Surprise: Arizona Lawmakers Return to Capitol as Budget Deal Nears, Prop 123 Education Funding in Focus

Arizona lawmakers walked back into the state Capitol on Monday with a budget agreement reportedly within reach, just three weeks before the July 1 deadline that kicks off the new fiscal year.

The return marks the end of an early recess that began in May after Governor Katie Hobbs vetoed a Republican-backed budget proposal she called "unbalanced and reckless."

Behind the scenes talks yield progress

Negotiations have continued behind closed doors since the Legislature adjourned in early May. Both sides now say they are close to a deal.

One of the most significant breakthroughs involves Proposition 123, the voter-approved education funding measure that has been a central sticking point in budget talks.

Senate President Warren Petersen told KTAR that negotiators have reached a solution on the issue, though any extension of the proposition would still require voter approval.

Hobbs signals willingness to compromise

The governor has declined to publicly discuss the remaining sticking points but acknowledged that compromise is necessary.

"I put out my budget in January. That is my vision, my plan," Hobbs told KTAR. "I know that there's going to be compromise."

The budget talks come after months of escalating public tension between the Democratic governor and Republican legislative leaders.

Timeline of the budget standoff

• March: Hobbs walked away from budget negotiations
• April: Hobbs imposed a bill-signing moratorium, refusing to act on most legislation until lawmakers returned to the negotiating table
• May: Hobbs vetoed the Republican-backed budget proposal. Legislative leaders recessed to allow negotiations to continue privately.
• June 1: Lawmakers return to the Capitol with a deal reportedly near
• June 30: Deadline for the Legislature to pass a state budget
• July 1: Arizona's new fiscal year begins

What it means for Surprise

Residents of Surprise and across Arizona are waiting to see how the final budget shapes state funding for schools, public safety, infrastructure, and social services. The city relies on state appropriations for education, transportation, and community programs.

State leaders have not announced when a final budget agreement could be unveiled. Both sides have expressed optimism that negotiations are nearing the finish line.

The clock is ticking. With only 30 days remaining, the question is no longer whether Arizona will have a budget. It is what that budget will look like.