Arizona passed its state budget. Here’s what’s in it

Arizona finally has a state budget after weeks of political turmoil. 

The $17.6 billion budget that originated in the Senate passed the House on June 26 and was signed by Democratic Gov. Katie Hobbs on June 27, avoiding a government shutdown with three days to spare after weeks of back-and-forths between the two chambers and the governor.  

The House GOP passed its own $17.3 billion budget on June 13, with no bipartisan debate and no Democrats present. Hobbs called this version of the budget “dead on arrival” due to its massive spending cuts on vital state services and slew of ultra-conservative priorities.

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Meanwhile, the Senate and Hobbs backed a bipartisan deal, which passed on June 20 and was sent to the House. But, the House threw out this version and instead passed its own, second, “skinny” or “skeleton” budget plan drafted by Republicans that would severely gut state services and push forward conservative initiatives.

Hobbs vetoed both House GOP-drafted budgets on June 25. The Senate’s budget, which Hobbs ultimately signed, while not perfect, doesn’t cut spending on vital services or include the priorities of just one political party.

Some progressive advocacy groups, like Living United for Change in Arizona (LUCHA), were unhappy with the budget that was ultimately signed, pointing to concessions made to Republican lawmakers.    

READ MORE: As a government shutdown looms, Arizonans demand government action

“We celebrate the wins our communities delivered. But there is a crisis of conviction at the state legislature: Some Democrats have not shown the will to fight for our community. Unless we build the political will to take on the bigger fights for a new vision, we’ll keep conceding the future our communities deserve,” said Alejandra Gomez, executive director of LUCHA, in a press release. 

After her vetoes of the House budget, which was a package of 28 bills, Hobbs now holds a new record for the most vetoes in any legislative session, with over 160 bills, beating her number from 2023.

How did public education fare?

Public school funding was increased by 2% for inflation, the bare minimum as required by state law, and it lifted the Aggregate Expenditure Limit school spending cap for the next 2 years to avoid any immediate school budget cuts.

K-12 schools received $3.8 million to eliminate the cost of school lunches for low-income students, but Arizona public schools still remain 49th in the nation for school funding.  

“At the very least, this budget will prevent cuts to public schools. But when you’re funded 49th in the nation, ‘no further cuts’ is not a victory,” according to a statement from Save Our Schools Arizona, a nonpartisan pro-public school advocacy group. 

The budget did not include any reforms or guardrails for the costly $1 billion dollar controversial Empowerment Scholarship Account (ESA) school voucher program, which allows families to use state money to send their children to private schools without demonstrating financial need. It instead gave $52 million to the school voucher program to cover unbudgeted expenses from the last school year. 

It also backfills $380 million in Prop 123 money to compensate for lawmakers’ failure to negotiate its renewal. Prop 123 was a ballot referral approved by voters in 2016 that funds public schools and should have been sent to voters for renewal this year, but it wasn’t.

As for higher education, the Arizona Promise Program, a guaranteed scholarship program for eligible Arizona residents, received $16.3 million, and the budget created Arizona’s first ever Community College Promise Program, a scholarship program for community college students. 

The Arizona Teacher’s Academy, a program that supports college students on the path to becoming teachers in Arizona received $9 million of new investment.

What else did the budget fund?  

The passed budget invested nearly $45 million in childcare assistance, cutting the childcare waitlist by 50%.

Arizona’s Medicaid agency, Arizona Health Care Cost Containment System (AHCCCS) is fully funded from the state budget, as well as the Division of Developmental Disabilities–which funds healthcare for Arizonans with disabilities.  

Rental and cost-of-living assistance for Arizonans facing eviction, transitional housing for Arizonans experiencing homelessness, legal aid, and targeted programs for seniors and veterans saw a $26 million investment.  

However, the bill does not renew the Low-Income Housing Tax Credit program or allocate any new funds into the Housing Trust Fund or the Arizona Department of Housing. 

The budget also includes 15% in pay raises for state firefighters, a 5% pay raise for state law enforcement officers and a one-time 4% bonus for correctional officers—it also gives $5 million to sheriffs for border enforcement.

Some House Democrats voted against the budget due to its $24 million worth of funding for border enforcement, specifically to fund Gang & Immigration Intelligence Team Enforcement Mission backed by Hobbs. 

“So while yes, there are great things in the budget and no budget is perfect, and I have said that every year since I’ve been here, my morals and my values cannot allow me to support the terrorizing of my community,” Rep. Alma Hernandez (D-Tucson) said as she voted no on the budget.