Secret Santa: Inside the money pot
A budget never looked so delicious.
Hello, readers!
We’re back with another installment of our Secret Santa series. We had a lot of fun putting this together and we hope you’re enjoying it, too!
Today, we’re serving up a savory story Nicole wrote about one of the least appetizing subjects you can think of.
Bon appétit!
Government budgets are hugely important.
They’re also really technical and difficult to make interesting.
But Nicole pulled it off when she wrote about the state budget in May.
I’m a sucker for weird journalistic gambits. In this one, Nicole sidestepped the usual way of writing about a budget and turned it into a recipe, just like you’d find online while trying out a new dish.
It’s a really fun read. I found myself chuckling several times as I re-read the story.
It also gets the job done, and then some.
Nicole has covered state government every day for two years now. She can write with authority about the players and process that go into making a budget, like saying “the annual budget leak is a sign that the budget process is getting serious.”
What really surprised me was how well the “recipe” shtick holds throughout the story. It wasn’t just a clever gimmick. At the end of the story, I came away thinking, “wow, a budget really is like a recipe.”
Even now, six months later, when I hear about the state budget I think about the “ingredients” she listed in her story, like “heaping scoops of discretionary pork” and “1 giant pot of formula-funded programs.”
Without further ado, let’s put on our aprons and step into the budgetary kitchen.
Click this button and we’ll serve up a year’s-worth of cooking puns.
Arizona’s budget recipe
How the budget sausage gets made
Every year, your lawmakers meet behind closed doors to game out how to spend billions of your tax dollars.
It’s a convoluted, clandestine process that leaves out the public and the Legislature’s minority party as Gov. Katie Hobbs and Republican leadership try to agree on how to spend the state’s money next fiscal year, which starts on July 1.
The House and Senate have taken several weeks off for budget negotiation time — there aren’t a lot of bills left to vote on. But Hobbs’ spokesperson, Christian Slater, told us that official talks between Hobbs’ staff and legislative leaders only started last week.
Since the public doesn’t get a seat at the budget table, we figured why not lay out the budget process in a way that actually makes sense? So we turned the state’s annual budget process into something easier to digest: a recipe.
Our art intern, ChatGPT, knows that making the state budget can get messy.Soon, budget talks will turn into a plan. And the majority of Arizona’s 90 lawmakers will have to vote to approve that plan by June 30 or the state government will shut down. The deadline is likely sooner this year because Republican Rep. Matt Gress, who vice chairs the House Appropriations Committee, has to leave by June 22 for his wedding in Italy.
The budget was delayed even more than usual this year after Republicans announced a plan to give Arizona’s universal school voucher program state constitutional protection through the renewal of Prop 123 — the $300 million per year public school funding stream that’s about to run dry. Last week, Republicans gave up and said they’ll wait to send a Prop 123 renewal to voters next year.
Now, budget negotiations seem to be back at the starting place they were supposed to be at when lawmakers left for vacation earlier this month.
But even though the budget will be baked in the next few weeks, it takes a lot of time to prepare for it.
Kinda like a really complicated recipe.
Recipe: Arizona State Budget
Prep time: 5 months (minimum)
Serves: 7 million+ Arizonans
Warning: May cause indigestion (fiscal and otherwise)
Ingredients
1 Executive Budget Proposal (from Gov. Hobbs)
1 JLBC Baseline Budget
1 divided Legislature (Republican majority)
4 competing caucus proposals
1 giant pot of formula-funded programs (AHCCCS, prisons, schools)
Heaping scoops of discretionary pork
A dash of optimism (optional)
Endless spreadsheets
Political brinkmanship (to taste)
Step 1: What does the governor want to make?
When you hear about the “governor’s budget,” we’re really talking about her budget proposal. Legislative Republicans will have one too, as will Democrats. Each of the four legislative caucuses might even craft its own budget proposal.
After the governor reveals her plan each January, Republicans skim it for anything spicy they can publicly reject.
This year, Hobbs announced she wants to spend $17.7 billion on things like childcare, public safety and housing affordability. Republicans were on board with some of her initiatives, like boosting border security funding, but not Hobbs’ plan to put income caps on who can get school vouchers. This was the third year she proposed cutting back vouchers, and the third year Republicans called it a nonstarter.
Hobbs updated her budget in March to reflect that school voucher spending will surpass $1 billion next fiscal year, and that the budget needs $48.4 million for vouchers in the current fiscal year.
Step 2: What are the must-have ingredients?
After the governor announces what she wants to spend the state’s money on, two separate groups of economists offer opinions on how much money Arizona has.
It’s kind of like deciding to make lasagna homemade or with store-bought ingredients: You have two very different lists to follow based on the recipe.
The politicians and economists projecting the state’s revenues offer different, constantly evolving opinions on the economy. Lawmakers can choose to budget based on revenues that are higher or lower than the economists’ projections.
The Joint Legislative Budget Committee advises the Legislature. It’s staffed by economic intellectuals who create a “baseline budget” as a starting point based on spending increases passed in prior years and predetermined formulas. There are must-have ingredients — the lasagna’s noodles and sauce — like formula-based spending for K-12 education, Medicaid and prisons.
The Governor’s Office of Strategic Planning & Budgeting is comprised of Hobbs’ staff who create their own revenue projections and write up her fiscal priorities for the state.
Like the JLBC, it starts with a baseline estimate. But this budget also includes how much money the executive branch wants to put toward specific policies.
Step 3: The budget roast
Lawmakers on the House and Senate appropriations committees hear presentations on the governor’s budget. This year’s hearings were extra spicy.
After that, there is usually a long lull in the budget action. Everyone is waiting for the more accurate, timely projections that JLBC comes up with in April.
This year, the JLBC warned that Arizona will have a lot less new revenue than originally projected — President Donald Trump’s tariffs threw the economy into a tailspin — but they revised those projections slightly after individual income taxes came in higher than expected in April.
Economists warned lawmakers not to count on that extra revenue, but to treat it as a one-time spending opportunity. And they’re still urging cautious budgeting: Although a federal court shut down Trump’s tariffs (thanks to a lawsuit led by Arizona Attorney General Kris Mayes), the federal budget bill making its way through Congress shifts a lot of expenses to states.
Step 4: Stir in the pork
This is the fun part for Arizona’s lawmakers.
Leaders hold a series of three-way meetings between the governor, Senate President Warren Petersen and House Speaker Steve Montenegro in the proverbial “cage”1 where the three fight it out to come to some sort of final product that all parties can settle for.
Once that agreement becomes public, House and Senate leaders have to round up enough votes to pass it. The documents that outline spending usually get leaked to the press (often via lobbyists, who lawmakers share the documents with freely) and foster some (unintentional) public discourse.
The annual budget leak is a sign that the budget process is getting serious.
To whip up the 31 minimum votes in the House and 16 in the Senate, leaders can give a lawmaker’s bill a hearing, fund their pet projects or make other concessions. Think of them as the extra spices tuned to lawmakers’ preferred flavor profiles to make them sit down and eat.
In 2023, lawmakers put together a budget with widespread bipartisan support by giving lawmakers their own individual pots of money, up to $30 million each, to spend as they pleased in exchange for supporting the overall package.
Lawmakers overspent.
They had to fill a $1.3 billion gap the following year, but leaders still gave lawmaker-specific handouts to get the votes.
Democratic Reps. Myron Tsosie and Mae Peshlakai, who represent the Navajo Nation-based Legislative District 6, supported the budget after it included $2 million for the Navajo Nation.
Lawmaking sisters and Democratic Reps. Alma Hernandez and Consuelo Hernandez voted for last year’s budget after securing health and food distribution programs in Southern Arizona and $7 million for an Arizona Holocaust Education Center.
Step 5: Serve the budget bills
Legislative leaders only introduce budget bills after they believe they have enough votes to pass the deal outlined in the budget docs. Then they’ve got to ram the food down lawmakers’ throats before it gets cold.
Those budget bills are served in two main courses:
The General Appropriations Act is the main bill that supplies state agencies with their operating money from the state General Fund and comprises most of the budget’s allocations.
Budget reconciliation bills, or BRBs, cover more policy-specific areas connected to how the state spends funding buckets.
Those BRBs are often how we can tell whose votes were bought.
Step 6: Take a nap
Lawmakers sine die, or close out the session, after completing one of their only required tasks of passing a state budget.
While they’ve had a lot of time to rest on vacation, they’ll be able to take a break until next year. Most legislators have other gigs to beef up their income when they’re not in session.
Several lawmakers will turn their focus to 2026 election campaigns. Senate President Petersen is challenging Mayes for the attorney general spot, and Republican Rep. Alexander Kolodin is challenging Secretary of State Adrian Fontes. Others, like Gress, would be happy to sneak in a quick honeymoon and be reelected to their current gigs.
But even when lawmakers leave for the year, we’ll still be in your inboxes serving up important Arizona-based news. Add your line item to our budget reconciliation bill today.