By Howard Fischer
and Bob Christie
Capitol Media Services
PHOENIX -- Arizona Gov. Katie Hobbs asked lawmakers Monday to approve a new program she said will make home ownership more affordable for middle-income and rural homebuyers.
In her second State of the State address, Hobbs said she wants to expand down payment assistance and mortgage rate relief for families making 80% of less of an area median income. She said that figure for Phoenix would mean any family making $75,000 would qualify.
That proposal would require legislative approval.
More to the point, it also would require money. But gubernatorial staffers provided no details as to how much -- and where they would find the cash in a year where revenues are running behind expenses to pay for any of that.
Press aide Christian Slater said there would be more specifics when Hobbs releases her budget plan on Friday.
Other key points of the governor's address include:
- Expanding options for rural communities to regulate groundwater and approving a work-around of state water laws that have stymied new development in areas of Buckeye and Queen Creek that do not have a 100-year assured supply;
- Extending a program that allows the state to take money out of a special trust account to supplement state aid to schools to fund teacher salary increases, a measure that would require not only legislative but voter approval;
- Repeating her demand for more regulation and limits of the program that allows students to get vouchers of state funds, known as "empowerment scholarship accounts,'' to attend private and parochial schools, a plan Republican leaders already have pronounced dead on arrival;
- Providing greater oversight of long-term care and sober-living facilities, increasing the fines on violators and allowing Adult Protective Services to seek emergency protection orders;
- Regulating the prices of some drugs and cracking down on what she called "price-gouging middle men in our healthcare system'' that boost the cost of prescription drugs;
- Expanding access to health care through doubling the size of the University of Arizona medical school, creating and "engineering-focused medical school'' at Arizona State University, and opening a new medical school at Northern Arizona University to focus on rural and tribal needs.
The governor also said she wants lawmakers to repeal the territorial-era law that outlaws abortions except to save the life of the mother.
A trial judge had ruled that old law, never repealed after the 1973 U.S. Supreme Court ruling of Roe v. Wade, was automatically reinstated once the justices voided that decision. The state Court of Appeals disagreed, saying a more recent 15-week ban, takes precedence.
Now the issue is before the Arizona Supreme Court. But the governor does not want the right to terminate a pregnancy dependent on what a majority of the seven-member court concludes.
"There are commonsense bills we can pass right now that will expand access to reproductive healthcare,'' Hobbs said.
Aside from repealing the old law, Hobbs wants lawmakers to enact a "Right to Contraception Act.''
She provided no details of what that would include.
But it presumably encompasses not just the right to terminate an abortion -- the subject of an initiative drive to put that into the Arizona Constitution -- but also is designed to preclude future legislation that could limit access to things like birth-control devices.
The voucher and abortion issues actually are repeats of last year's state of the state address, proposals that prompted a walkout of a large number of majority Republicans.
This year there was no walkout. But Sen. Anthony Kern, R-Glendale, stood up and turned his back to her during those parts of her address.
Other House and Senate Republicans sat pretty much stone-faced throughout the approximately 45-minute speech from the Democratic governor, even when she mentioned generally popular issues like affordable housing and updating the state's 43-year-old groundwater law.
House Majority Leader Leo Biasiucci told Capitol Media Services there was no prior agreement not to react. In fact, two Republicans did break ranks in a way.
Rep. Matt Gress stood up and applauded when Hobbs called on lawmakers to raise teacher pay. The Phoenix Republican, a former school board members, has a proposal of his own to add $4,000 to teacher salaries.
And Rep. David Cook, R-Globe, cheered when Hobbs mentioned that new medical school to help meet rural needs.
But Biasiucci said the lack of reaction from other GOP lawmakers should not come as a surprise.
"A big part of it is, we don't know any of the stuff she is proposing,'' said the Lake Havasu City Republicans.
"We haven't seen anything,'' he continued. "So until we see them, I don't know how you get behind it.''
What that means, said Biasiucci, is a wait-and-see approach. Consider, he said, the governor's desire to deal with rural water issues.
"That's a big deal in my district,'' Biasiucci said. "So, there could be good policies coming out.''
But some, he said, are "non-starters.''
"When you talk about legalizing abortion and getting rid of of ESAs, I mean, that's just not going to fly By contrast, the Democrats like Hobbs gave an enthusiastic -- and often standing -- ovation to not only those proposals but pretty much everything the governor said.
One proposal that could have broad implications deals with affordable housing.
"I have personally felt the fear and uncertainty of not knowing how you're going to make your next mortgage payment,'' Hobbs said.
"Our state's economy is strong and its opportunities are abundant,'' the governor said. "However, we cannot ignore the fact that for Arizonans across all age, color and geographical boundaries, our housing affordability crisis has erased feelings of prosperity for too many.''
Hobbs did get lawmakers to make a one-time $150 million deposit this past year into the Housing Trust Fund. She said that directly led to 15 new affordable developments, half in rural communities, creating more than a thousand units.
But there were no details about how she plans to provide down-payment assistance to some families or provide them with any relief from what have been mortgage interest rates hovering close to 7%.
Closely linked to housing, Hobbs said, is water.
She specifically noted that the historic 1980 Groundwater Management Act provided no guardrails for rural areas. The governor said she supports proposals from her Water Policy Council that would allow the Department of Water Resources to form some type of oversight districts in rural areas that could each decide what rules on groundwater pumping are appropriate.
Hobbs also said DWR can enact new rules that can provide for relief for developers who were told last year they would not get permits for new subdivisions in Queen Creek and Buckeye because those areas do not have the legally required 100-year supply of groundwater. That provoked outcries from developers.
Now, however, Hobbs said there is a way for DWR to "finalize a new pathway for water providers and communities who have historically relied on groundwater resources.'' In essence, it would give developers an opportunity to achieve that 100-year supply -- eventually -- by finding new water sources.
Legislative approval, however, would be required for two of the governor's proposals to amend the 1980 law.
One would address the fact that the 100-year requirement applies only for owner-occupied homes. Hobbs said that should be extended to build-to-rent subdivisions being erected.
The other would close loopholes that allow for "wildcat'' development, with subdivisions skating those water-requirement laws.
The governor's call for legislative action also came with a warning of sorts.
"To those of you who have spent years refusing to act: if you don't, I will,'' she said, but provided neither specifics or any unilateral authority she has to change water policy.
Another area she will need legislative cooperation is her call to make prescription drugs more affordable.
Much of that is built around some unspecified laws she wants lawmakers to enact of "pharmacy benefit managers'' who handle prescriptions for insurance companies.
Supporters say they can negotiate lower prices with manufacturers. But there also are accusations that they add in their own profits without actually helping the ultimate customers.
Hobbs provided no explanation of how the state would regulate how much these pharmacy benefit managers can charge -- or even the legal authority to do so.
She faces similar problems with her proposals to enact laws to require that Arizonans get advanced notice of price increases for medication, or a separate program she said would cap prices on commonly used drugs like insulin. The Republican-controlled Legislature has proven hostile to any form of price control.
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