Overview
- The Republican budget, passed on party-line votes in both chambers with the Senate acting Monday, now goes to Gov. Katie Hobbs for action that Democrats expect will be a veto.
- The $17.9 billion plan centers on broad tax cuts funded by 5% reductions to most state agencies, fund sweeps, and full conformity with recent federal tax changes.
- Key tax pieces include no state income tax on tips or overtime, a higher standard deduction, a new childcare deduction, and a $6,000 deduction for people 60 and older with pension or retirement income.
- The plan tightens eligibility checks and reporting for food aid (SNAP) and Medicaid (AHCCCS), as Arizona has already removed about 420,000 people from SNAP since July and food banks report a 15% rise in demand.
- Hobbs left talks over K‑12 funding after Republicans rejected extending a $300 million school aid stream tied to Proposition 123, so any final budget will require a bipartisan deal to avoid service disruptions after June 30.