Our 7th year, week 16
SPECIAL EDITION, FY2027 STATE BUDGET PROPOSAL BY THE LEGISLATURE
On Tuesday, April 28, at a joint session of both the House and Senate Appropriations Committees, the Arizona State Legislature unveiled its budget proposal for Fiscal Year 2027.It was a contentious session, replete with objections raised by Democrat members.
A video of the full 3-hour, 45-minute session, or any portion thereof, may be viewed HERE
The next day, the House held a floor session at which the budget bills were further discussed and voted on, resulting on the passing of the full budget package along party lines. It was also a rather contentious session.
A video of the full 7-hour, 10-minute session, or any portion thereof, may be viewed HERE
At around $18 billion, this proposed budget is close to the FY2026 version. Conspicuously absent from this budget proposal are gimmicks and unrealistic revenue projections. Here is a summary of its provisions.
| Provision | Details |
| Total Tax Cut | $1.45 billion over four years |
| Tax Conformity | Full alignment with federal tax cuts |
| Elimination of Taxes | No taxes on tips and overtime |
| Agency Budget Cuts | 5% cut to nearly all agencies |
| Exceptions to the 5% cut | Public Safety, Child Safety, Corrections |
| Employee Insurance Premiums | 10% increase in 2027, 5% in 2028 and 2029 |
| No Prop 123 extension | The Education Trust Fund remains as intended in the Enabling Act |
In a recent press released, two members of the House Republican leadership expressed why they were excited about this budget.
AZ House Speaker Steve Montenegro:
“House Republicans did the hard work and passed a serious budget that puts Arizona families first. At a time when affordability is front and center at kitchen tables across this state, Republicans are fighting to help Arizonans keep more of their own money. Governor Hobbs’ idea of affordability is raising taxes and growing government. Ours is cutting taxes, protecting core services, and giving workers, families, and retirees more breathing room. She walked away from negotiations, but Republicans kept working and passed a budget that spends hundreds of millions less than her plan while helping Arizonans keep more of what they earn.”
AZ House Majority Leader Michael Carbone:
“Families across Arizona are tightening their belts, and state government should do the same. This budget proves we can fund the priorities Arizonans count on without asking them to pay more. It delivers real tax relief, controls spending, and rejects the idea that government should grow while families are being squeezed. House Republicans are standing with taxpayers, workers, parents, and retirees who deserve a budget that treats their money with respect.”
In a recent Senate Republican Caucus Newsletter, Majority Leader John Kavanagh had this to say about Hobbs’ initial reaction to the budget proposal:
“Governor Hobbs said she would lift her bill moratorium once a budget was released. We released it. The House passed it. Now she’s changed her position and says she won’t lift it unless we “come back to the table.” We never left. She walked away weeks ago. At some point, this isn’t leadership. It’s stalling. Republicans are doing our jobs. The Governor should decide if she’s ready to do hers”.
These newsletters may be accessed HERE
Here is a list of the 16 House bills that comprise the budget proposal. The Senate versions are identical. To find out more about these bills, including their actual text, click on the bill number.
| BILL # | SHORT TITLE |
| HB4138 | 2026-2027; general appropriations act. |
| HB4139 | 2026-2027; amusements. |
| HB4140 | 2026-2027; state budget implementation. |
| HB4141 | capital outlay; 2026-2027; appropriations. |
| HB4142 | 2026-2027; commerce. |
| HB4143 | 2026-2027; criminal justice. |
| HB4144 | 2026-2027; environment. |
| HB4145 | 2026-2027; health care. |
| HB4146 | 2026-2027; higher education. |
| HB4147 | 2026-2027; human services. |
| HB4148 | 2026-2027; K-12 education. |
| HB4149 | 2026-2027; local government. |
| HB4150 | management; state properties; 2026-2027. |
| HB4151 | 2026-2027; revenue. |
| HB4152 | 2026-2027; taxation; omnibus. |
| HB4153 | 2026-2027; transportation. |
The Senate is expected to take up the budget issue either Monday next week.
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