Arizona Republican leaders have expressed concerns over Governor Katie Hobbs’ recent budget proposal, criticizing it for relying on what they describe as hidden tax increases and unrealistic revenue projections. House Speaker Steve Montenegro said, “Governor Hobbs’ budget is a fantasy built on fake revenues and hidden tax hikes.” He emphasized that these so-called “revenue enhancements” would translate into higher costs and taxes for Arizona families.
Senate President Warren Petersen argued that the proposal could lead to a $1 billion tax increase masked by softer language. He criticized the budget for lacking a credible plan for long-term stability, stating, “Arizona families deserve an honest, balanced budget—not one that risks higher taxes and deeper uncertainty down the road.”
House Appropriations Chairman David Livingston highlighted that the budget relies on approximately $2.25 billion in funds that are not currently available. This includes $1.5 billion linked to Proposition 123 and another $750 million intended for border-related spending without a realistic funding source. Senate Appropriations Chairman David Farnsworth echoed these concerns, warning that spending money not yet secured jeopardizes Arizona’s financial health.
House Appropriations Vice Chairman Matt Gress noted the inclusion of a ‘staycation tax’ on short-term rentals as part of the proposed tax increases, which he believes will burden Arizona families traveling within the state. Senate Appropriations Vice Chairman John Kavanagh called for thorough legislative scrutiny of any proposal relying on hidden tax hikes and unfunded assumptions.
The Arizona State Legislature remains committed to pursuing a fiscally responsible budget that prioritizes cost reduction, taxpayer protection, and maintaining Arizona’s competitiveness.
