Arizona GOP House Passes $17.9B Budget; Hobbs Eyes Talks

PHOENIX — The Arizona House of Representatives, controlled by Republicans, approved a $17.9 billion state budget plan on Thursday in a party-line vote of 31-27, using targeted cuts to executive agencies to finance conformity with the 2017 federal tax cuts. House Speaker Ben Toma, R-Prescott, hailed the measure as a 'fiscally responsible path' that prioritizes tax relief for working Arizonans while trimming $200 million from departments like Child Safety and Education. The plan, HB 2900, allocates $16.1 billion to the general fund and boosts K-12 funding by 8% to $8.3 billion, but it offsets costs by reducing administrative overhead in state operations.

Gov. Katie Hobbs, a Democrat, issued a statement welcoming the bill's tax conformity provision, which would deliver an estimated $300 million in annual savings to Arizona taxpayers by aligning with federal deductions. However, Hobbs vowed to fight changes that tighten eligibility for the Arizona Health Care Cost Containment System (AHCCCS), the state's Medicaid program serving 2.5 million residents, and the Supplemental Nutrition Assistance Program (SNAP), which aids 800,000 low-income households statewide. 'While I support smart tax reforms, we cannot balance the budget on the backs of our most vulnerable — families in Tucson, Phoenix and rural Yuma County,' Hobbs said.

The budget now heads to the GOP-led Senate, where Majority Leader Warren Petersen, R-Gilbert, signaled willingness to negotiate but insisted on spending restraint amid a projected $1.4 billion surplus. Critics, including House Democratic Leader Daniel Hernandez, D-Phoenix, decried the cuts as risking child welfare services in border communities like Nogales. Passage is eyed before the legislative session ends June 30, setting the stage for high-stakes talks between the Capitol and the Governor's Office.