Arizona Governor Vows To Veto All Bills Until Republicans Publicly Release Budget Plan

Governor Halts Legislation As Budget Talks Stall Over Education Funding

Gov. Katie Hobbs announced Monday she will veto nearly all bills sent to her desk until Republican lawmakers publicly release their proposed state budget and return to negotiations, escalating a months-long standoff over Arizona's finances.

The Democratic governor said she will make two exceptions for public safety measures: one addressing first responder death benefits and another allocating $4.75 million from the Highway Patrol Fund to the Department of Public Safety.

Moratorium Comes After Months of Stalled Negotiations

The moratorium comes 87 days after Hobbs released her executive budget, which called for middle-class tax cuts and $1.5 billion in funding for public schools. She articulated her frustration to KTAR News 92.3 FM's Bruce and Gaydos last week.

All the Republicans in the legislature have done is say, That is not a balanced budget, we can not do that. Then they keep sending me irresponsible tax breaks for special interests and billionaires without showing Arizonans how they are going to pay for that.

I do not know how to negotiate with people who will not show us a plan of how they want to balance the budget, she said.

Negotiations stalled March 20 after GOP leadership told the governor's office that Proposition 123, a key funding mechanism for K-12 education, was taken off the table.

That is political theater, said Arizona House Speaker Steve Montenegro in a statement. 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.

Proposition 123 Remains Central to Budget Standoff

Montenegro and Senate President Warren Petersen issued a similar statement last month. The Governor is trying to distract from that failure with a bill-signing freeze.

Proposition 123 allowed the state to withdraw 6.9 percent annually from the state land trust to fund Arizona public schools between 2016 and 2025. The law expired at the end of last year.

Hobbs has argued a balanced budget hinges on a Prop 123 extension, because it will allow the state to remove the $300 million backfill included in last year's budget after the measure expired.

Gress and other Republican lawmakers say the state budget cannot be balanced on the back of Prop 123, told the Arizona Capitol Times. We do not think that is a responsible play.

Republican Budget Plan Remains Secret

Republicans have widely criticized the governor's budget proposal for its reliance on the creation of new revenue streams through ideas like a data center tax repeal and an event wagering fee. It also depends on a $760 million reimbursement from the federal government for border security funding, which is unlikely to arrive before the state's June 30 budget deadline.

The state also has to address the ripple effects of House Resolution 1, or the One Big Beautiful Bill, which is already straining Arizona's budget and state agencies. The Joint Legislative Budget Committee estimates it will cost the state around $1.1 billion to fully conform Arizona's tax code to federal tax cuts imposed by H.R. 1.

Additionally, the governor's office says it will cost anywhere from $125 million to $175 million to adjust the state to new Medicaid and SNAP requirements while also backfilling federal funding cuts to emergency management, air quality and victims services programs.

Previous Moratorium Set Precedent

This is not the first time Hobbs has used a bill moratorium to force Republicans to the negotiating table. During the 2025 session, Hobbs pledged to veto all legislation until lawmakers sent her a bipartisan emergency funding plan for the state's Division of Developmental Disabilities.

That moratorium lasted one week, and Hobbs ended up signing the bipartisan funding measure without having to strike down any other bills as collateral damage.

Hobbs' office said this year's moratorium comes with two exceptions. She will sign a Department of Public Safety supplemental funding measure and a bill expanding death benefit eligibility for first responders if either crosses her desk.

Uncertain Future

Whether or not Republican lawmakers will continue to send her bills in the wake of the moratorium announcement is currently unclear.

Hobbs' office said the legislative majority has failed to produce a plan despite repeated claims 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.