by Matthew Holloway | May 5, 2026 | Economy, News
By Matthew Holloway |
Arizona Senate Republicans announced on Monday that they passed a $17.9 billion budget for fiscal year 2027 that includes $1.45 billion in tax relief over four years and spends approximately $800 million less than Governor Katie Hobbs’ proposal.
The budget, approved by the Legislature and sent to Hobbs, is based on updated April revenue projections that showed a $200 million decrease in available resources.
According to Senate Republicans, the plan includes a series of tax changes intended to provide cost-of-living relief, including eliminating state taxes on tips and overtime pay, increasing the standard deduction, allowing full deductions for child-care expenses, increasing the dependent tax credit by $25, and creating a $6,000 deduction for seniors age 60 and older with retirement or pension income.
The proposal also includes conformity with federal tax policy changes associated with Donald Trump’s tax cuts, which the Senate said would ensure Arizona taxpayers do not need to refile their 2025 state tax returns.
“This is a serious, disciplined budget that puts Arizona families first,” Senate President Warren Petersen (R-LD14) said in a statement. “We cut taxes, protect essential services, and base every decision on real April revenue projections — not wishful thinking.”
He added, “In divided government, we faced the math, eliminated waste through targeted reforms, and delivered real results without raising taxes or growing government.”
The budget maintains current funding levels for K-12 education and public safety, preserves the voter-protected K-12 State Land Trust, and limits overall spending growth to 1.9 percent.
To address the projected shortfall, Senate Republicans said the plan includes policy changes aimed at reducing spending, including enhanced eligibility verification in public assistance programs such as the Arizona Health Care Cost Containment System (AHCCCS) and the Supplemental Nutrition Assistance Program (SNAP), a 5% reduction in agency operating budgets excluding public safety and child welfare agencies, and the repeal of certain tax credits and subsidies, including solar incentives.
The budget does not reduce base pay for Arizona Department of Public Safety troopers or firefighters and does not modify existing data center incentives previously signed into law.
The plan also includes $4.75 million in emergency funding for the Department of Public Safety, which Senate Republicans said the agency had requested and that the governor had previously vetoed as a standalone bill.
The Arizona Senate Republican Caucus said the budget reflects the constraints of divided government and relies on no new taxes or fees.
“This budget reflects the reality of divided government,” Petersen said. “While Democrats were on the floor today saying we need to raise taxes, we are instead delivering historic tax relief without burdening taxpayers. Your business and your wallet are on the ballot this fall. Vote wisely.”
The proposal now awaits Hobbs’ action.
House Speaker Steve Montenegro (R-LD29), Petersen, and other legislative Republican leaders are scheduled to hold a press conference on Tuesday at 1 p.m., according to a media advisory, to highlight the budget and urge Hobbs to sign the legislation.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Matthew Holloway | May 4, 2026 | Economy, News
By Matthew Holloway |
Arizona’s affordable housing shortage is primarily the result of years of underbuilding after the Great Recession, not the rise of short-term rental (STR) platforms like Airbnb, according to a new report from the Common Sense Institute.
The report, titled “Home Prices, the Great Recession, and the Sharing Economy: Evidence from Arizona and Airbnb,” found that Arizona homebuilders sharply reduced construction following the 2008 housing crash and never returned to pre-recession levels, even as population growth resumed. Permit activity in Arizona fell from nearly 90,000 annual authorizations in 2005 to just 12,600 in 2010. By 2019, the state was still authorizing only about 45,000 new housing units per year, roughly half its pre-recession pace.
According to CSI, Arizona built roughly 38,000 fewer housing units per year between 2008 and 2023 than would have been needed to keep pace with long-term historical trends. Researchers concluded that this persistent gap in construction created a housing deficit that continues to drive up prices across the state.
While Airbnb and similar platforms have drawn criticism for reducing housing supply, the report found that short-term rentals account for only a small share of Arizona’s housing stock and are concentrated in tourism-heavy markets rather than spread evenly across the state. According to the Arizona Association of Realtors, CSI found “no observable statistical relationship” between the growth of short-term rentals and rising home prices across most Arizona communities.
The institute stated that under a new analysis examining “the underlying causes of Arizona’s housing shortage and the role of the short-term rental market,” it found “no consistent statistical relationship between short-term rental growth and home price appreciation across Arizona communities.”
CSI further observed that short-term rentals represent less than 2% of Arizona’s 3.3 million housing units and that, statewide over ten years, “there is no — and sometimes even a negative — relationship between home price increases and the concentration of STRs.”
The report notes that Arizona’s housing market never fully recovered from the collapse of the mid-2000s housing boom. Phoenix-area home values fell by more than 50 percent during the recession, foreclosures surged, and builders dramatically slowed new construction. Although Arizona’s economy and population later rebounded, homebuilding lagged far behind demand.
CSI estimated that as of the second quarter of 2025, Arizona faced an immediate housing shortage of roughly 52,800 units statewide. Using a broader, long-term measure, the organization estimated that the state’s housing supply was short by more than 121,000 units at the time. Maricopa County alone is projected to have a deficit of more than 34,700 homes.
Housing affordability remains a major issue for Arizona families. CSI estimates the average home in Arizona now costs more than $426,000, approximately $53,000 more than it would have if home prices had continued along their pre-pandemic trend. The organization estimates Arizona households now need an annual income of about $95,800 to afford the average home under conventional mortgage guidelines, or roughly 92% of the state’s average household income.
“Arizona’s housing challenge is fundamentally a supply issue,” Glenn Farley, Director of Policy and Research at Common Sense Institute, said in a statement. “Homebuilding slowed dramatically after the Great Recession and has struggled to catch back up, even as Arizona continued adding people and jobs. The data consistently show that when housing production falls behind demand, whether because of permitting constraints, construction slowdowns, or long-term underbuilding, prices rise. Expanding housing supply will be essential to improving affordability across the state.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Matthew Holloway | May 3, 2026 | News
By Matthew Holloway |
Governor Katie Hobbs was among several Democratic officials tied to a private, high-dollar fundraiser in Los Angeles in April, according to reports and an event invitation circulated on social media. The event included multiple figures viewed as potential 2028 presidential contenders.
An invitation shared on X by political consultant Drew Sexton showed Hobbs listed among multiple Democratic governors scheduled to appear at a Democratic Governors Association (DGA) reception in Los Angeles on April 23. The invitation also listed California Governor Gavin Newsom, Michigan Governor Gretchen Whitmer, Kentucky Governor Andy Beshear, Massachusetts Governor Maura Healey, Maryland Governor Wes Moore, Minnesota Governor Tim Walz, Kansas Governor Laura Kelly, and North Carolina Governor Josh Stein among the participants.
The event was hosted by Ellen Bronfman Hauptman and Andrew Hauptman, according to the invitation, and included contribution levels listed at $100,000 for hosts and $45,000 for “friends.” The location was listed as Los Angeles, with the specific address provided to attendees prior to the event.
The Los Angeles Times also identified Hobbs among the attendees at the gathering, describing it as a fundraiser that brought together several prominent Democratic figures considered potential 2028 presidential candidates.
A separate report from the New York Post described the event as a private gathering of major Democratic donors hosted at the home of a liquor heiress, where multiple potential presidential contenders met with contributors.
The invitation describes the gathering as a DGA reception, a type of event commonly used to raise funds and support Democratic gubernatorial candidates and initiatives. Participation by sitting governors and national political figures at such events is a routine part of party fundraising and political networking.
The fundraiser comes as Democratic officials across the country begin early-stage positioning ahead of the 2028 presidential election cycle, and amidst a tense Arizona gubernatorial election.
In his post to X, Sexton was critical of Hobbs’ decision to join Govs. Newsom and Walz at the California fundraiser, writing, “She loves taking California dollars, but she won’t do anything about gas prices for Arizonans.”
Details on the total amount raised, the full list of attendees, and how event funds will be allocated were not publicly disclosed.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Matthew Holloway | May 2, 2026 | Economy, News
By Matthew Holloway |
Arizona House Republicans announced passage of a state budget proposal this week, saying it delivers significant tax relief while reducing overall spending compared to Governor Katie Hobbs’ plan.
In a press release, House GOP leaders said the budget includes what they described as one of the largest tax cuts in Arizona history while maintaining funding for core government services.
The proposal has advanced through a series of budget-related bills in the House and Senate, including House Bill 4140, which implements key components of the fiscal year 2026–2027 budget.
According to the release, the proposal is designed to provide cost-of-living relief for families, seniors, workers, and small businesses and would spend approximately $800 million less than Hobbs’ budget.
Republican lawmakers said the plan maintains a balanced budget while prioritizing affordability, drawing a contrast with Hobbs’s budget plan.
“Arizona Republicans are delivering one of the largest tax cuts in state history, and our proposal has the votes to pass both chambers,” Arizona Senate President Warren Petersen (R-LD14) said in a statement.
“For months, Governor Hobbs told us full conformity to federal tax relief, including tax cuts for tipped workers, hourly employees, seniors, and small business owners, was impossible. It’s not,” he continued. “Under President Trump, Washington delivered relief for working Americans, and Arizona Republicans are making sure our taxpayers receive those same Trump tax cuts here at home. Republicans balanced the budget with honest numbers, protected core priorities, and provided real relief for families still struggling with higher costs. Arizona is leading the nation as the only state we are aware of advancing the full Trump tax cuts into law. Despite the Governor’s stunts, Republicans stayed at work and got the job done for our citizens.”
The budget proposal comes amid an ongoing policy dispute between the Republican-controlled legislature and the governor over taxes and spending priorities. Earlier in the session, Republican leaders advanced tax proposals they described as among the largest in state history, while Hobbs outlined a separate approach focused on targeted relief and new revenue mechanisms.
Arizona House Speaker Steve Montenegro (R-LD29) said in a statement, “House and Senate Republicans put forward a serious budget built on facts, not wishful thinking.”
He added, “It delivers major tax relief, eases cost pressures on Arizona families, fully funds core state services, and spends far less than the Governor’s proposal. It does not rely on gimmicks, inflated projections, or money that may never show up to balance the budget. In divided government, responsible leadership means facing the math, making hard choices, and protecting taxpayers. Republicans have done that, putting a workable budget on the table and giving Arizona a clear path to finish the session responsibly. The proposal is ready to move, and so is the Legislature. It is time to pass the bills and deliver for Arizona.”
In a post on X, Montenegro and Petersen said the proposal delivers tax relief, reduces spending, and fully funds core state services.
Additional details on specific tax provisions and final budget allocations are expected to be addressed as the proposal moves through the legislative process and negotiations continue with the governor’s office.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Matthew Holloway | May 2, 2026 | News
By Matthew Holloway |
Arizona Republican Party Chairman Sergio Arellano criticized U.S. Sens. Mark Kelly and Ruben Gallego in a statement this week, alleging the two lawmakers have put First Amendment protections at risk by opposing funding for the United States Secret Service.
The statement from the Arizona Republican Party followed an incident at the White House Correspondents’ Dinner in Washington, D.C., on April 25, which led to a suspect being charged with attempting to assassinate the president.
Arellano criticized media coverage of President Donald Trump as well as the two senators, writing that “while the fake news has created the environment that has fostered four unsuccessful assassination attempts against President Donald Trump, it is Arizona’s two senators, Ruben Gallego and Mark Kelly, who are ultimately responsible because they have continually refused to approve funding for the Secret Service.”
He argued that the senators’ actions jeopardize constitutional protections, including those outlined in the First Amendment.
“Like me, both men swore an oath to protect and defend the Constitution when they entered the Armed Services, and most of us veterans know intimately that ‘freedom isn’t free,’” Arellano said. “It appears that either Senators Kelly and Gallego don’t understand that basic concept, or they have willingly violated their oath to protect and defend the Constitution, including the First Amendment, which was under attack Saturday night.”
In January 2026, both senators were among Democrats who voted to block a Department of Homeland Security funding measure amid ongoing negotiations over immigration enforcement policies.
At the time, Gallego said he would not support additional DHS funding without changes to how immigration enforcement agencies operate, while Kelly also indicated opposition to the funding bill under consideration.
The Department of Homeland Security includes multiple agencies, including the Secret Service, Customs and Border Protection, and Immigration and Customs Enforcement. Congressional funding measures for DHS typically cover these agencies collectively rather than separately.
The AZGOP statement did not cite a specific vote or bill related solely to Secret Service funding.
The DOJ confirmed in a press release Monday that Cole Tomas Allen, 31, of Torrance, California, was charged with one count of attempting to assassinate the President of the United States, transportation of a firearm and ammunition in interstate commerce with intent to commit a felony, and discharge of a firearm during a crime of violence.
As of publication, neither Kelly nor Gallego had publicly responded to the AZGOP statement.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
