katie hobbs
AZFEC: Chaos Katie Runs Away From Budget Negotiations…Now What?

April 1, 2026

By the Arizona Free Enterprise Club |

Leading under divided government is hard, but it does not excuse a governor from actually governing. Republican legislative leadership has held a clear and defensible line when it comes to the state’s budget: spend only the revenues the state actually has, provide full tax relief by implementing full conformity and don’t force Arizonans to file their taxes twice and pay more in the process. When Hobbs couldn’t move them off that position last week, she didn’t really explain why their position was unreasonable or come back with a new proposal. Instead, she walked away from the table

Recently, a rumor was circulating around the Capitol that the Governor and legislative leadership were discussing a deal to deliver conformity tax cuts and build the contours of the budget around a speculative state land trust ballot referral. Referring a Prop 123 extension would dump hundreds of millions of new dollars into district K-12 schools without any strings attached. By the end of last week, that balloon had popped, along with any credibility that Katie Hobbs knows how to lead. 

As governor, it is Katie Hobbs’ job to bring people together and solve difficult problems. Yet before the calendar has even turned to April (very early for budget season at the capitol), Governor Hobbs has already admitted that she is out of ideas. 

The Prop 123 Gimmick Was Never Going to Work 

Now that the budget breakdown has gone public, details of the Hobbs proposal have been released, and it was far worse than anyone had even thought. Under the Hobbs plan, Arizona’s entire budget would somehow hinge on the passage of a new Proposition 123 referral at the ballot in November…

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