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PHOENIX (AZFamily) — Gov. Katie Hobbs’ team is reviewing the newly passed budget that will fund state services for the next year.
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The bipartisan spending plan includes more than $18 billion to fund everything from legal fees for the fight over Colorado River water rights to emergency relief, childcare, education, and food assistance programs. It also includes tax breaks designed to keep more money in taxpayers’ pockets.
Hobbs’ team is going through the budget line by line to make sure nothing unexpected was slipped in at the last minute before her signature officially approves it.
Budget passed after months of negotiations
The Legislature passed a series of bills that make up the more than $18 billion budget for 2027 just before the end of the legislative session.
“They met in the middle at the end of the day when you look at the numbers,” said Marcus Dell’Artino, a Republican consultant.
Adam Kinsey, a Democratic consultant, said it was a consensus effort.
“A budget that nobody is thrilled with but everybody comes together on it’s a very consensus budget,” Kinsey said.
Tax cuts highlight budget agreement
Both sides of the aisle are touting a $1.4 billion tax cut for working-class families.
Hobbs is highlighting investments in job creation, education and water security, along with a moratorium on data center tax exemptions.
Republican lawmakers are celebrating that Arizona is now the only state fully adopting President Donald Trump’s federal tax package. The plan includes no state income tax on tips or overtime pay, plus a new deduction for childcare expenses and additional relief for seniors and veterans.
Mixed reactions from advocacy groups
Rebecca Gau, executive director of the nonprofit Stand for Children Arizona, had a lukewarm assessment of the budget.
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“Meh. My opinion is it’s OK. I think it could be better,” Gau said.
When asked if Arizona children are better or worse off because of the budget, Gau said they may be “net neutral, possibly slightly worse off.”
Gau said the child tax credit and some funding for childcare subsidies are wins, but the funding is not enough to end the waitlist of thousands of parents in need of childcare.
“The childcare subsidies do that. They help low-income families when parents are going back to school and when they want to go to work. So why wouldn’t we give $160 million to support the workforce infrastructure when we give billions of dollars just for data centers?” Gau said.
Gau also questioned why previously funded programs she considers low-cost and high-impact were left out, like the 9th Grade on Track project.
“We significantly increased the graduation rate. We significantly reduced chronic absenteeism rates. We increased the rates at which kids can take technical education and job related, job training classes. That was not in this budget this year,” Gau said.
Additional budget allocations
The state’s school voucher program is shielded from cuts. Millions are also allocated for border security, wildfire suppression and free school meals.
Hobbs is expected to sign the budget on Saturday.
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