Gov. Katie Hobbs will likely have a tough fight with GOP lawmakers over tax cuts and other issues as she goes into what could be her final legislative session. Photo: Rebecca Noble/Getty Images
Gov. Katie Hobbs will push middle-class tax relief and affordability, along with new fees on data centers and short-term rentals in what could be her final legislative session.
State of play: The governor wants her tax cuts, not the full conformity favored by legislative Republicans, to be the first bill on her desk.
She also plans to limit her cuts to those who take the standard deduction — her administration says that covers about 88% of Arizonans — along with exemptions for tips and overtime pay, and an additional deduction for seniors.
The plan would cost between $220 million and $250 million, she said.
Hobbs left the door open to additional Republican-backed cuts, saying that could be negotiated later as part of the broader budget.
And she said Republicans will have to show how the state can pay for them without cutting vital services.
Zoom in: Hobbs' other priorities include:
A new water fee on data centers, which would provide up to $6.5 million annually for conservation, and the elimination of an existing $38.5 million tax exemption.
A $3.50 nightly fee on short-term rentals, which would go into an Arizona Affordability Fund to help lower-income people pay for utilities, with extra revenue going into the state's Housing Trust Fund.
Creating a Housing Acceleration Fund, a public-private partnership that would use state bonding power to finance housing developments.
Yes, but: To increase taxes and fees, or eliminate any tax benefit, the Legislature has to muster a two-thirds vote, which is usually a tough sell to Republicans.
