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

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

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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AZFEC: Negotiating With Hobbs On Prop 123 Would Be A Major Self-Own By Legislative Republicans

AZFEC: Negotiating With Hobbs On Prop 123 Would Be A Major Self-Own By Legislative Republicans

By the Arizona Free Enterprise Club |

Katie Hobbs would love nothing more than for Republicans at the legislature to start wheeling and dealing on Prop 123, the roughly $300M per year K-12 funding stream from Arizona’s State Land Trust.  

Republicans should not even entertain it. 

In fact, negotiating over Prop 123 now would amount to a political self-own of the highest order. 

Prior to 2025, the argument for extending Prop 123 was the imminent “funding cliff” for school districts because the distributions from the land trust to K-12, which were temporarily increased for a period of 10 years, were set to expire. But lawmakers addressed this concern when they increased K-12 funding from the general fund a few years ago in the amount districts were receiving from the trust.  

Last year, there were discussions about initiating a new 123 enhanced distribution, but only if it included significant education reforms, one of which involved constitutionally protecting school choice programs in the state. Outside of these types of reforms, there is no reason for Republicans to even be discussing any plan that involves dumping hundreds of millions into K-12 with no strings attached. 

Yet somehow the conversation has been resurrected…

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AZFEC: Cities Penalize Retailers For Their Own Stolen Property

AZFEC: Cities Penalize Retailers For Their Own Stolen Property

By the Arizona Free Enterprise Club |

While some legislators are working to keep California-style policies out of Arizona, corrupt municipal leaders in cities such as Phoenix and Tucson clearly haven’t gotten the memo. For years, these cities have subjected businesses to an unfair fee for their own shopping carts being stolen. Rather than targeting theft, homelessness, or law enforcement strategies, this policy shifts blame onto retailers, effectively punishing the victims. A classic California-esque idea infecting our Arizona cities. 

Representative Nick Kupper introduced HB2460 this legislative session to combat this insanity and introduce some common sense. This bill prevents local governments from fining retailers over abandoned movable property, such as shopping carts and handheld baskets. Retailers already lose money from cart theft; charging them to reclaim their own stolen property is ridiculous. 

This type of policy is the definition of “California-ing Arizona.” California has regulated abandoned shopping carts for decades, with state law dating back to 1992 authorizing cities to penalize retailers when carts are not retrieved from public spaces. Tucson and Phoenix are now following in those footsteps…

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AZFEC: Hobbs Has No Plan To Reduce Prices At The Pump

AZFEC: Hobbs Has No Plan To Reduce Prices At The Pump

By the Arizona Free Enterprise Club |

For Maricopa County motorists, high gasoline prices are no longer an occasional inconvenience but a recurring hit to their wallets.  

The story is the same every year. Every summer as temperatures rise, prices at the pump jump as well, often by as much as fifty cents per gallon in Maricopa County. Yet these price fluctuations, as frustrating as they have been for drivers, may soon look mild compared to what’s coming.  

Arizona’s Historic Fuel Problem Will Only Get Worse In the Future  

Arizona’s chronically high gas prices have been driven by two key factors. The first is that Maricopa County is required to use a specialized “clean burning gasoline” (CBG) blend that only a handful of refineries from around the country can produce. Compounding this issue is that Arizona does not have any in-state refining capacity of our own, making us reliant on imported refined fuel from high-cost California. 

These complications have made our state vulnerable to price shocks. In 2003, a major pipeline failure limited gasoline shipments into Arizona and caused immediate price spikes and shortages.  

In 2022, while gas prices did increase throughout the nation due to the Russian invasion of Ukraine, Maricopa County motorists were hit with significant price spikes, and consistently paid far above the national average. In 2023 and again in 2024, price volatility in Phoenix surged even when national averages stabilized.  

And now this problem is only going to get worse…

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