After weeks of political brinkmanship and competing proposals, Arizona lawmakers have approved a bipartisan state budget that combines Democratic Governor Katie Hobbs’ “Arizona Promise” priorities with over $100 million in conservative-driven spending cuts secured by House Republicans. The compromise averted a potential government shutdown.
The $16 billion spending package reflects a rare show of collaboration in a divided government, incorporating elements from both the governor’s agenda—focused on opportunity, affordability, and social services—and Republican demands for fiscal restraint, public safety funding, and government accountability.
“I am thrilled that the legislature passed the bipartisan and balanced Arizona Promise budget to expand opportunity, security, and freedom in our state,” Hobbs said in a statement. “We showed Arizonans what is possible when we are willing to reach across the aisle and deliver common sense solutions for the people of our state.”
House Republicans, meanwhile, emphasized that the final deal bears the mark of tough negotiations, resulting in meaningful structural reforms and a $100 million reduction in planned spending compared to earlier drafts.
“This revised budget isn’t the one we would have written,” said House Speaker Steve Montenegro. “But with time running out and the risk of a shutdown increasing, we fought for and secured serious improvements. We cut spending, added strong transparency requirements, and locked in public safety pay raises. Those changes matter.”
The final package maintains many of Hobbs’ original proposals while adopting Republican-backed amendments. “This was not a blank check,” said House Majority Leader Michael Carbone. “We held the line on conservative principles, cut unnecessary spending, and demanded accountability. This budget is better because of our efforts.”
While the Arizona Promise budget may carry the governor’s name, its final version reflects the realities of a politically split state government. The result is a package that funds long-term priorities across education, health care, infrastructure, and public safety, while also maintaining fiscal discipline and Republican values like limited government and transparency.
“We’ve led responsibly in a divided government,” Speaker Montenegro said. “We held the line, improved the bill, and protected the priorities of our voters.”
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
The Arizona House of Representatives passed a structurally balanced, conservative budget on Thursday, advancing a financial plan that focuses on strengthening public safety, reducing costs for families, and increasing government accountability.
Speaker Steve Montenegro (R-LD29) called the budget a reflection of voter priorities. “This budget delivers safe communities, strong families, and a government that works for the people — not the other way around,” he said. “It cuts tuition, raises pay for law enforcement, fixes critical roads, and reins in waste — all without raising taxes.”
Key components of the budget include a 5% pay raise for Department of Public Safety and corrections officers, $94 million for repairs to major highway infrastructure, and a 2.5% in-state university tuition reduction alongside a freeze for the subsequent two years. The budget also fully funds school choice programs and clears a backlog of Empowerment Scholarship Account applications.
Additional funding is designated to keep voter rolls accurate and up to date, fully fund payments for parents acting as caregivers, and provide developmental disability services. An expanded adoption tax deduction is also included.
“The House-passed budget puts the House Majority Plan into action,” Majority Leader Michael Carbone said. “We’re protecting opportunity by lowering costs for students and parents. We’re backing public safety with strong support for our law enforcement officers. And we’re holding government accountable by cutting waste and demanding better results — this is the kind of leadership Arizona voters asked for.”
Proud to negotiate a package of conservative wins like this for the @AZFreedomCaucus
I’m blessed to have the most conservative members of the legislature alongside me in this caucus
They’re fearless & willing to put everything on the line to serve the people of Arizona well 🇺🇸 https://t.co/Nhok25KzLH
Speaker Pro Tempore Neal Carter stressed the budget’s potential for boosting small business. “The House-passed budget gives long-overdue relief to Arizona’s small businesses by eliminating the administratively burdensome business personal property tax under the $500,000 threshold,” Carter said. “This helps local job creators grow, hire, and invest in their communities — and makes Arizona a more competitive place to do business.”
The budget package — HB2945 through HB2961 — now moves to the Senate for consideration.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
Arizona homeowners will soon have greater freedom to add accessory dwelling units (ADUs) to their properties, thanks to a new law aimed at easing housing constraints and expanding property rights across the state.
House Bill 2928, signed into law last week, was spearheaded by House Majority Leader Michael Carbone. The legislation establishes statewide rules that limit local governments’ ability to restrict ADUs—also known as casitas or guest houses—on lots zoned for single-family homes.
“Arizona homeowners should be able to use their property without being buried in red tape,” said Carbone. “Whether it’s for an aging parent, a young adult, or a rental opportunity, ADUs are a practical solution—and it’s time the law recognized that.”
Under HB 2928, counties must adopt consistent standards by January 1, 2026, or default provisions outlined in the law will automatically take effect. The bill bars local governments from imposing strict design standards, excessive parking requirements, or costly infrastructure upgrades that have historically made ADUs difficult to build.
Key provisions of the law include prohibiting rules that require a preexisting relationship between homeowners and ADU occupants; limiting fees and setback requirements that raise construction costs; and allowing both attached and detached ADUs by right on single-family lots.
The legislation includes carveouts for tribal lands, military zones, high-noise areas, and utility easements. It also permits counties to require septic evaluations where appropriate.
Supporters argue the measure is a meaningful step toward addressing Arizona’s housing affordability challenges. By enabling more flexible use of existing properties, lawmakers say the bill will help ease pressure on housing supply without large-scale development.
“This law gives homeowners more freedom, cuts through bureaucracy, and ensures Arizona families can thrive,” Carbone said.
The reform aligns with broader goals outlined in the House Republican Majority Plan, which emphasizes reducing government intervention and promoting individual rights.
As Arizona continues to experience rapid population growth, lawmakers on both sides of the aisle have expressed interest in finding creative housing solutions. ADUs—long used in other states as a way to increase density without altering neighborhood character—are increasingly seen as a tool to meet that demand.
With HB 2928 now law, the focus shifts to implementation, as counties work to meet the 2026 deadline for adopting the required rules.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
On Tuesday, House Democrats took to the House floor to recognize their invited families with disabilities to push the passage of HB2816, a bill to provide funding for the Department of Economic Security (DES). The agency runs out of funds in May.
The bill from Assistant Minority Leader Nancy Gutierrez appropriates $122.3 million in state general funds and nearly $403 million in developmental disabilities Medicaid expenditure authority funds to the DES for developmental disabilities program expenses.
House Democrats are shenanigating to try and bring forward for a floor vote Assistant Leader Nancy Gutierrez’s HB2816 to provide the supplemental funding to keep the program for developmentally disabled children and adults, and paid parental caregivers. Rather than support a… pic.twitter.com/lJ1VHS0mRC
HB2816 did not make it past introduction. However, that didn’t stop House Democrats from attempting to bypass regular processes to get it heard on the floor on Tuesday.
“Republicans are blocking needed supplemental funds to keep the program going past May,” said Arizona House Democrats.
At the risk of getting gaveled down if she mentions developmental disability funding or her bill to save the families who need it, Assistant Democratic Leader Nancy Gutierrez artfully argues against the Republican countermove to block her motion to bring her HB2816 to a floor… https://t.co/52V2zpnkJ1pic.twitter.com/nsBByuiyHe
House Minority Leader Oscar De Los Santos accused House Republicans of being against funding children’s disability services.
“Arizona House Republicans just KILLED the bill to fund lifesaving disability services for children with Down syndrome, autism, and other developmental disabilities. All while heartbroken families watched from the gallery,” said De Los Santos.
BREAKING: Arizona House Republicans just KILLED the bill to fund lifesaving disability services for children with Down syndrome, autism, and other developmental disabilities. All while heartbroken families watched from the gallery. pic.twitter.com/dD0BtYCLJA
House Republicans said Governor Katie Hobbs’ mismanagement was to blame for the budget shortfall and constricted timeline. Majority Leader Michael Carbone alleged to ABC15 that Hobbs had stretched disability services beyond their capabilities without the legislature’s consent.
“She expanded the scope and raised rates, all without the consent of the legislature of the necessary funding to meet her policy changes, and it now threatens the viability of the entire program,” said Carbone.
This wouldn’t be the only area of alleged mismanagement by Hobbs. House leaders addressed the pending shutdown of the Department of Child Safety’s Congregate Care program, which Speaker Steve Montenegro attributed to poor budgeting by Hobbs.
“The governor spends beyond her budget. She waits until it fails, and then she declares an emergency. In January, we were told by the governor’s staff that they needed supplemental funding for DCS,” said House Speaker Steve Montenegro in Monday’s press conference.
Hobbs’ spokesman, Christian Slater, said Republican lawmakers were “lying” about the governor’s budget handling. Slater accused Republicans of attempting 50 percent cuts to the Department of Developmental Disabilities.
“Governor Hobbs produced a balanced budget proposal that secures the border, raises pay for State Troopers and firefighters, combats Veterans homelessness and protects Arizonans with autism, cerebral palsy, and Down Syndrome,” said Slater. “Instead of showing Arizonans a budget plan of their own, Republican lawmakers have gone to the press to lie about the Governor’s budget, refused to enter negotiations, and are holding kids in foster care and Arizonans with disabilities hostage to their political games.”
NEW: Republican lawmakers are lying to their constituents instead of negotiating a budget. Today, we called on them to pass the Governor’s budget. And if they don’t like that, then they need to show Arizonans their plan. pic.twitter.com/KhFzrNlMS0
On Monday, Arizona House Republicans revealed that the Department of Child Safety’s (DCS) Congregate Care program is bound for bankruptcy in a week’s time and announced the creation of a House Ad Hoc Committee to investigate the responsibility of Democrat Governor Katie Hobbs for a series of fiscal failures.
Arizona House Speaker Steve Montenegro, joined by Majority Leader Michael Carbone, Majority Whip Julie Willoughby, Speaker Pro Tempore Neal Carter, and members of the House Republican Majority called out the governor directly. “This is not a simple oversight—it is gross financial mismanagement at the highest level,” said Speaker Montenegro. “Governor Hobbs has made a habit of overspending, ignoring reality, and then sounding the alarm only when disaster strikes. The difference here is that Arizona’s children will be the ones to suffer for her failures. That’s why I’m taking immediate action.”
The Speaker continued, “This is a pattern. Congregate Care is set to go bankrupt next week. The Governor’s mismanaged Developmental Disabilities program will collapse by the end of April. Her administration failed to budget for formula growth in AHCCCS for two years straight—racking up hundreds of millions in unaccounted costs. The list goes on. This is not leadership. This is incompetence.”
“The people of Arizona didn’t elect us to stand by while the Governor manufactures crisis after crisis. House Republicans will ensure accountability and enforce responsible budgeting, but we expect the Governor to take ownership of her failures. That starts with making her staff available to the Legislature so we can fully understand the depth of this mismanagement and pursue the right solutions. Governor Hobbs may be comfortable with chaos, but we are not.”
As reported by AZ Free News in February, Treasurer Kimberly Yee reported on the allegations against the Hobbs administration in a letter to Chairman of the Arizona House Appropriations Committee, Rep. David Livingston.
In a statement at the time, Livingston said, “I appreciate Treasurer Yee’s clarity in addressing the financial mess Governor Hobbs has created. The issue isn’t ‘missing money’—it’s blatant mismanagement.”
“Under the Governor’s feckless leadership, state agencies are making massive spending decisions with zero legislative oversight, ballooning costs, and expecting taxpayers to foot the bill. This kind of incompetence cannot stand.”
The release from Montenegro detailed that the House Ad Hoc Committee on Executive Budget Mismanagement will examine “how the Governor has consistently mismanaged the budget, ignored financial reality, and allowed critical services to reach the brink of collapse before taking action.”
The Speaker also directed the Chairman of the Joint Legislative Budget Committee to summon the Committee to order and instruct Governor Hobbs to redirect existing funds to handle the crisis and prevent harm to the children in DCS custody noting, “The Governor’s administration failed to spend wisely, and it is their responsibility to fix this situation—not the Legislature’s job to bail them out.”
