Under HB2310, any city or county that cuts the budgets of their police agency by 10% or more would lose the same amount in state funding.
Jamaar Williams of BLM Metro Phoenix said defunding and disbanding police departments is neither radical nor unrealistic.
Affordable housing, unemployment, mental health, and education are some of the areas that could benefit from additional funding.
Phoenix officials approved a city budget in June that left police funds intact but allocated $3 million for a civilian review system.
Phoenix officials voted Monday to divert nearly $3 million in savings from coronavirus relief funds to the newly-created civilian oversight committee.
The vote was rescheduled after more than 600 people spent hours 110-degree weather to demand the council take steps towards police accountability.
The decision of two state senators to skip the rest of the legislative session amid coronavirus fears puts the GOP majority in jeopardy.