Arizona GOP budget clears legislature on party-line votes, heads straight for Hobbs’s veto pen

The Arizona Senate voted along party lines Monday to pass a package of GOP budget bills that are now headed for a veto from the state’s Democratic governor. 

The Republicans who control the state legislature introduced their $17.9 billion budget package a week ago, touting its tax cuts and continuation of existing funding for K-12 education and public safety. The Arizona House of Representatives also voted along party lines on April 29 to approve the Republican budget, which Democrats panned as putting tax cuts for corporations over working class people in need. 

When the House of Representatives reconvenes on May 5, the chamber is expected to send the budget to Hobbs, who will veto it. 

“The House has done its job,” House Speaker Steve Montenegro said in a statement. “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.”

After the anticipated veto, legislative Republicans and Democrats, alongside Hobbs, will have to work together to create a negotiated budget that can pass both chambers with bipartisan support and get a signature from Hobbs by the June 30 deadline. 

Hobbs introduced her own budget plan in January, which Republicans criticized for relying on money that the state might not ever receive. That includes $300 million in Proposition 123 funding for K-12 education that would need to be approved by voters in November and more than $760 million from the federal government to reimburse the state for its work securing the border that could go to other states. 

Voters approved Prop. 123 in 2016, which increased the amount of money set aside from the state’s land trust for public schools. After Prop. 123 expired, last year’s budget bill used money from the general fund to backfill the $300 million. 

Hobbs walked away from budget negotiations more than a month ago after Republicans said that an extension of the $300 million school funding mechanism is off the table this year. 

Hobbs’s proposal includes about $800 million more in spending than the Republican plan, and would get rid of tax incentives for the data centers needed for generative artificial intelligence and would tax large sports betting operations at a higher rate. 

The Republican budget fully conforms with the tax cuts put in place via President Donald Trump’s “One Big Beautiful Bill” and would sweep money from numerous funds and make 5% cuts to most state agencies to pay for them. 

“The fastest way to address an affordability crisis is simple: let people keep more of what they earn,” Montenegro said in a statement. 

Democrats have deemed the GOP budget philosophy as “corporations first, Arizonans last,” but Republicans say that’s a lie. 

“This is a serious, disciplined budget that puts Arizona families first,” Senate President Warren Petersen said in a written statement. “We cut taxes, protect essential services, and base every decision on real April revenue projections — not wishful thinking.”

As both chambers discussed the GOP budget proposal over the last week, Democrats repeatedly pointed out that the decrease in revenue projections from January to April were largely due to the economic impacts of Trump’s war with Iran. 

Petersen said in his statement that some of the top accomplishments of the GOP budget were no state taxes on tips or overtime pay, a higher standard deduction, a deduction for childcare expenses and a $6,000 deduction for those 60 and older with retirement or pension income. 

But the budget also doubles down on increased restrictions and reporting requirements for the Supplemental Nutrition Assistance Program, formerly known as food stamps, and for the Arizona Health Care Cost Containment System, the state’s Medicaid program. 

More than 420,000 Arizonans have already lost access to SNAP since last July, as the state works to comply with federal requirements from President Donald Trump’s “One Big Beautiful Bill.” That number includes 180,000 children.

Before voting for the Republican budget package, Senate Majority Leader John Kavanagh, R-Fountain Hills, said that the new restrictions only cut people who don’t qualify. 

“We’re reforming entitlement programs to get people who are ineligible off of those programs,” he said. “When we began doing SNAP, food stamp checks, eligibility went down, enrollment went down 47%. That tells me that that system was rife with people who shouldn’t have been on it in the first place.” 

ProPublica recently reported that added bureaucracy and decreased staff, both due to the Big Beautiful Bill, have resulted in people who meet requirements being kicked off of SNAP in Arizona. 

Milt Liu, president and CEO of St. Mary’s Food Bank confirmed to the Arizona Mirror that demand for food from the bank’s 700 partners is up 15% in the last year, and one of the factors contributing to that increase is loss of SNAP benefits. 

“Our partners are hearing more stories about people in line having lost SNAP benefits,” Liu said. 

St. Mary’s doesn’t have the data to determine how much of that 15% increase is due to lost SNAP benefits. Other factors driving the increase include inflation of grocery prices, the increased cost of gas and unexpected costs like a funeral or car repair that families don’t have the savings to cover. 

The largest food bank in the state, St. Mary’s is still keeping up with demand, but food banks across the country don’t have the resources to make up for all of the anticipated SNAP cuts, Liu said. 

Sen. Theresa Hatathlie, D-Coal Mine Mesa, said she was hearing similar complaints from her constituents, including elderly people and families with children. 

Hatathlie said her constituents come to her saying, “‘I have no food. I can’t afford food.’”

“And these are everyday people, and to say that it’s waste and abuse — to just chalk it up to that, I think, is a huge lie,” she said. 

Adding to the always-difficult task of coming to consensus on a budget with divided government, is election-year politics. 

“This budget reflects the reality of divided government,” Petersen said in the statement. “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.” 

Senate Minority Leader Priya Sundareshan pointed out that Hobbs’s budget proposal also included tax cuts for working and middle class families, as well as no taxes on tips or overtime. 

“That’s not what we are objecting to, what we’re objecting to is an additional $200 million a year … in corporate handouts,” she said. “That’s what makes this budget, corporations first, Arizonans last.”

***CORRECTION: This story has been update with the correct spelling of Milt Liu’s name.