Arizona House Republicans Pass FY2027 Budget Along Partisan Lines
Proposed Budget Would Have Severe Healthcare Implications
The Arizona House passed a fiscal year 2027 budget along partisan lines this week, spending roughly $800 million less than Gov. Hobbs' January proposal.
How the Budget Pays for Tax Cuts
The nearly $18 billion proposal fully conforms with H.R. 1 tax policy, funding those cuts primarily through a 5% reduction to nearly all state agencies — excluding the Department of Public Safety, Department of Corrections, and Department of Child Safety. Additional savings come from:
- $100 million in "government efficiencies" through streamlining and AI implementation
- $86 million in cuts to the Commerce Authority and Tucson's Rio Nuevo
- $76 million by eliminating solar tax credits and incentives
- Various other clawbacks
What's Not Included
The proposal does not include any "member funding asks" — typically the vehicle for targeted investments such as infrastructure and healthcare. It also does not address renewing Proposition 123, which funds public education through the state land trust.
Healthcare Provisions in the FY2027 Budget
For healthcare, the budget would:
- Claw back last year's graduate medical education (GME) appropriation
- Require the state to request a waiver from the Centers for Medicare & Medicaid Services (CMS) to limit Hospital Presumptive Eligibility to children and pregnant women
- Implement eligibility checks for the Arizona Health Care Cost Containment System (AHCCCS)
- Expand work requirements for the Supplemental Nutrition Assistance Program (SNAP)
What Happens Next
Gov. Hobbs has not publicly indicated how she would respond if this budget reached her desk, though signing it appears highly unlikely. House Speaker Steve Montenegro said the House is prepared to continue negotiations, while her press aide indicated the governor's office is still reviewing the proposal.
