heard

The hearings start at 8 a.m. Wednesday in the House of Representative's Appropriations Committee. The Senate's Appropriations Committee is scheduled to debate the budget package at 12:30 p.m. Separately, the Senate Education Committee is set to meet at 9 a.m. Wednesday to consider Senate Bill 1532, the university bonding package. The House of Representative's Education Committee will take the issue up at 2 p.m.

Reporters for azcentral.com will provide updates throughout the day.

READ MORE:

Here's your chance to have a say on AZ budget

Teachers protest low pay with 'boat parade'

Arizona university tuition hikes outpace state cuts

State budget deal tied to university bonding issue

Counties in crisis after decade of state funding sweeps