IN FOCUS - May 2, 2025

Governor Katie Hobbs’ bill moratorium has ended, so surely the Legislature and Governor are locked in budget talks and flying toward Sine Die?

Not so fast!

One major sticking point remains before lawmakers can rest: Proposition 123.

The measure provides roughly $300 million/year to K-12 schools, but is set to expire June 30. Its extension has been the subject of endless debate and speculation. And while a breakthrough between Democratic Governor Katie Hobbs and GOP legislative leaders appeared imminent in March, talks broke down. 

Now, Republicans are reportedly set to propose a plan that would extend Prop 123 with a caveat that all revenue be devoted to teacher pay. Additionally, the proposal (according to Axios and the Education Agenda) would include protection for the state’s Empowerment Scholarship Accounts (ESA) program - enshrining it into the Arizona Constitution. 

Critics are crying foul. Arizona Republic columnist Laurie Roberts characterized the plan as a scheme to tie something popular - teacher pay hikes - to something … umm … less popular: vouchers. The teachers union is vowing to fight. As for Governor Hobbs, when asked Friday whether the package is a non-starter, she said: “Absolutely, 100%.”

Just one problem. Governor Hobbs doesn’t have a say on this - at least, no more “say” than any other Arizona voter. GOP lawmakers hope to refer the package to the 2026 ballot - meaning it would bypass the Governor (and her veto stamp) and go straight to voters. 

Legislators could begin debate on the proposal as early as next week. Expect fireworks.