Hobbs halts budget talks and calls for Republicans to negotiation on Prop. 123
Add Axios as your preferred source to
see more of our stories on Google.
Gov. Katie Hobbs halted budget negotiations with Republican leaders. Photo: Jeremy Duda/Axios
State budget talks are at an impasse after Gov. Katie Hobbs halted negotiations with Republican legislative leaders over disagreements on education funding and taxes.
Why it matters: Hobbs and Republican lawmakers have until June 30 to decide how to spend around $17 billion next fiscal year, and their budget blow-up suggests it could take them until then to reach an agreement.
- Sen. J.D. Mesnard (R-Chandler) told Axios he doesn't expect an agreement until late June.
The big picture: Budget agreements between the Democratic governor and Republican-controlled Legislature have proven difficult to reach in recent years.
- The state came uncomfortably close to a government shutdown last year.
Driving the news: Hobbs on Friday announced the suspension of talks until GOP lawmakers present a budget plan. She also criticized them for refusing to discuss the continuation of Proposition 123, a 10-year education funding program that provided several hundred million annually, and that expired in 2025.
- The governor's office also accused Republicans of having no way to pay for their tax conformity plan.
The other side: Senate President Warren Petersen (R-Gilbert) and House Speaker Steve Montenegro (R-Goodyear) accused Hobbs of "political theater" and said she ended negotiations "despite a path forward being within reach."
- They said they'll spend the next several weeks crafting a budget.
The intrigue: Hobbs wants discussions over Prop. 123, which she has little leverage over, to be part of budget negotiations, where her role is critical.
- The two sides have repeatedly clashed over how much money Prop. 123 should take from the state land trust and how the money should be spent.
Between the lines: Sen. John Kavanagh (R-Fountain Hills), who chairs the Senate Appropriations Committee, told Axios the budget and Prop. 123 are separate issues and shouldn't be negotiated together.
- There isn't a GOP consensus on Prop. 123 — some Republicans want to include protections for school choice, including the controversial Empowerment Scholarship Account program — and Kavanagh was skeptical there are enough votes to put it on the November ballot.