The governor, a day after Republicans unveiled their “skinny budget,” said more work needs to be done and again criticized the state education voucher program.
PHOENIX — Arizona lawmakers spent Tuesday working to advance a Republican-backed state spending plan. Still, Democrat Gov. Katie Hobbs made it clear that negotiations are far from over—and hinted she may ultimately veto the proposal.
Speaking at a wide-ranging press conference in the Executive Tower at the Capitol, Hobbs addressed the ongoing budget debate, along with several other high-profile issues, including school funding, prison re-entry programs, and her recent trip to Mexico.
Earlier in the day, the governor highlighted two of her key priorities.
In south Phoenix, she joined community leaders to break ground on a new 168-unit affordable housing development aimed at expanding access for low- and middle-income residents. Shortly after, Hobbs at the Capitol turned her attention to criminal justice reform, promoting a work re-entry program designed to help formerly incarcerated individuals transition back into the workforce.
But much of the focus quickly shifted to the state budget.
Republican lawmakers have proposed what they call a “skinny budget,” which comes in roughly $800 million below the governor’s preferred $18.7 billion spending plan that includes new taxes and fees and more education funding.
The Republican proposal avoids cuts to some of the state’s largest and most sensitive areas, including public schools, public safety, prisons, and child welfare services. However, most other state agencies would be required to reduce their budgets by 5%.
Hobbs expressed cautious optimism about parts of the proposal but strongly criticized across-the-board agency cuts.
“There are some things I’m encouraged about in their proposal, but across-the-board agency cuts are not one of them,” Hobbs said. “We need to make these cuts strategically and smartly—not slash and burn.”
The governor also renewed her call for changes to Arizona’s Empowerment Scholarship Account (ESA) program, which allows families to use public funds for private and homeschool education. A recent 12News investigation found that some parents spent ESA funds on questionable purchases like iPhones, flat-screen TVs, and trips to Disneyland.
“This is a billion-dollar boondoggle,” Hobbs said. “Arizonans deserve to have their education dollars spent on educational purposes, not going to luxury expenditures like lingerie and vacations.”
Education funding remains a central sticking point in negotiations.
Hobbs is pushing to include renewed funding through Proposition 123, which previously directed money from the state land trust to public schools but expired last year.
“Quite honestly, we have a once-in-a-decade opportunity to direct a billion dollars into public education without raising taxes by a dime,” she said.
House Speaker Steve Montenegro told 12News the GOP plan would implement tax cuts that mirror President Trump’s tax relief from what he called the Big Beautiful Bill. The speaker said there would be no tax on tips or overtime, increased child tax credits, new deductions for childcare expenses, and retirement deductions for those 60 and older.
However, the plan makes cuts to social programs like Medicaid and SNAP or Food Stamps.
Meanwhile, the governor also addressed questions about her recent trip to Mexico City, which drew attention after a viral social media exchange in which she told someone asking about the trip’s funding: “It’s none of your business.”
On Tuesday, Hobbs clarified that the trip was part of a delegation of business leaders organized by the Arizona Hispanic Chamber of Commerce and aligned with her goal of strengthening ties with Mexico, Arizona’s largest trade partner.
She also noted that tickets to a Diamondbacks game during the trip were paid for using the state’s protocol fund.