by Matthew Holloway | May 6, 2026 | News
By Matthew Holloway |
Arizona Gov. Katie Hobbs vetoed the Republican-backed state budget proposal Tuesday, calling the plan “unbalanced and reckless,” while Republican gubernatorial candidate Andy Biggs sharply criticized the decision and accused Hobbs of blocking tax relief efforts.
In a statement issued by the Governor’s Office, Hobbs said the GOP proposal would “default on our debt obligations, endanger vulnerable children, slash critical public safety funding, and pay for tax breaks to billionaires, data centers, and special interests by kicking Arizonans off their healthcare and taking food off their tables.”
The Republican proposal, passed by the Legislature largely along party lines, included tax cuts tied to federal tax conformity measures, reductions to agency spending, and changes to several state programs. The proposal would have implemented major portions of federal tax cuts adopted in last year’s federal legislation and reduced spending across most state agencies.
Legislative Republicans said the proposal spent roughly $800 million less than Hobbs’ January budget proposal.
The veto follows weeks of tension between Hobbs and Republican legislative leadership over budget negotiations and education funding. On April 13, Hobbs announced she would veto nearly all legislation sent to her desk until Republican lawmakers produced a budget proposal and returned to negotiations.
Following Hobbs’ veto on Tuesday, Congressman Andy Biggs’ (R-AZ05) gubernatorial campaign circulated a statement accusing the governor of repeatedly rejecting tax relief measures.
“The Veto Queen is at it again,” a graphic released by the campaign stated. “Katie Hobbs has now vetoed over $1 billion in tax relief for Arizona workers, families, and small businesses for the 3rd time in 5 months as our state’s affordability crisis deepens.”
Biggs also said he had previously worked on multiple state budgets during his tenure as president of the Arizona Senate.
“As a former State Senate President, I’ve written multiple state budgets and worked with different governors to put forward structurally sound and responsible budgets that protect public safety and allow Arizonans to keep more of their money,” Biggs stated.
“It takes patience, leadership, and a commitment to good-faith work between the governor and the Legislature. Katie Hobbs has shown she has none of those attributes, which is why she keeps falling back on simply vetoing bills and budgets. Arizonans deserve a leader with a vision, not vetoes. In November, we’ll make that change.”
Arizona House Speaker Steve Montenegro (R-LD29) also criticized Hobbs following the veto, accusing the governor of pursuing higher spending priorities.
“Once again Gov. Hobbs creates fiscal chaos for Arizona as she fights for her California-style budget,” Montenegro wrote in a post on X. “This budget focuses on what matters most to Arizona families, higher take-home pay, lower costs.”
“What we will not do is allow this governor to raise taxes and spend more for her programs on the backs of every family in Arizona,” Montenegro added.
Despite the veto, Hobbs’ office indicated negotiations could resume. According to KJZZ, the governor’s office said Hobbs had reached out to legislative leadership seeking additional budget meetings this week.
The Legislature adjourned after passing the proposal, with lawmakers expected to return in June unless leadership calls them back sooner. However, Arizona Senate President Warren Petersen (R-LD14) pushed back on claims that Republican lawmakers were taking an extended break following passage of the budget proposal.
Responding to a social media post by journalist Craig Harris stating that “The GOP-controlled Arizona Legislature is taking a one-month paid vacation,” Petersen wrote on X, “This is false, the Senate will be back on Monday and many members, myself included will be there every day this week.”
“The governor placed a moratorium on bills and we delivered a budget. There is no floor work to do,” Petersen added.
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 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 Steve Montenegro | May 4, 2026 | Opinion
By Arizona House Speaker Steve Montenegro |
Last week, the Arizona House of Representatives passed an Arizona First budget focused on increasing take-home pay, lowering costs, and protecting core services. The Arizona Senate is on track to approve it today. Governor Hobbs should sign it.
The fastest way to address an affordability crisis is simple: let people keep more of what they earn.
This budget returns $1.45 billion to taxpayers over the next three years. When government takes less, families keep more through bigger paychecks, larger refunds, and lower overall tax burdens.
Our plan raises the standard deduction so workers can keep more from each paycheck. It exempts tips and overtime pay so frontline workers see meaningful relief at tax time. It reduces the cost of raising a family by exempting childcare expenses from state taxes and increasing the per-child tax refund by 25%. And it supports seniors on fixed incomes by exempting retirement income for Arizonans age 60 and older.
The goal is straightforward: you keep more, and government takes less.
At a time when families are tightening their belts, government should do the same. Yet the governor’s proposal increased spending to $18.7 billion. The House budget spends $800 million less without compromising the core services Arizonans rely on. It reflects the same discipline families practice every day.
This plan shows that responsible leadership is still possible in divided government. It prioritizes stability, protects taxpayers, and delivers a balanced approach ahead of the new fiscal year.
It fully funds K-12 education with an inflation increase, provides $200 million for public school facility repairs, gives additional support to low-income students, and eliminates co-pays for reduced-price school meals. It protects the most vulnerable by funding congregate care within the Department of Child Safety, addressing rising costs for high-need individuals with developmental disabilities, and strengthening foster care support through community providers.
This is what responsible governing looks like: targeted tax relief, controlled spending, and a commitment to core priorities. It recognizes that affordability is not just a talking point. It is the defining issue for Arizona families.
Governor Hobbs now has a clear choice. She can embrace a balanced, responsible budget that lowers costs and delivers real relief. Or she can reject a plan that reflects the will of a divided government working in good faith.
The House has done its job. We cut taxes. We protected essential services. We kept spending in check.
For Arizona families feeling the strain of rising costs, this budget deserves the governor’s signature.
Steve Montenegro is the Speaker of the Arizona House of Representatives and serves Legislative District 29 in the West Valley, Goodyear, and Surprise. Follow him on X at @SteveMontenegro.
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 | Feb 14, 2026 | News
By Matthew Holloway |
In a 5-4 party-line vote Tuesday, the Republican-led Arizona House Ways and Means Committee advanced legislation that would temporarily freeze most municipal and county tax, fee, and utility rate increases for four years.
House Bill 4030 and House Concurrent Resolution 2052, sponsored by Committee Chair Justin Olson (R-LD10), would limit local government charges to levels approved in fiscal year 2025–2026 budgets for a four-year period beginning July 1, 2026, and ending June 30, 2030.
Under the proposal, cities and counties would be prohibited from raising existing fees or tax rates, creating new tax classifications, or expanding tax bases during the moratorium period. The measures would preserve voters’ authority to approve increases at the ballot box. HB 4030 would enact the moratorium through statute. HCR 2052 would refer the policy to voters at the next general election.
The legislation includes enforcement provisions aimed at preventing local governments from restructuring or renaming charges, altering rate schedules, or modifying classifications in a way that would effectively increase revenues beyond fiscal year 2025–2026 levels.
In a statement, Olson said the measures are intended to provide cost certainty for residents amid ongoing inflationary pressures.
“These bills do exactly what families expect when the cost of living keeps climbing: they stop government from reaching deeper into their pockets,” Olson said. “While Arizona families are cutting back, local governments should not be hiking fees, raising taxes, or quietly inflating utility bills. HB 4030 and HCR 2052 put a hard check on that behavior and give taxpayers certainty and relief.”
“This comes down to discipline and fairness,” Olson explained. “Local governments already approved their budgets. This bill just requires them to live within the revenues generated by existing tax rates. If a city or county wants more money, they can make their case to voters and earn the support of a strong supermajority. What they cannot do is quietly raise costs on families whose budgets are already stretched thin.”
The proposal also follows recent disputes between state lawmakers and municipal governments over local authority, including 2025 legislation involving Axon’s planned headquarters development in Scottsdale that resulted in the Legislature preempting certain local actions.
Arizona’s Constitution grants charter cities broad authority over local affairs, including taxation and fee structures, under its home-rule provisions (Arizona Constitution, Article XIII, Section 2). Arizona courts have historically recognized broad municipal autonomy in matters deemed “purely local,” as the Arizona Supreme Court noted in State ex rel. Brnovich v. City of Tucson (2017).
In recent years, several Arizona municipalities have approved utility and service rate increases, citing infrastructure needs and inflationary pressures. For example, the City of Phoenix approved water and wastewater rate adjustments in 2023 and 2024 to address infrastructure and operational costs, according to the City of Phoenix Water Services Department. Tucson Water has also adopted phased rate increases in recent budget cycles, per city rate information.
If approved by both chambers and signed by the governor, HB 4030 would take effect as statute. As a concurrent resolution, HCR 2052 would bypass the governor and instead be placed on the ballot for voter consideration. Both measures now advance to the full House.
Supporters argue the measure would provide temporary cost certainty for residents, while opponents of similar proposals in past sessions have raised concerns about potential constraints on municipal budgeting and infrastructure funding.
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.
