Governor Hobbs Issues Bill Moratorium Until Republicans Produce FY2027 Budget Plan
Veto Threat Stalls Legislation As Standoff Over K-12 Funding And AHCCCS Obligations Deepens
Governor Katie Hobbs announced this week that she will veto all bills that land on her desk until legislative Republicans release a budget plan for FY2027.
Hobbs: No Budget Proposal, No Bills
"The legislative majority needs to put forward their budget proposal and then join me at the negotiating table so we can pass a bipartisan, balanced budget just like we've done the past three years. But until the legislative majority shows us their plans for a balanced budget that works for middle-class Arizonans, their bills will be dead on arrival," Hobbs said in a statement.
K-12 Funding and Prop 123 Emerge as Key Sticking Points
Funding for K-12 education remains one of the stickiest dilemmas, with Governor Hobbs and legislative Democrats pushing for an extension of Prop 123, which allows the state to use state land trust funds to support public schools. The 2016 ballot proposition expired last year but was backfilled in the FY2026 budget. However, with increased pressure from tax conformity and financial obligations for AHCCCS and SNAP from H.R. 1, backfilling with state General Fund dollars is not as viable.
Republicans Signal Prop 123 Deal Is Dead
Legislative Republicans have indicated that the odds of finalizing a deal on Prop 123 in the budget are almost zero. "We do not think that's a responsible play. We're talking about a $300 million question mark that will have to be resolved at the ballot," said House Appropriations Vice Chair Matt Gress.
