IN FOCUS - Oct. 10, 2025

Got budget requests? Good luck.

The coming fiscal year is looking increasingly lean at the Arizona State Capitol. That’s according to a Joint Legislative Budget Committee (JLBC) report released this week, which  found State budgeteers may have as little as $67 million in added funding to work with as they craft the 2026-27 budget. The actual financial picture is even bleaker: assuming legislators agree to conform with tax code changes associated with H.R. 1 (aka, the One Big Beautiful Bill), that’ll disappear $1.1 billion in State revenues over the next three years - including roughly $340 million in fiscal 2027 alone.

There’s also the matter of $580 million worth of one-time spending that legislators approved earlier this year, plus an estimated $112 million in new regulatory requirements associated with H.R 1.

The news isn’t all bad. JLBC noted that the State is seeking federal reimbursement for $750 million in illegal immigration-related expenses. The State also has set aside a $1.6 billion “rainy day fund.”

State coffers will be watched closely in the coming months, as will an Arizona economy that has gone wobbly in recent months. The Legislature reconvenes Jan. 12, 2026.