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AZ Legislative Update – Legislature Hopes to Adjourn This Week As Budget Battle Heats Up

Posted by [email protected] on Jun. 16, 2025  /  Subscribe 0

Late Friday evening, Arizona House Republicans advanced a $17.3 billion FY 2026 budget package. The bills passed 31–0, with all 27 Democrats absent and just the minimum GOP support. Two Republicans, Representative Wilmeth and Representative Lopez, were absent. 

The House’s budget was developed without input from Democrats, the Senate, or Governor Hobbs. The Governor called the House budget, “dead on arrival,” citing deep cuts to Medicaid, underfunded K‑12 education, and no support for her childcare affordability plan. 

Highlights of the GOP House budget included: 

• 5% pay raise for DPS officers and correctional staff 
• $94 million for major infrastructure like I‑10 and Hwy 347
• 2.5% tuition cut followed by a three-year freeze at public universities
• Full funding for school choice/ESA programs, clearing the ESA application backlog
• Expanded Parents as Paid Caregivers, developmental disabilities services
• New election funding, and an enhanced adoption tax deduction
• Business relief via elimination of personal property tax under $500k  

While the House plan now goes to the Senate, it will not be considered by the body.  The Senate is expected to unveil its own budget proposal today which was negotiated with Governor Hobbs and legislative Democrats.

The Senate budget will be heard in the Appropriations Committee tomorrow morning and it is expected to pass out of the Senate later in the week with bipartisan support. 

While House Republican leadership prefer their version of the budget, we do anticipate that there should be enough support and political pressure to get the bipartisan Senate version through the House later in the week and hopefully end the session, sine die. 

The FY 2026 budget needs to be approved by June 30^th,  ahead of the start of the fiscal year, to avoid a government shutdown. 

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