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 Staff Reporter | May 5, 2026 | News
By Staff Reporter |
Attorney General Kris Mayes defended the city of Phoenix’s new policy that prevents Immigration and Customs Enforcement (ICE) from entering city property without permission.
Mayes published a 17-page investigative report last week determining the city’s action doesn’t limit or restrict enforcement of federal immigration law.
In March, Phoenix City Council approved a resolution requiring law enforcement to obtain permission from the city prior to conducting operations on property owned or controlled by the city.
Mayes ruled that requiring the city to allow federal immigration enforcement access to city property was equivalent to requiring local cooperation with federal immigration enforcement, which the federal law does not require.
“With limited exceptions, federal law does not purport to compel the states’ participation in immigration enforcement, and therefore generally permits localities to refuse cooperation with immigration enforcement activities,” stated Mayes.
Further on in the report, Mayes determined that immigration enforcement would need to obtain a judicial warrant or consent to access non-public city property without permission. Mayes said law enforcement has ample freedom to carry out immigration enforcement on public property, namely public rights-of-way, the airport, and Phoenix Municipal Court.
“This means that federal immigration officials are not presumptively prohibited from staging an enforcement operation on, for example, Phoenix sidewalks, and need not seek the City Manager’s advanced approval before commencing such operations,” wrote Mayes. “In this way, the Regulation simply designates how the City will decide whether to grant the consent to access non-public areas of City-owned property that federal law already requires immigration officials to obtain; it delegates that decision to the City Manager, in consultation with the Police Chief.”
Copied on this report were Gov. Katie Hobbs, Secretary of State Adrian Fontes, Arizona Senate President Warren Petersen (R-LD14), Arizona House Speaker Steve Montenegro (R-LD29), and State Rep. Quang Nguyen (R-LD01). Nguyen requested the report; per state law, which triggers an investigation by the attorney general.
Another one of Mayes’ interpretations of the law as it relates to ICE has been widely contested.
The attorney general made the case in a January interview that individuals had justification for shooting masked ICE agents under Arizona’s “Stand Your Ground” law.
“It’s kind of a recipe for disaster. Because you have these masked federal officers with very little identification, sometimes no identification, wearing plain clothes and masks,” said Mayes. “[The] law says that if you reasonably believe your life is in danger and you’re in your house or your car or on your property that you could defend yourself with lethal force.”
Mayes’ defense for justified shootings of ICE agents sparked bipartisan controversy. Gov. Hobbs said it was “inappropriate,” possibly dangerous, and needed to be retracted. The new chairman of the Arizona Republican Party, Sergio Arellano, said it was “reckless” and a direct endangerment of law enforcement. Legislative leaders censured Mayes.
Amid the fallout over Mayes’ remarks, anti-ICE activists have taken to vandalizing the ICE Phoenix Field Office with death threats.
Last week Mayes filed a lawsuit against the Department of Homeland Security to stop its planned ICE detention facility in Surprise.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
by Ethan Faverino | May 5, 2026 | News
By Ethan Faverino |
The Arizona Republican Party announced the appointment of Greg Roeberg as its new Legal Counsel last week. An Arizona attorney, with nearly two decades of experience in business and government law, Roeberg has become one of the state’s leading voices on election integrity.
Moving to Arizona during law school, Roeberg established a law practice focused on business law, serving entrepreneurs and small businesses in the early years of his career. He holds an undergraduate degree in Economics and Government and a law degree from Georgetown University. He was admitted to the Arizona Bar in 2008.
Roeberg is a lifelong Republican and became deeply engaged in politics in 2016 serving on the Trump Presidential Inaugural Committee. He went on to support the Trump Campaign in 2020 with a focus on logistics and election law.
Following his recovery from a 2019 lymphoma diagnosis and successful chemotherapy treatment, Roeberg answered the call again in 2024, serving as Election Integrity Attorney for the Trump campaign in Arizona. He has since represented the Republican National Committee, President Trump, and Republican candidates across the state throughout the 2020, 2022, and 2024 election cycles.
“Greg Roeberg is one of the sharpest legal minds in Arizona, and we are incredibly fortunate to have him on our team,” stated AZGOP Chairman Sergio Arellano. “He has spent nearly twenty years building a distinguished legal and business career, and over the last three election cycles he has been on the front lines defending the integrity of our elections — standing up for President Trump, the RNC, and Republican candidates across this state.”
Earlier this cycle, Roeberg launched a campaign for Arizona Attorney General before stepping down to focus on what he called the most urgent priority of the year: protecting the integrity of Arizona’s elections.
“When Greg made the decision to step away from his own campaign for Attorney General to take on this role, it spoke volumes about his character and his commitment to Arizona,” added Arellano. “He is a fighter, a patriot, and exactly the leader our party needs at this moment. I am proud to welcome him as our Legal Counsel.”
“It’s an honor to serve the Arizona Republican Party and the millions of Arizonans who believe in free, fair, and secure elections,” said Roeberg. “After three election cycles in the trenches, I know what’s at stake in this state. I’m grateful to Chairman Arellano for his trust, and I’m ready to get to work alongside him and our grassroots team to protect the voice of every legal voter in Arizona.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Staff Reporter | May 4, 2026 | News
By Staff Reporter |
A timeline endeavoring to document Sen. Ruben Gallego’s friendship with the recently resigned congressman accused of rape, Eric Swalwell, has been released.
FOIAzona published the “day-by-day” timeline dating back to 2009, several years prior to the beginning of Gallego and Swalwell’s friendship. The researcher behind the report, Brian Anderson, said the timeline challenged Gallego’s claim that he never witnessed any improper behavior by Swalwell.
Swalwell resigned from Congress and suspended his campaign for California governor following accusations involving sexual assault and rape.
Gallego has repeatedly denied having ever observed or having any knowledge of Swalwell’s alleged misconduct. The senator did admit that he’d heard rumors over the years alluding to Swalwell’s flirtatiousness, but nothing further. Gallego pulled his endorsement of Swalwell, his longtime best friend, and urged his expulsion within the hour before Swalwell resigned.
Gallego served as the chairman of Swalwell’s brief presidential campaign in 2019, and has been supportive of Swalwell’s AI startup in the past year.
Two incidents tracked in 2009 and 2013 concerned, respectively, a harassment complaint filed against Gallego while he was still chief of staff to a city councilman by a former intern, and a sexual harassment complaint filed against Gallego while he was in the state legislature by two female Democratic lawmakers.
In that former instance, an intern claimed she lost her job as retaliation for filing two complaints about Gallego’s behavior. The city maintained that the intern was one of dozens of employees let go due to budget cuts.
In the latter instance, State Rep. Lydia Hernandez (D-LD24) and State Sen. Catherine Miranda (D-LD11) accused Gallego of issuing sexual remarks toward the pair.
The timeline tracked well over 200 days of interactions between Gallego and Swalwell. Most of the documented interactions occurred from 2015 onward.
Gallego and Swalwell became friends approximately 10 years ago. The timeline reflected some of their earliest interactions: a congressional campaign donation, launch of the Future Forum caucus, and frequent travels together across the country. The two also issued one of their first joint statements together by calling for a total bailout of all student loans.
Approximately a year-and-a-half into his friendship with Swalwell, Gallego filed for divorce from then-councilwoman, now-Mayor Kate Gallego about one month before she was due to give birth to their son in December 2016. The pair had been together for over 15 years.
According to court records first obtained by the Washington Free Beacon, Kate Gallego had not seen the divorce coming. The pair had been together since 2001, when they met at a date auction fundraiser for 9/11 first responders while attending Harvard University. They got engaged at the 2008 Democratic National Convention and married in 2010.
As AZ Free News reported earlier this month, Gallego also faced accusations of sexual misconduct. The senator was accused of engaging in sexual romps in the House office building’s basement storage rooms. Gallego has denied the allegations.
Rep. Anna Paulina Luna claimed an accuser of Gallego’s has planned to come forward with attorneys. That purported accuser has yet to materialize.
The fall from grace by Gallego’s best friend came days after the senator interviewed with press about his intentions to make a presidential run in 2028.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
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 Ethan Faverino | May 4, 2026 | Economy, News
By Ethan Faverino |
The Joint Economic Committee released its Monthly Expenditures Update for March 2026 alongside the advance estimate for first-quarter 2026 Gross Domestic Product (GDP), painting a picture of an economy experiencing above-target inflation alongside continued, albeit moderating, real consumption growth and accelerating nominal activity.
From February to March 2026, headline Personal Consumption Expenditures (PCE) price index inflation accelerated to 0.66%, up from 0.38% the prior month.
Core PCE inflation, which excludes volatile food and energy prices, rose 0.29% compared to 0.37% (durable goods +0.42%; nondurable goods +1.98%), while services inflation stood at 0.32%. Gasoline and other energy goods posted a sharp 19.23% month-over-month rise.
Real personal consumption expenditures (PCE) advanced 0.24% ($39.57 billion), in the period. Real spending on goods rose 0.55% ($31.34 billion), led by durable goods (+0.94% or $20.12 billion), while services spending increased a more modest 0.10% ($10.63 billion). The nominal personal savings rate declined 0.3 percentage points to 3.6%.
On the income side, headline personal income grew 0.56% ($149.22 billion). However, real disposable personal income per capita edged down 0.07%, indicating that after-tax income growth lagged behind price increases.
Year-over-year measures showed headline PCE inflation at 3.50% in March 2026 compared to March 2025—well above the Federal Reserve’s 2% target—while core PCE inflation registered 3.20%. Both figures accelerated from the prior year’s pace.
GDP Advance Estimate
In its Q1 2026 GDP Advance Estimate the Committee reported that real GDP increased at a 1.99% annualized rate from the fourth quarter of 2025. Current-dollar GDP rose 5.64% annualized, or $433.731 billion, reaching $31.856 trillion. The GDP deflator contributed approximately 3.6 percentage points to nominal growth.
Consumer spending contributed 1.1 percentage points to real GDP growth, while nonresidential fixed investment provided a strong 1.4 percentage point boost. Government spending added 0.7 points, and private inventories contributed 0.4 points. Net exports subtracted 1.3 points, and residential investment was a slight drag at -0.3 points.
Category highlights (Nominal PCE Levels, March 2026)
- Housing and utilities: $3,904.5 billion (17.86% of total)
- Health care: $3,741.3 billion (17.11%)
- Financial services and insurance: $1,822.6 billion (8.34%)
- Food and beverages: $1,547.8 billion (7.08%)
- Food services and accommodations: $1,526.4 billion (6.98%)
Notable year-over-year nominal increases included financial services and insurance (+10.46%), health care (+8.02%), and transportation services (+9.53%). Gasoline and other energy goods rose sharply both month-over-month (+19.23%) and year-over-year (20.97%).
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
