Arizona GOP Lawmakers Claim They Are Close To Budget Proposal After Governor's Moratorium

Republican negotiators say they are close to sending the governor a state budget, signaling a potential end to Gov. Katie Hobbs' recent bill moratorium.

Out of frustration and with no budget in hand, Hobbs declared on April 13 that she would reject any measure that made it to her desk until Republican lawmakers delivered her a proposal. That challenge was echoed by her spokesman Christian Slater on April 21, the 100th day of the legislative session.

"It has been a month since Governor Hobbs called on legislators to show their budget to the public, and Republican leadership has given Arizonans nothing but evasive answers and empty promises about their budget proposal," Slater said in a prepared statement. "It's time for Republican leadership to show the people of Arizona their plans and come back to the negotiating table to pass a bipartisan and balanced budget."

Now, less than two weeks after that announcement, GOP leaders say they are close to a plan.

Senate Appropriations, Transportation and Technology Committee Vice Chairman John Kavanagh, R-Fountain Hills, told the Arizona Capitol Times that it could come within the next "week or two," although he said he wouldn't be surprised if what's proposed is vetoed by the governor.

"This is an offer we're making to her. Short of lacing the tower water supply of psychedelic drugs, we expect there will be some changes," Kavanagh said.

Last week, Senate Pro Tempore T.J. Shope, R-Coolidge, also confirmed Republicans were aiming to get a budget done around the 100-day mark of the session.

The effort to coordinate a budget has been complicated by recent reports of lower-than-expected state revenue for January. The Joint Legislative Budget Committee's updated April 16 forecast now projects $378 million in available resources rather than the $577 million originally estimated last year, a nearly $200 million reduction which staff attributes to the ongoing U.S. conflict with Iran, disruptions in oil markets and changing consumer behavior.

The forecast does not take into account conforming the state's tax policy to President Donald Trump's One Big Beautiful Bill Act, an already-approved federal tax measure expected to reduce general fund revenue by more than $400 million if the state fully conforms.

Kavanagh said he expects the reduced revenue projections to have a minimal impact on budget negotiations since they're working with more than $17 billion.

"We hate to lose the estimate, but I think that is a transient loss," Kavanagh said.

Governor's Moratorium Stands Until Budget Is Public

Republicans have also signaled they don't intend to send a ballot referral to voters this year to renew Proposition 123, which Hobbs and Democrats have pushed as a way to free up about $300 million for the state budget. With Prop. 123 expired, the Legislature has had to backfill education funding for the voter-approved school funding measure using money from the state's general fund.

HighGround Political Affairs Consultants CEO Chuck Coughlin said he believes lower revenue projections might force lawmakers to turn to a Prop. 123 renewal for additional revenue.

"That's where my head would go," Coughlin said. "If I'm the Democrats, I would say what do I need to give up here to go get that money and put it in the bank."

But Republicans have been divided on what a Prop. 123 renewal should look like. Rep. Matt Gress, R-Phoenix, previously told the Arizona Capitol Times that there isn't agreement on the issue within the caucus and Republicans don't want to bet $300 million at the ballot.

With uncertainty abound, lawmakers will likely look to make cuts to last year's budget. Kavanagh said he expects "minor" cuts all across the state government, except for public safety.

"Government has grown since the last round of big cuts when we had the Great Recession, so there's probably a little slab here and there that can be excised without pain," Kavanagh said.

Whatever budget is first produced will likely just be a starting point between GOP lawmakers and the governor.

"(Hobbs) will be standing at the door of the Capitol with her veto stamp," said lobbyist Barry Aarons.

Governor's Position: Republicans Refused To Show Budget

The governor's office has been equally vocal about the standoff. Today, Governor Katie Hobbs announced that she will veto all bills sent to her desk until Republican legislators show the people of Arizona their budget proposal and engage in serious negotiations.

Over three weeks ago, the Governor's Office paused negotiations due to the Republican leadership's refusal to negotiate on Prop 123 and called on them to show their proposed budget to Arizonans.

In the weeks since, the legislative majority has failed to produce a plan despite repeated promises to do so. They claimed to have proposed a balanced budget plan on February 19th during negotiations, but have kept it secret from the public and continue to hide it from scrutiny.

"I began this year calling for the legislative majority to work with me to cut taxes for the middle class, deliver over $1 billion to our public school teachers and students without raising taxes, and bring down costs for working families," said Governor Katie Hobbs. "Eighty-seven days ago, I showed the people of Arizona my balanced budget that does just that. Unfortunately, the legislative majority has done nothing but say 'no' and hide their budget from the people of this state. They're focused on the wrong things. Instead of coming to the table ready to support middle-class Arizonans, they've spent months pushing tax breaks for billionaires and special interests, fighting to let out-of-state corporations pump water out from under Arizona families and farmers, and working to strip health care and food assistance from vulnerable children."

Hobbs elaborated that there will be two exceptions to the moratorium for critical, must-pass bills to strengthen public safety. She is ready to sign SB 1503 first responders, state death benefit, and a bill with $4.75 million to DPS from the Highway Patrol Fund as soon as they reach her desk to support her State Troopers and first responders.

Republicans Blame Governor For Walking Away

Arizona House Speaker Steve Montenegro pushed back against the moratorium, saying it was Hobbs who left the table.

"Governor Hobbs quit the budget talks more than three weeks ago after it became clear her numbers did not add up, and now she is trying to distract from that failure with a bill-signing freeze," Montenegro said in a statement. "That is political theater. Arizona needs a balanced budget built on honest numbers, not press stunts and invented revenue. House Republicans are at the Capitol, doing the work and ready to govern. The Governor can end her sideshow anytime by coming back to the table, doing her job and dealing with reality."

Montenegro and Senate President Warren Petersen issued a similar statement last month. "[Hobbs' budget proposal would] drain a voter-protected education fund, pile on $1.5 billion in new debt and rely on numbers that simply do not add up," Petersen and Montenegro said in a joint statement. They pledged to put forward a "responsible, balanced budget" in the coming weeks that funds schools and cuts taxes for families.

Hobbs issued a similar moratorium last year in April 2025, vowing to veto all legislation until the Republican-controlled Legislature passed a bipartisan plan to fund the Division of Developmental Disabilities. She lifted the moratorium a week later after signing a compromise spending bill into law.

The Legislature has until June 30, the end of the fiscal year, to pass a budget and avoid a government shutdown.