Veridus Advisory: AZ Senate Introduces '26 Budget

Dear clients,

This evening, the Arizona Senate released a proposed $17.5 billion General Fund budget package for fiscal 2026. In a statement announcing the spending plan, Senate President Warren Petersen (R-Gilbert) termed the proposal “a bipartisan budget the Republican majority can fully support and the Governor will sign.” The Senate plan was reportedly negotiated with Senate Republicans and Democrats, along with the Governor’s Office.

The Senate plan includes:

• 5% pay raises for state troopers and firefighters;

• $15 million in additional funding for local police and fire departments;

• Over $100 million for state infrastructure and road improvements;

• Nearly $40 million to reduce the State child care assistance program waitlist by half;

• $1 million for Colorado River compact-related litigation; and

• A clean, two-year extension of the aggregate expenditure limit for K-12 public schools.

On Friday, House Republicans passed a GOP-only budget plan on a party-line vote, but Senate leaders are ignoring it - Sen. T.J. Shope (R-Coolidge) dismissed the House plan as “fantasyland.” Several measures advanced by the House are scrapped from the Senate plan, including a $100 million hospital tax extension and a mandatory 2.5% tuition cut at Arizona public universities.

The upper chamber is scheduled to take up its budget plan Tuesday in the Senate Appropriations Committee, followed by the full Senate on Wednesday. Assuming Senate passage, that sets up a game of political chicken with each chamber having approved its own version of a State budget. Did we mention the fiscal year runs out just two weeks from today, on June 30?

We will keep you apprised of all developments.

Sincerely,

The Veridus Team