Arizona Republicans Blast Hobbs for Walking Away from Budget Talks, Pushing Risky Education Fund Raid

FOR IMMEDIATE RELEASE
Thursday, March 19, 2026

PHOENIX, ARIZONA—Arizona Senate President Warren Petersen and House Speaker Steve Montenegro are pushing back after Governor Katie Hobbs abruptly walked away from budget negotiations today, distorting the facts while advancing a budget plan that would put Arizona taxpayers and students in jeopardy. The legislative leaders issued the following joint statement:

"Governor Hobbs chose to walk away from budget negotiations despite a path forward being within reach. At the center of this dispute is her proposal to dramatically increase withdrawals from Arizona's Public Land Trust, a voter-protected fund designed to support K-12 education for generations. This is not a solution. It is a long-term raid on a critical resource. According to legislative budget analysts, the Governor's proposal would cut the trust nearly in half over the next 20 years, dropping it from roughly $9.7 billion to $4.7 billion. Her latest plan calls for a 10.9 percent distribution for the next 20 years, far above the previous 6.9 percent over ten years. That approach would bankrupt the trust and rob future education funding from our children just to please unions today.

Her proposal also relies on unrealistic assumptions, including sustained high investment returns with no economic downturn for two decades, while dramatically increasing withdrawals beyond historical levels.

The broader budget follows the same pattern, layering in $1.5 billion in new debt, higher taxes and fees, and questionable revenue projections to cover increased spending. That is not a balanced budget.

The Governor wants to drain a voter-protected education fund, pile on $1.5 billion in new debt, and rely on numbers that simply don't add up. We have shown the Governor's Office a balanced budget with tax conformity. We've put forward a responsible plan that cuts taxes for working families and funds schools without gimmicks. She walked away from the table because her math doesn't work. Arizonans deserve better than headlines and blame-shifting.

Republicans won't turn our backs on Arizonans. In the next several weeks, we will work to build a responsible, balanced budget that cuts taxes for Arizona families, funds our schools, keeps government operating, and protects the long-term stability of our state. It will be honest, sustainable, and will reflect the priorities of the people we represent. If the Governor chooses to veto that, the consequences are real. It means continued uncertainty for families, for schools, and for our economy. It means delaying pay raises, delaying investments, and creating instability that Arizona can't afford.

While the Governor plays political theater, Arizona families are dealing with real consequences. This impacts your cost of living, your paycheck, your kids' classrooms, and whether Arizona remains affordable for the families who live here. A temper tantrum won't balance the budget, and it is not leadership to rely on voters to pass the funding we need after the fact. We're ready to get this done. The question is whether she is."

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For more information, contact:

Kim Quintero

Director of Communications | Arizona State Senate Republican Caucus

kquintero@azleg.gov