After weeks of anticipation, Republicans at the Arizona Legislature released a budget proposal on Monday, and it seems GOP lawmakers are using a “good cop, bad cop” approach to negotiations:
Good cop: Insisting their plan is bipartisan enough for Gov. Katie Hobbs to sign
Bad cop: Shaking their fists and saying Hobbs lost her leverage when she walked away from the negotiating table
The nearly $18 billion budget proposal is the fruit of weeks of discussion within the GOP caucus, led by party leaders like Senate President Warren Petersen, Speaker of the House Steve Montenegro and appropriations committee chairs Rep. David Livingston and Sen. John Kavanagh.
But they’re acting like they negotiated it with Democrats.
“In divided government, no side gets everything it wants, but the people of Arizona still expect leaders to do the job and produce a budget that can pass,” Petersen said in a video posted on Monday. “We’re moving a budget that cuts taxes, funds core services, shrinks government, includes priorities both sides have raised and gives Arizona a responsible path to finish the session.”
Either the Republicans are blissful dreamers or great actors — while they don’t need any Democratic votes to pass a bill, a budget still needs to earn Hobbs’ signature to become law.
In a statement released yesterday, the governor applauded Republican leaders for putting something on the table and highlighted a few items she was happy with, like tax cuts for middle-class families.
But Hobbs has already said she will reject the budget plan.
“Their proposal falls dramatically short of what the people of Arizona expect us to deliver. Their budget proposal doubles down on reckless and dangerous policies being forced on us by Washington, DC politicians,” Hobbs said. “Just like in Washington, they’re paying for tax breaks for billionaires, data centers and special interests by kicking Arizonans off their healthcare and taking food off their tables.”
Hobbs’ initial budget proposal was about $800 million bigger, and it relied on a number of less-than-certain revenue streams, like getting the federal government to reimburse Arizona for border security activity, increasing taxes on sports betting and getting voters to renew Proposition 123, which funds public education annually to the tune of $300 million and expired last year.
With state revenues coming in below predictions this year, and inflation surging — which has forced more Arizonans to rely on government services — Republicans’ new plan further decreases tax revenue. But it does propose a balanced budget using a number of effective tax increases — in part based around repealing tax credits for renewable energy and pollution control.
GOP lawmakers also want to halt discretionary spending and cut state agency budgets (excluding a few) by 5% across the board.
Top Democrats in the Legislature spent much of the day railing against the proposal.
During a buzzy Tuesday morning Joint Appropriations Committee meeting in a packed hearing room at the state Capitol, Democrats were active in deciphering and picking apart Republicans’ new proposal.
They pointed out that it would make major cuts to food stamps and healthcare initiatives, and they criticized Republicans’ attempts to fully mirror Arizona’s tax code to the federal tax cuts included in President Donald Trump’s budget, AKA the One Big Beautiful Bill Act.
Arizona would be the first state in the country to fully conform to the federal tax cuts.
“It’s insane — it goes way too far,” Democratic Rep. Nancy Gutierrez told us after the hearing. “I think they’re very proud to have done Trump’s bidding, and I want them to own that — because I don’t think the vast majority of Arizonans want that.”
Republicans were bound to take a hardline approach on negotiating, but GOP Rep. Matt Gress came out swinging even harder than expected. At the end of the hearing, he insisted that the party “won’t accept anything short of full conformity” on the tax cuts and sounded like a speech and debate champ in explaining why party leaders won’t budge.
According to Gress, when Hobbs backed away from the negotiating table in March — encouraging Republicans to craft a proposal after they said they wouldn’t try to renew Prop 123 for this year’s budget — she abdicated any leverage she had, giving Republicans the chance to craft a proposal among themselves.
“When she walked away, it gave free rein to House and Senate Republicans,” Gress said with fervor. “This is not a starting point.”
That sounds like a nice, strong stance — but it doesn’t change the fact that Hobbs is still the governor, and she’s already vetoed Republicans’ previous attempts to fully conform the tax code to the Trump cuts.
The GOP budget proposal contains a number of other clear non-starters with the Governor’s Office, including that the budget would force Arizona to opt into Trump’s federal school tuition organization program, essentially a tax credit to create vouchers for students to attend private schools.
Dems also pointed out what the budget didn’t include, like an end to tax breaks for data centers — which both Democratic and GOP lawmakers have proposed in other bills that never received hearings.
As Gress noted, Hobbs’ decision to halt negotiations until Republicans could propose a budget probably didn’t help her strategically. As a result, the whole Republican caucus was able to confer among themselves and form a more united front.
But Democratic Rep. Lupe Contreras predicts it could splinter when talks come down to the nitty-gritty work of passing a budget that actually has a chance at being signed.
“That united front is not going to be there as much as they say once it starts moving,” Contreras told us. “There’s a lot of work to be done to get to a budget that we can all align on. For now, this (proposal) is just something to be thrown to see if it sticks. We all know this is not going to stick.”
With about two months to go before Arizona’s fiscal year comes to an end, it’s now the governor’s turn to throw a card on the table — or, to follow Contreras’ metaphor, lob another proposal at the wall.
Slamming the door shut: A federal judge dismissed a lawsuit filed by the Trump administration demanding access to Arizona’s voter rolls, which is widely seen as an avenue to search for immigrants to deport, the Arizona Mirror’s Jim Small reports. Notably, the Trump-appointed judge dismissed the case with prejudice, meaning it can’t be brought again. Judge Susan Brnovich1 said federal law does not require states to produce voter registration lists on demand, which prompted Arizona Attorney General Kris Mayes and Secretary of State Adrian Fontes to say their offices will “continue to defend the privacy of Arizona voters,” including sensitive personal information like addresses and dates of birth.
Getting the wrong idea: ASU professors are pissed that the university’s new AI-powered Atomic platform is being used to slice up videos of their lectures into short clips, 404 Media reports. The platform spits out video clips from lectures that lack context or are unrelated to the previous clip, which is one of the reasons ASU professors are irritated.
“It makes me feel like somebody that’s less knowledgeable about me, they’re going to be naive about these positions, and they’re going to think either that an ‘expert’ said it so therefore it must be true… or they’re gonna think, that’s obviously fucking stupid, this ‘expert’ must be dumb,” one professor said.
Pushing too hard: A Phoenix man was sentenced to a month in jail for pushing canvassers to submit fraudulent voter registration forms during the 2024 presidential election in Pennsylvania, per the Associated Press. Guillermo Sainz Gurrola, an employee of Arizona-based Field+Media Corps, which previously did work for several progressive groups like LUCHA and Chispa AZ and was run by Mesa Councilman Francisco Heredia during the 2024 election, “instituted unlawful financial incentives” that “spurred some canvassers to create and submit fake forms to earn more money,” per court records. Six other canvassers are still facing charges. County officials in Pennsylvania said none of the fraudulent forms led to anyone getting fraudulently registered.
Checking résumés: A court ruling that put a receiver in charge of health care in Arizona prisons raised a difficult question: Who should the receiver be? Attorneys for the incarcerated plaintiffs presented two candidates — Kellie Wasko, who oversaw the South Dakota prison system under former Gov. Kristi Noem, and Leann Bertsch from the North Dakota prison system — and the Arizona Department of Corrections, Rehabilitation and Reentry submitted one candidate, Annette Chambers-Smith from the Ohio prison system, per Kiera Riley at the Capitol Times.
We don’t want that job. We’d much rather keep reporting the news. But we can’t do it without your help!
Should’ve believed her: A Mexican woman miscarried inside an immigration detention center in Eloy after ICE agents told her she was lying about being pregnant, even though a test administered at the detention center showed she was pregnant, John Washington reports for LOOKOUT. Five months later, Beatriz Pastrana Candela is still being held in Eloy and wondering about the child she lost. At least 16 other women have miscarried in ICE detention since the start of the second Trump administration.
In other, other news
There was a “full-blown riot” at a state prison in Florence on Sunday (ABC15) … Residents and businesses in Kearny cut back on their water usage enough over the past few weeks to ensure the town won’t run out of water before September (Clara Migoya / Republic) … Arizona’s 98 data centers put it in the top five states with the most data centers (Jeremy Duda / Axios) … The Arizona Supreme Court says making false or damaging statements about a person can be harassment, even if you don’t say it directly to the person (Mitchell Koch and Steven Sarabia / AZFamily) … And GOP lawmakers in the Arizona House signed off on a bill that would require public schools to teach children what to do when they encounter a gun (Gloria Rebecca Gomez / Arizona Mirror).
It must be election season, because our favorite lapdog for the governor is back.
No, we’re not talking about the lamestream media.
We’re talking about her actual dog, Harvey, who has graced the LOL section of this newsletter many times for his clever dog puns.
I mean, come on people, “working her tail off” and “lend a paw.” That’s gold!
We love seeing Harvey slide into our texts, and, in case there’s any question, we’re not making fun of his adorable ears, tired tongue, thick belly or Arizona flag bandanna. Clearly, he’s a good boy.
The “What We’re Laughing At” here is the fact that — based on our cursory analysis of years worth of texts from Katie Hobbs’ campaign — Harvey is second to only Donald Trump in his ability to drive donations to Hobbs.
1 Yes, Judge Susan Brnovich is the widow of former Attorney General Mark Brnovich