IN FOCUS - Jan. 9, 2026

They’re back.

The 2nd Regular Session of the 57th Arizona Legislature convenes Monday at the State Capitol, with Governor Katie Hobbs set to deliver her fourth State of the State address as the headliner of Opening Day.

The Democratic Governor’s remarks will both announce her policy agenda for the session and serve as an unofficial kickoff to the campaign season. She seeks re-election later this year, as do Arizona’s other statewide officeholders and legislators.

It’s another session of divided government at the State Capitol. While the two parties are likely to focus on a familiar slate of issues - affordability, economic growth, election reform, housing, water and more - proposed solutions will vary widely. 

The first big fight of the session is likely to focus on taxation - specifically, to what extent the State of Arizona should conform with federal provisions in the “One Big Beautiful Bill.” GOP legislators seek full conformity - amounting to either a $1.1 billion tax cut over three years or $1.1 billion loss in State revenue, depending on your perspective. Governor Hobbs proposes a more narrow conformity that excludes tax cuts for corporations and high-earners. Both the Governor and GOP lawmakers are talking about a possible special session to address the issue as early as next week.

Arizona’s lean fiscal picture will loom over the affordability debate as budget negotiators begin work this winter. Next Friday, Governor Hobbs will lay down the first marker in terms of her spending priorities when she releases her Executive Budget plan for fiscal 2027.