AZ Gov Hobbs threatens to veto most bills unless GOP releases their proposed budget

(The Center Square) - Arizona Gov. Katie Hobbs is threatening to veto nearly all bills unless Republicans publicly release their proposed budget.

Hobbs may get her wish soon. Senate President Warren Petersen, R-Gilbert, told The Center Square that he hopes to release the budget within the next two weeks.

The two main areas of disagreement between Republicans and Hobbs are Prop. 123 and tax cuts, Petersen said. Petersen previously told The Center Square that Republicans want to fully implement all the tax cuts from the federal One Big Beautiful Bill Act, while Hobbs wants to apply half of them.

This week, Hobbs said she would veto every bill besides two safety bills unless she saw the Republicans' budget. But she hasn't been happy with what she's heard so far, noting the GOP proposal is focused on the wrong things.

“Arizonans deserve more than these political games. They deserve a budget that cuts taxes for the middle class, funds our public schools and lowers costs for everyday Arizonans. I’m ready to negotiate. My door is open,” Hobbs said.

“The legislative majority needs to put forward their budget proposal and then join me at the negotiating table so we can pass a bipartisan, balanced budget just like we’ve done the past three years,” she added.

Petersen told The Center Square that Hobbs wants Republicans to “balance the budget using Prop. 123,” which is meant for K-12 education. Arizona voters passed Prop. 123 in 2016, which increased the annual distribution from the state’s land trust fund from 2.5% to 6.9% for 10 years.

The state land trust fund helps support K-12 education by “generating revenues via the sale and use of lands and the investment of proceeds associated with acreage granted to the state,” according to the Arizona Joint Legislative Budget Committee.

In Hobbs’ Prop. 123 proposal, she calls for increasing its annual distribution to 10.9% over the next two decades.

Petersen said Republicans told the governor that balancing a budget using the proposition would not be responsible because her proposal would bankrupt the trust in 20 years.

He added that once Republicans rejected the idea, Hobbs walked away from negotiations.

The Senate president said Republicans want to see Prop. 123 protect school choice and the money go to the classroom.

Petersen said Republicans have a balanced budget and are currently close to securing the 47 votes needed to pass it in both houses of the Legislature.

Once Republicans have those votes, they will move the budget and put it up for a vote, he said.

Republicans “have to work with the governor,” Petersen said, adding that they are “always willing to come to the table to negotiate with her.”