Veridus Advisory: AZ Senate passes FY ’27 budget plan; Governor’s veto expected

Dear clients:

Today, the Arizona State Senate approved the Republican majority’s $17.9 billion budget package for fiscal 2027. It will be transmitted to Democratic Governor Katie Hobbs, who has raised objections to the spending plan and is widely expected to veto it. The same proposal passed out of the House last week, clearing both chambers by a GOP-only, party-line vote. 

The budget proposal was the topic of dueling opinion columns today in The Arizona Republic, as Governor Hobbs wrote the “Proposed Republican budget makes Arizonans less safe,” and House Speaker Steve Montenegro (R-Goodyear) countered that the legislative plan “saves Arizonans money.”

If and when Governor Hobbs formally vetoes the legislative budget, negotiations are likely to resume. The sticking points in a nutshell? The Governor wants more spending, smaller cuts and renewal of Proposition 123 for K-12 schools. Meanwhile, GOP legislative leaders want less spending, bigger cuts and $1.45 billion worth of tax reductions by fully conforming with the federal tax code.

Untangle that knot and we’ll have a budget deal.

Stay tuned.

Sincerely, 

The Veridus team