Governor Hobbs’ Budget Focuses on Border Security, Water Supply and Fraud in the ESA Program

Arizona Governor Katie Hobbs has unveiled her 2025/26 budget proposal, and it reflects the priorities she laid out in her State of the State Address when she called on State Legislators to work with her to achieve “Arizona’s Promise.”

In a Gubernatorial Press Release, the Governor’s Team highlighted the following features of Ms. Hobb’s proposed budget.

They include:

“Lower Costs and Create Opportunity for Arizona Families

• $10M annual tax credit for six years to expand the State Low Income Housing Tax Credit and facilitate the development of affordable housing across Arizona.
• $5M in ARPA funds to double the number of first-time homebuyers who receive assistance through the Arizona Is Home program.
• $7M ongoing from the General Fund, $5.5 million in ARPA funds, and $159,800 in other funds for the Bright Futures AZ initiative to decrease child care costs for Arizona families, increase child care availability, address early childhood education workforce needs, and support child care providers.
• $5M one-time from the General Fund to establish the Homes for Heroes Fund and reduce veteran homelessness in Arizona.

Keep Arizona’s Communities Safe and Secure the Border

• $33.3M General Fund ongoing and $1.7M Other Funds ongoing for a 5% pay increase for front line law enforcement and correctional officers to enhance the State’s competitiveness, improve retention, and reduce the costly impacts of turnover.
• $5M ongoing General Fund and $5M one-time in General Fund expenditures to aid law enforcement agencies with border security efforts, an increase from $13.2M to a total of $23.2M.
• $5M one-time from the General Fund to expand drug-interdiction efforts under the Counterdrug Task Force.
• $1M one-time in ARPA dollars to launch a statewide fentanyl awareness and education campaign.
• $2M one-time from the General Fund to expand access to medication-assisted treatment in underserved and rural communities.
• $2M one-time from the General Fund to equip first responders with naloxone and related overdose reversal medications.
• $20.7M one-time in ARPA dollars in FY 2026 and $20.7 million ongoing General Fund in FY 2027 to support victims and survivors of crime (VOCA funding).

Secure Arizona’s Water Future and Fight Wildfires

• $3M for a newly created Colorado River Litigation Fund to defend Arizona’s interests and water users who depend on the state’s precious Colorado River water.
• $30M in General Fund money for wildfire suppression to support ongoing efforts fighting wildfires to keep communities safe.

Invest in Public Education and Bring Accountability to ESA Entitlement Spending

• $285.6M to district and charter schools for base level funding as required by Proposition 123.
• Reforming the ESA program to implement a scaled income cap that modifies voucher amounts and repeals prior-year eligibility. This common sense entitlement reform will enable the investments in public safety, housing, water, childcare, and healthcare laid out here and throughout the Executive Budget.

Protect Reproductive Freedom

• $344K ongoing from the General Fund and $3.9 million in federal expenditure authority to expand family planning coverage for Medicaid recipients.
• $120K ongoing from the General Fund and $560K in federal expenditure authority to create access to a year’s supply of contraception for Medicaid recipients.”

Other noteworthy people-first features of the Governor’s budget proposal include just over six million dollars to help subsidize free school meals and reduce grocery bill costs and expanding postpartum coverage for mothers through AHCCCS

In the press release, the Governor stated:

“To realize the Arizona Promise, we must deliver opportunity, security, and freedom for Arizonans. My Executive Budget reflects my commitment to continuing our strong economic growth, lowering costs, keeping communities safe and securing the border, and protecting Arizonans’ fundamental freedoms. We are connecting Arizonans to good jobs, lowering the costs of housing, child care and groceries, and protecting our veterans. I’ll continue being a strong steward of taxpayer dollars, cutting waste, fraud, and abuse and investing in the critical services that improve life for everyday Arizonans in every corner of our state.”

Senate and House Democratic Leaders also weighed in on the Governors proposed budget.

Senate Democratic Leader Priya Sundareshan offered:

“I applaud the Governor and her team for their work and dedication to putting forward a fiscally responsible budget proposal. This proposal has a desperately needed focus on ensuring Arizona is an affordable place to live, raise a family, and build a business. It is my hope that Republicans choose to partner with the Governor to adopt the outlined common-sense constraints on the out-of-control universal ESA voucher scheme. The strain of this program paired with years of irresponsible Republican budgeting have left our state in critical need of the investments this proposal seeks to make in Tribal communities, working families, affordable housing, and responsible groundwater management.”

House Democratic Leader Oscar De Los Santos relayed:

“The Governor’s budget is tightly aligned with our Caucus priorities in several key ways —especially with its focus on affordability, affordability, and affordability. While greedy corporations try to fleece and price-gouge working families, we must do everything we can to slash costs. Thankfully, the Governor has put forward solid and workable plans to cut costs for childcare, housing, and more — which give us an excellent starting place for the bipartisan negotiations that it will take to pass a budget that works for every Arizonan. As the chaos and tariffs of the incoming Trump Administration threaten to drive up prices on basic necessities like food and healthcare, it’s more important than ever that here in Arizona we make much-needed investments to protect hard-working families and make life more affordable.”

Now is the time for the Governor and Democrats in the State Legislature to go on a public relations offense to frame the budget narrative and win the spin game and not just in blue legislative districts. Purple and red ones need to be visited often as well.