A new data analysis.shows that Arizona is facing more of an affordability crisis than other states as the 2026 elections heats up.
Arizona households presently carry above-average debt across auto loans, credit cards, and mortgages. Arizonans are also falling behind on payments at rates well above the national average, according to new analysis by the Common Sense Institute (CSI).
In Arizona, CSI found that auto loan debt is 7% higher, credit card debt is 8% higher, and mortgage debt is 22% higher than the national average.
Arizona also sits at the bottom half of the nation in terms of average credit score, which is 666. The state ranks 30th overall, having fallen seven points in 2025 and experiencing the 10th-fastest drop in average household credit score among all states.
Arizona experienced the second-largest increase in per-capita debt out of 11 reported states. The state has experienced a rise in per-capita debt amounting to nearly 130% since 2003. Only Texas reported a worse increase in per capita debt, at 148%.
That metes out to an average per-capita household debt of $74,000. CSI reported that this average debt in Arizona has largely been driven by mortgage debt.
The same can be said for households elsewhere on that point. Nationally, household debt neared $20 trillion by the end of last year — much of that driven by mortgage debt ($13.2 trillion, an increase of 4.5%), followed by auto loans and student loan balances ($1.7 trillion respectively, reflecting increases of 0.7% and 3%) and credit card debt ($1.3 trillion, an increase of 5.5%).
Arizona didn’t lead by all negative metrics. Arizona’s higher education-related debt was 3% lower than the national average, and student loan debt was 8% lower than the national average.
And according to CSI, less than 23% of Arizona households have liquidity resilience, or ability to handle potential credit problems — far less than the average household nationwide. CSI attributed this to Arizonans possessing higher-than-average debt, higher delinquency, and a lower cash cushion than the average household in the nation.
The latest data from the Consumer Price Index also reflected that Arizona had more sluggish growth than the rest of the nation. Yet, Arizonans have been spending an average of more than $1,000 more per month than they would have if inflation had risen steadily at 2% since December 2020.
The average Phoenix-area household was spending about $6,900 per month as of June 2026, compared to the projected $5,800 under a 2% inflation trajectory.
In December 2020, the average Phoenix-area household was spending about $5,200.
The findings contrast with Gov. Katie Hobbs’ recent messaging on Arizona’s economy.
In April, Hobbs announced that Arizona ranked second in the nation for economic performance and fifth for economic outlook in the American Legislative Exchange Council’s annual Rich States, Poor States report. She also argued that her administration’s policies have lowered costs for working families.
A recent campaign ad from the Democrat incumbent governor cost her millions, but critics and past reporting indicate the ad is misleading and takes credit for work done by Republicans.
Gov. Katie Hobbs’ 30-second “Work” ad released last month claimed that she reduced electricity bills, cut red tape to build more affordable housing, and balanced the budget. Critics across the political spectrum assessed these claims as misleading.
Utility rates have increased by more than 25% under the Hobbs administration.
The Arizona Free Enterprise Club calculated based on Energy Information Administration data that utility rates in Arizona have increased by an average of 27% under Hobbs’ tenure. The Arizona Corporation Commission (ACC) sets rates.
The largest donor to Hobbs’ controversial inaugural fund, Arizona Public Service, also wants to increase the utility rates by 14%. That ratemaking case is ongoing with the ACC.
The Hobbs administration imposed more red tape on housing construction that had the effect of imposing a housing moratorium. A court struck down that red tape earlier this year as an unlawful overreach in agency rulemaking, a ruling which has the potential to put Arizona taxpayers on the hook for over $1 billion in compensation claims.
One developer duo, Buckeye Tartesso I and II, already filed such a claim last September with the help of the Goldwater Institute. The duo is seeking over $320 million in compensation for lost value, an amount their demand letter claimed was a compilation of conservative, not maximum, estimates.
Budget talks were repeatedly called off and subjected to a bill moratorium by Hobbs as she tried to impose what Republican lawmakers characterized as unrealistic revenue assumptions, hidden tax increases, and cost-raising policies.
In the thick of budget talks earlier this year, House Speaker Steve Montenegro (R-LD29) commented that Hobbs’ budgeting style was reminiscent of the more liberal-style budgets coming out of California: fiscal approaches which increase government size and create inconsistencies within the tax system. Hobbs held out on securing tax conformity for months to align the Arizona tax code with many of the congressional changes passed under the One Big Beautiful Bill Act
Hobbs has been accused by bipartisan critics of turning her inheritance of a $2.5 billion surplus from former governor Doug Ducey into a $1.6 billion shortfall.
Last summer, a report by the Common Sense Institute Arizona found that state spending outpaced the $3.3 billion in revenues that emerged following the passage of the flat tax in 2023.
Per the Hobbs campaign, the ad buys required millions from her campaign coffers.
Additionally, the Hobbs campaign press release implied that the Spanish-speaking version of her “Work” ad, “No Se Rinde” (“Doesn’t Give Up”), was uniform in its messaging. However, the ads contained key differences that indicated an awareness of Arizona’s split demographics.
Both opened with a characterization of Hobbs’ background as a mother who worked multiple jobs and as a social worker, but differed distinctly in their portrayals of Hobbs’ approach to governance.
The English-speaking ad, “Work,” depicted Hobbs as a budget and policy expert with key wins in electricity bill and red tape cuts, and school lunch and community college scholarship expansions.
The English ad described Hobbs as working fast food and Uber jobs to make ends meet. It included the misleading claims that Hobbs was responsible for balancing the budget without raising taxes, reducing electricity bills, and cutting affordable housing red tape, along with the valid claims that she expanded school lunches and community college scholarships.
The Spanish version of the ad, “No Se Rinde,” depicted Hobbs as a social worker with key wins in medical debt forgiveness, medical cost cuts, and salary boosts. Hobbs forgave $30 million in medical debts early on in her administration.
The Spanish-speaking ad similarly characterized Hobbs as having a background as a working mother, but only highlighted her past Uber driving work and expanded on her time as a social worker as mainly aiding female domestic violence victims. The ad further diverged in describing Hobbs as responsible for canceling tens of millions in medical debt, reducing medical costs with discounts up to 80 percent, and raising salaries.
A Centers for Disease Control report published in 2024 suggested that Latino and Hispanic women have a disproportionately higher risk of experiencing domestic violence: one in three, indicating an occurrence average up to three times higher than white women.
Close to a quarter of all Latinos in Arizona are uninsured, as are nearly half of all illegal aliens, according to a 2022 research analysis from the Latino Policy & Politics Institute. Approximately 80% of Latino families in Arizona reported financial trouble according to recent polling by UnidosUS; nearly half of Latinos across Arizona, California, and Texas reported medical debt in a 2024 UnidosUS poll.
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The annual inflation rate in the Phoenix metropolitan area slowed to 2.8% in June, remaining below the national rate as falling energy prices and comparatively modest shelter-cost growth eased pressure on the region’s Consumer Price Index (CPI).
The Phoenix-area CPI increased 2.8% during the 12 months ending in June, down from 3% in April, according to a new Common Sense Institute (CSI) analysis of federal inflation data. National consumer prices increased 3.5% over the same annual period.
CSI attributed much of the local decline to energy prices, which fell 6.4% during June after increasing 26.5% between February and May. The earlier increase helped drive Phoenix’s annual inflation rate from 1.7% in February to 3% in April, according to CSI.
Inflation has slowed but prices are still much higher than they were five years ago.
Since June 2019, prices in the Phoenix metro have increased 33.4%, adding an estimated $1,673 per month to the budget of a typical Arizona household.
— Common Sense Institute Arizona (@CSInstituteAZ) July 15, 2026
Energy remained more expensive than it was one year earlier. The U.S. Bureau of Labor Statistics reported that Phoenix-area energy prices were up 14.1% year-over-year in June, while gasoline prices were 26.2% higher. The local energy index declined 4.4% over the two-month period ending in June, including a 10.7% decrease in gasoline prices.
Nationally, the CPI declined 0.4% from May to June on a seasonally adjusted basis, marking the largest monthly decrease since April 2020, according to the BLS national inflation report. The national energy index fell 5.7% during June, including a 9.7% decline in gasoline prices. National consumer prices remained 3.5% higher than one year earlier, while energy prices were up 15.7%.
Shelter costs also helped keep Phoenix inflation below the national rate. Shelter prices increased 1.4% year-over-year in the Phoenix area, compared with 3.3% nationally. CSI said home prices have cooled in Arizona during the past two years while national home prices continued to increase, reducing shelter’s contribution to Phoenix-area inflation.
CSI said the gap between Phoenix and national shelter inflation has narrowed during the past six months as housing markets elsewhere began to cool. When shelter costs are excluded, CPI growth in Phoenix and across the country is nearly identical, according to CSI.
Phoenix-area food prices increased 2.2% year-over-year in June. The local index excluding food and energy rose 2%, while the comparable national index increased 2.6%. CSI separately calculated that the Phoenix index for all items excluding energy increased 2% from the previous year, up from 1.7% in April.
Among the 23 metropolitan areas compared by CSI using the latest available BLS data, Phoenix recorded the fifth-slowest year-over-year inflation rate. The region had posted the fourth-slowest rate among the 14 metropolitan areas reporting April figures.
The recent slowdown follows several years of substantial price increases. CSI calculated that Phoenix-area prices have risen 33.4% since June 2019, compared with a 30.3% national increase. According to the institute, the increase is “adding approximately $1,673 in monthly expenses to the average Arizona household.”
From June 2024 through June 2026, cumulative Phoenix-area inflation was 3%, below the approximately 4% increase that would result from prices growing steadily at an annual rate of 2%, according to CSI.
CSI cautioned that changes in individual categories can have an outsized effect on the headline CPI because the index is a weighted average of price movements across goods and services. CSI identified volatile energy prices as a significant driver of both the local and national figures and estimated that alternative measures place the Phoenix area’s underlying inflation rate closer to 2% than the 2.8% headline figure.
Arizona taxpayers could face nearly $200 million in additional costs if the state fails to reduce its Supplemental Nutrition Assistance Program (SNAP) payment error rate in the coming years.
Data from the U.S. Department of Agriculture shows Arizona’s SNAP payment error rate reached 10.8% in Fiscal Year 2025, ranking 33rd nationally and rising from 8.84% in Fiscal Year 2024.
Under changes enacted through the One Big Beautiful Bill Act (H.R. 1), states with SNAP payment error rates below 6% by Fiscal Year 2028 will avoid cost-sharing requirements with the federal government.
States with error rates between 6-8% must provide a 5% match, those between 8-10% a 10% match, and states exceeding 10% a 15% match.
If Arizona’s error rate remains at 10.8% in Fiscal Year 2028, the state would be subject to the highest matching requirement.
Based on Fiscal Year 2025 figures, eight states recorded error rates below 6% (Idaho, Nebraska, Nevada, South Dakota, Utah, Vermont, Wisconsin, and Wyoming), while six fell between 6-8%. Another 16 states posted rates between 8-10%, and 20 states exceeded 10%.
Zach Milne, senior economist at Common Sense Institute Arizona said the state has a strong incentive to improve its performance.
Mile told The Center Square, “Improving program accuracy strengthens program integrity and helps the state avoid potentially significant federal cost-sharing penalties.”
He described Arizona’s elevated error rate as a relatively recent development, noting that the state’s rate stood at 5.2% in Fiscal Year 2019 — below the new federal threshold.
The Arizona Legislature passed several measures during the 2026 session aimed at lowering the state’s SNAP payment error rate, but they were vetoed by Governor Hobbs.
Senate Bill 1002 would have expanded eligibility verification tools for the Arizona Department of Economic Security, while Senate Bill 1331 proposed work requirements for SNAP recipients age 60 and younger.
Senate Bill 1334 would have barred the department from seeking work-requirement waivers for able-bodied adults without dependents. House Bill 2206 sought to require the state to reduce its SNAP payment error rate to below 3% by 2030.
In her veto messages, Hobbs argued that the legislation duplicated ongoing efforts by the Department of Economic Security to improve accuracy, including enhanced eligibility verification, additional staffing and training, and investments in technology.
“SNAP is the most robust and effective anti-hunger tool we have in Arizona-I know this firsthand,” Hobbs said in her veto letter of the three Senate Bills. “It’s also the most secure, thanks to strong anti-fraud measures and oversight. Instead of creating more needless frustration for Arizona families, I invite you to join me in actually lowering costs for them.”
She also criticized H.R. 1 for imposing unfunded mandates that she said have strained agency resources, noting that she allocated $7.5 million to increase the department’s capacity. Hobbs maintained that the vetoed bills would have added further unfunded requirements without providing resources for implementation or modernization.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
Arizona’s unemployment rate has now hit a new high following the COVID-19 pandemic.
The state’s unemployment rate neared 5% according to a new data analysis report from the Common Sense Institute of Arizona (CSI). Based on this newly calculated rate, Arizona has the 12th-highest unemployment rate in the nation.
Unemployment hit 4.8% in May, with CSI saying broader data indicators have revealed the state’s labor market to be cooling despite job growth.
The addition of 2,000 non-farm jobs in May put Arizona at 30th for national job growth. Overall, the nation experienced growth with the addition of 172,000 jobs.
As for job growth year-over-year, Arizona added over 21,200 jobs. That qualified the state as the 10th best in the nation for job growth year-over-year.
Mining jobs increased by about 1,300 over the past year. CSI attributed this growth to the increased demand for copper by electric vehicles, artificial intelligence technology, and data centers.
Manufacturing jobs also increased by 500 over the past year. Trade, transportation, and utility jobs declined by 1,600 over the past year.
Arizona’s labor participation also hit a post-pandemic milestone. The state’s labor force participation rate fell just below 61 percent: the lowest level seen since 2020. Last May, the labor force participation rate was over 62 percent.
Along with rising unemployment and compressed labor participation, Arizona’s private-sector wages increased by over three percent over the year to $35.78. However, that total lags behind the national average of $37.53.
Arizonans may have felt these changes to Arizona’s employment climate more acutely due to major year-over-year changes with state spending.
CSI attributed the state’s budget shortfall to overspending.
Another recent analysis released earlier this month by CSI found that the state budget has experienced rapid growth over the past decade.
In just 10 years, the state budget doubled and now amounts to more than 10% of the state’s gross domestic product.
Per CSI, spending pressures have remained elevated despite normalized revenue growth.
Some items that CSI said to blame were the disparities between Arizona Health Care Cost Containment System (AHCCCS) enrollment and member costs, elevated demands from the Development Disabilities Program (DDP), and federal payment error rates impacting Supplemental Nutrition Assistance Program (SNAP) obligations.
AHCCCS enrollment fell by about 10% (over 200,000 people) but average per-member costs increased by 14%.
DDP was projected to require an additional $400 million in state spending by next year.
And the state may have to cover $300 million in annual SNAP cost-sharing obligations should federal payment error rates fail to be reduced in the near future.
Total state spending reached over $70 billion in the 2026 fiscal year, and estimates projected spending to approach $75 billion in the 2027 fiscal year. Of the 2026 fiscal year total state spending, close to $50 billion is expected to come from non-appropriated funds.
CSI found that spending not subject to regular legislative appropriations has grown by more than 150% over the past decade, though appropriated spending grew by about 100%.
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