California is poised to lose a significant portion of its oil refining capacity by the end of 2026, as Valero announced the closure of its Benicia refinery—its second largest in the state—just months after Phillips 66 declared plans to shut down its Los Angeles facility. Together, the closures will eliminate roughly 17.4% of California’s total refining output, a shift expected to ripple beyond state borders, potentially triggering gasoline price spikes and supply disruptions in neighboring Arizona and Nevada.
These developments come on the heels of new state regulations introduced under Governor Gavin Newsom, which impose strict oversight on refinery operations. The rules limit when refineries can conduct maintenance, mandate increased inventory storage, and aim to curb perceived “price manipulation.” However, the energy industry and regional leaders argue these measures are accelerating refinery shutdowns and undermining fuel stability across the Southwest.
California operates as an “energy island,” with limited ability to import refined fuel from other U.S. regions due to the federal Jones Act, which restricts domestic shipping to U.S.-built and -crewed vessels. With U.S. shipbuilding capacity far behind that of countries like China, domestic maritime transport remains scarce and costly. As a result, California will increasingly rely on foreign tanker ships for fuel imports—an emissions-intensive, volatile, and expensive solution.
Governor Newsom claims California’s high gas prices are due to refinery “price gouging,” despite his own administration’s lack of evidence. His regulatory push has faced bipartisan opposition, including a joint letter from Arizona Governor Katie Hobbs and Nevada Governor Joe Lombardo warning that new refinery laws could lead to “higher costs for consumers” in all three states. Chevron echoed this concern, stating that the regulations would increase both the likelihood and duration of fuel shortages, while permanently raising consumer prices.
Refineries in California are already operating at or near full capacity. With no new facilities planned—especially as the state pushes to ban new gas-powered car sales by 2035—any closure tightens supply margins. The upcoming shutdowns will reduce daily refining capacity to 1.34 million barrels, well below the state’s consumption level of 1.8 million barrels per day, necessitating a shortfall of over 140 million barrels per year.
Due to California’s requirement for a specialized gasoline blend, few out-of-state refiners can meet demand, further narrowing supply options. These vulnerabilities were recently exposed when the temporary shutdown of the Martinez refinery sent gas prices soaring across the region, including in Arizona and Nevada.
With California gas prices already the nation’s highest—averaging $4.86 per gallon—experts warn that future supply shocks could bring about even more dramatic volatility and potential fuel shortages across the Southwest.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
Despite recent claims of financial strain, Arizona cities are experiencing robust revenue growth, according to the Arizona Tax Research Association’s (ATRA) April 2025 newsletter. The report highlights that municipalities have accumulated substantial cash reserves, even as some city officials advocate for tax increases.
ATRA’s analysis reveals that for Fiscal Year (FY) 2025, Arizona cities collectively budgeted $9.1 billion for their general funds, with nearly $4.2 billion—approximately 47%—allocated to cash reserves. This financial strength is attributed to consistent growth in sales and income tax revenues, bolstered by legislative changes and economic factors.
A significant contributor to this revenue surge is the 2019 Wayfair legislation, which enabled Arizona to tax remote sales. This change led to a substantial increase in sales tax collections, with shared revenues to cities rising over 55% from $589 million in FY 2020 to $915.5 million in FY 2025. Projections indicate this figure will reach $918 million in FY 2026.
In addition to sales taxes, cities benefit from Urban Revenue Sharing (URS), which distributes a portion of state income taxes based on collections from two years prior. In FY 2025, URS allocations amounted to over $1.26 billion. However, this represents a 19% decrease from the previous year, primarily due to the implementation of a 2.5% flat income tax rate in FY 2024. To mitigate the impact on municipalities, the state increased the shared percentage from 15% to 18%.
Despite these strong revenue streams, some city leaders cite recent state tax reforms—such as the 2021 personal income tax cut and the elimination of taxes on residential rents—as reasons to consider raising local taxes. ATRA cautions against this approach, emphasizing the importance of prudent fiscal management and the existing financial cushion that many cities possess.
The association’s findings suggest that while state-level tax policy changes have influenced revenue dynamics, Arizona cities continue to enjoy a favorable financial position. As discussions around taxation and budgeting persist, ATRA advocates for transparency and accountability in municipal fiscal practices.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
A new campaign, Yes for Glendale, has been launched in support of Propositions 401 and 402, two measures set to appear on the May 20 mail-in ballot. The propositions concern land use and zoning changes necessary for the completion of VAI Resort, a large-scale hospitality and entertainment project expected to generate over 2,000 jobs and contribute more than $2 billion in tax revenues.
Proposition 401 involves reclassifying a 10-acre parcel of land designated for VAI Resort’s corporate office to a “Corporate Commerce Center.” Proposition 402 amends the resort’s zoning plan to integrate this corporate office space within the broader project. Both measures were previously approved twice by the Glendale City Council.
Supporters argue that these changes will provide significant economic benefits, including job creation and increased tax revenues for local services. The campaign, chaired by VAI Resort President and CEO Grant Fisher, emphasizes the project’s potential to transform Glendale’s economy and entertainment landscape.
Despite receiving unanimous approval from the City Council, the measures were referred to the ballot by Worker Power, the political arm of UniteHere Local 11, a California-based labor organization. The group has raised concerns about labor conditions and worker representation within the project.
Proponents of the propositions contend that out-of-state activists are attempting to derail a beneficial project for Glendale. Fisher framed the opposition as a broader effort to impose policies that could negatively impact Arizona’s business environment.
The campaign has garnered support from numerous local leaders, including Glendale Mayor Jerry Weiers, Maricopa County Supervisor Debbie Lesko, and Speaker of the House Steve Montenegro, along with law enforcement and business organizations.
With Glendale voters set to decide the future of these land use changes, the debate is expected to continue over the coming weeks. More information on the Yes for Glendale campaign is available at yesforglendale.com.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
Glendale Mayor Jerry Weiers is enthusiastically supporting two upcoming ballot propositions for the city, which are set to be voted on in the May 20th special election.
The two propositions, Props 401 and 402, would reportedly affirm the Glendale City Council’s approval of a phase in the development of the VAI Resort near State Farm Stadium off the Loop 101.
Weiers, who with the unanimous support of the council has long been a proponent of the resort, said in a statement, “The VAI Resort project represents our city’s next step forward. This development will strengthen our economy, provide thousands of jobs, and increase city revenues to improve police, fire, infrastructure, and more.” He added, “The zoning amendments are necessary for the project’s success, and I encourage you to vote yes on Propositions 401 and 402. It is inappropriate to have an out-of-state union parachuting into our city to try to determine our future and attempt to cap our productivity.”
As previously reported by AZ Free News, the VAI Resort, along with other high profile developments in Glendale’s hospitality industry, have been challenged by a California special interest group that suffered a severe setback in the November election with the defeat of Proposition 499. The proposed ballot measure would have mandated “hotel and event center workers receive a $20.00 per hour minimum wage (increases annually), service charge payments and premium pay to be enforced by a newly created city department of labor responsible for investigating employer violations involving payment of wages, reporting, recordkeeping, and overtime requirements.”
According to Weiers, the same organization that brought Prop 499, the California-based group Worker Power, known to be affiliated with the labor union UniteHere, has unleashed activists to oppose the new propositions.
Worker Power has also led opposition to pro-immigration enforcement legislation in Arizona as recently as February. During the 2024 Presidential election, the group canvassed in Glendale to support Democrats Kamala Harris and Senator Ruben Gallego.
Yesterday we were out at the Capitol with other progressive groups to oppose SB1164! As long as lawmakers are targeting immigrants, we’ll keep coming back and reminding lawmakers that these terrible bills aren’t gonna work for us📢✊🪧 pic.twitter.com/cV5nrY2WC7
Proposition 401 and 402 Campaign Chairman Grant Fisher lauded the support from Weiers and the City Council saying, “Throughout the process to make the dream of VAI Resort a reality, there has been no greater champion for Glendale’s economic health than Mayor Weiers. We are proud to have Mayor Weiers as part of our coalition to bring thousands of new jobs and billions of dollars in new economic activity to Glendale, and we look forward to celebrating a win with him in May.”
The two propositions are largely administrative in nature, with 401 approving the unanimous City Council approval of a general plan amendment to allow the development of the VAI Resort and 402 confirming the unanimous zoning approval.
“Supporting this initiative means supporting a brighter, more prosperous future for Glendale. Let’s make the right choice. Please join me in voting YES on Propositions 401 and 402 on your mail-in ballot and send it in by May 13. Together, let’s say YES for Glendale!” Weiers told voters.
Congressman David Schweikert (R-AZ-01) raised an alarm about what he believes is the oncoming fiscal demise of the U.S. in a speech from the House floor.
Schweikert explained that a simple series of calculations “point to a shrinking labor force, and lack of young people in our society, and the reality that in 8 years, the United States will have MORE deaths than births,” citing the Congressional Budget Office (CBO).
"The fact of the matter is, and @RayDalio said it himself, there's a shortage of borrowable money in the world. We've run out of global savings. Our goal is stability, not collapse." – Chairman @RepDavidhttps://t.co/2dkQCJcYIG
— Joint Economic Committee Republicans (@JECRepublicans) March 26, 2025
The congressman’s speech coincided with the release of a devastating report from the CBO, which warned that the federal government’s capacity to borrow through “extraordinary measures” will be exhausted by the end of August or September.
Speaking to the House, Schweikert laid out the dire projections of the CBO report, as well as the remarkable insufficiency of the metrics the government is using, in the face of three unassailable facts: “debt, deficits and demographics:“
“I’m going to walk you through just how dangerous the game we are playing right now, because when you look at these charts — and this is online. Go on C.B.O. from last Friday. It’s not a hard read. Why are my brothers and sisters so terrified to tell the truth to the public? You have a country that — and I’m going to show the charts, that in 7 1/2 years we have more deaths than births. You have a country that, when we get out of the extraordinary measures…remember right now we are borrowing from different funds because we are up against the debt ceiling, we may be borrowing almost $70,000 every second of every day. For those of you who turn to me and say, ‘David, I demand you balance the budget.’ I could do it tomorrow. Lets’ see…if I use the 2024 numbers for every dollar we took in tax collections, we spend $1.39.
“Tell me the 39 cents you want me to cut. And the problem with that math is that when you look at the charts, you see what’s in blue. That’s everything a member of Congress gets to vote on, defense and nondefense. The only problem is. it’s 26% of the spending. So, if you ask a member of Congress right now to balance the budget, we can do it, we can do it. Gotta get rid of all defense, all non-defense, discretionary. That’s basically the park service, the EPA, all the agencies. And then tell me what portion…because you have to pay your interest or you blow up the world economy.
“Tell me what portion of social security, medicare, medicaid, other things you want to hack away at. The reality of it is, in this fiscal year, our projection is…for every dollar we take in tax collections, we are going to spend functionally $1.36.
“Do you understand how screwed—excuse me, yeah that’s the technical economic term— how SCREWED WE ARE when we don’t tell the truth about the math?
“And it is not fixable, but it is possible to stabilize. We can stabilize this. We just have to think and do things that are hard. So often around here, the thinking part is complex and it’s hard and we have to go home and tell our constituents the truth about math.
But remember, the math will win. How many have you heard about how people are protesting and terrified there are going to be cuts? Ok, let’s actually have a moment of truth about math. This was baseline. Over the next 10 years, we are going to spend $86 trillion. Next 10 years, CBO baseline, we are going to spend $86 trillion. The reconciliation budget had $1.3 trillion in cuts, and if we get lucky, we’ll get to $2 trillion over 10 years on $86 trillion of spending.
That’s what the left over here is losing their minds over because they need something. They have lost the working middle class. They’ve lost so much, and American voters no longer trust them because the spent decades not telling them the truth about the math. And it’s not hard, except the problem is 30% of that is borrowed. 30% of that is borrowed. And people are losing their mind that we are trying to cut $2 trillion on $86 trillion of spending. That’s what this place has become. This place has become a clown show of math.
“Think about this. We are functioning and going to spend about $7 trillion this fiscal year. We’re going to take in about $5 trillion. And this is in a time when the economy is good. We’re not in a pandemic. We’re not in a war. We’re not in a recession. And understand when you take some of these charts of interest exposure into the future, one of my charts, it shows in nine budget years interest, just interest is over $2 trillion a year. Just interest. Why aren’t we running around terrified here? If you care about your retirement or someone that’s crazy like my wife and I, we are older parents. I have a 2 1/2-year-old and a 9-year-old. You do realize for my 2 1/2-year-old, when he turns like 24 or 23, 25, every tax in the United States has to have been doubled just to maintain baseline services. This is the morality of this place.
“The United States and other countries are binging on debt. The United States borrows about 40% of all the world capital that goes into sovereign loans. His argument is, your problem is, there’s not enough savings in the world. We are consuming more money. China, Europe, now Germany’s going into the debt markets as they’re raising their spending caps. What happens in a world when there’s a shortage of borrowable money? Remember, every day when we borrow, what, $6 billion a day, functionally that debt has to be sold. Most of it’s actually financed domestically. You know, it’s in this pension, it’s in this bank…And then foreigners, except the foreigners have been lowering their U.S. Debt because they’re having to finance their own governments. And you start to look at our interest payments, and there’s this concept called a term premium. When we make the bond markets nervous, we pay a higher interest rate.”
Congressman Schweikert summarized the fiscal nightmare scenario saying, “And you look at the next 10 years, it’s the point I’m trying to make. Is, ok, here’s the growth. 24% of the growth in spending over the next 10 years is interest. 31% of the growth of spending over the next 10 years is Social Security and disability. 28% of the growth of spending over the next 10 years is Medicare. Other mandatory and discretionary growth, about 13%. But a portion of that is actually you think defense and other things in that. The fact of the matter is your government is an insurance company with an army.”
Arizona State Senator JD Mesnard (R-LD13) is looking to reduce the size of government and the state income tax burden on Arizonans with dual bills: SB1318 and SCR1014. Both bills, which are moving through the House after passing the Senate in February, would require the Arizona Department of Revenue (ADOR) to reduce the individual income tax rate by 50% of the structural surplus for each Taxable Year (TY). If SB1318 passes the legisalture and is vetoed by Democrat Governor Katie Hobbs, SCR104 would put the issue on the Arizona ballot.
Both bills would require the Joint Legislative Budget Committee (JLBC) to determine the surplus for each Fiscal Year (FY), which would then be used to pro-actively reduce the income tax rate by 50% of the surplus amount, passing the tax savings onto the taxpayer more immediately than the issuance of a tax dividend.
Mesnard has a history of pursuing tax cuts. He was one of the lawmakers responsible for the historic 2021 tax reform that brought a flat income tax rate of 2.5% to individual taxpayers in Arizona. He also authored SB1783 the same year which lowered taxes on small businesses.
As reported by the AZ Capitol Times, Democrat Gov. Katie Hobbs expressed her opposition to SB1318, however should she veto it, the legislature would send SCR1014 to the Secretary of State, who would submit this proposition to the voters at the next election. Comparing the bill to the 1992 ‘TABOR’ or the Taxpayers Bill of Rights instituted by Colorado, Hobbs said, “I’m not interested in tying our hands like that. No. Not like TABOR. No. That’s not tax relief. That is tying the hands of future administrations.”
During hearings in February, Mesnard explained, “This is a proposal to essentially strike a balance. When you have a surplus, let’s split it between giving money to taxpayers and the other half allocating towards whatever you want.”
Democrat Sen. Brian Fernandez described the bill as an effort to “handcuff us so we can’t make decisions during a budget (negotiation).”
Mesnard responded, “So, ‘handcuff’; is an interesting choice of words. We can put parameters on ourselves. The voters put parameters on increasing taxes back in the 90s and also, more recently, when they’re on the ballot.”
