On Friday, Governor Hobbs released her FY2025 Executive Budget, prompting a swift response from Republicans in the Legislature, vowing to reject tax increases or cuts to school choice.
Hobbs says her proposals will close the current budget shortfall while making “significant investments in the issues most affecting everyday Arizonans.”
Republicans are calling it a “wildly unrealistic partisan budget proposal,” which essentially guts school choice in Arizona.
Among Hobbs’ proposals is a plan to remove half of the students enrolled in Arizona’s Empowerment Scholarship Account (ESA) program that’s garnered national recognition for empowering parents to take control of their children’s learning environments.
Hobbs also hopes to eliminate all tax credits available for donations to School Tuition Organizations (STOs), including those to assist low-income and disabled children through “Lexie’s Law.”
Republicans say the end result would be a tax increase on Arizonans, hurting students and their families.
The Governor, say Republicans, is erroneously assuming a $463 million shortfall in the current fiscal year, while year to date revenues are already nearly $500 million less than anticipated.
According to the state’s Joint Legislative Budget Committee:
JLBCFY 2024 Baseline General Fund revenues are projected to be $16.92 billion. This is a decrease of $(907.9) million compared to the original revenue estimate included in the
FY 2024 budget enacted in May 2023.The reduced revenue amount is the result of:
• A decrease of $(891.6) million in net revenues due to lower levels of collections than originally projected.
• The cost of the individual income tax rebate program being $(13.1) million higher than assumed in the enacted budget.
• A $(3.2) million decrease in the balance forward from FY 2023. The original budget assumed an ending balance of $2.530 billion for FY 2023 while the actual balance carried forward was $2.527 billion.
At the same time, say Republican, Hobbs “wants nearly $500 million for new initiatives, most of which is ongoing spending masquerading as one-time spending, further worsening the budget shortfall.”
“These elements in her proposal are dead on arrival with the Republican Majority,” said Senate Appropriations Chairman John Kavanagh. “Her grandstanding of bipartisanship during her State of the State Address is a far cry from the reality of this budget proposal, as her funding cuts strictly target Republican priorities.”
“Like last year’s proposal, the Governor’s budget is an unserious mess,” said House Appropriations Chairman David Livingston. “Her revenue and enrollment predictions don’t reflect reality, and her solution to the deficit proposes cuts to K-12 and water investments. We understand most of this is to appeal to her base. When she is willing to engage more seriously, Republicans are ready.”
We are very disappointed @GovernorHobbs budget won't do anything to solve the looming crisis AZDPS faces. Historic vacancies are getting worse. Either we spend the money to get a fully staffed highway patrol or face public safety disasters in the future. #azleg #fundpublicsafety pic.twitter.com/SF9QBycgFG
— AZ Troopers Assn (@AZTroopers) January 13, 2024
The Arizona Troopers Association also panned Hobbs’ proposed budget in a tweet: We are very disappointed @GovernorHobbs budget won’t do anything to solve the looming crisis AZDPS faces. Historic vacancies are getting worse. Either we spend the money to get a fully staffed highway patrol or face public safety disasters in the future. #azleg #fundpublicsafety.”
FY2025 Executive Budget proposal related documents: