CEBV Weekly: June 23, 2025
Budget fights erupt at the Capitol. Bad policy and how to stop it. Late-session bills in motion. Grab a cup of coffee first, this one's a lot.
Budget season is in full swing! This week, in response to House Republicans uninviting themselves to the negotiating table and advancing a go-it-alone “sham” budget, Senate Republicans, in partnership with Gov. Hobbs and legislative Democrats, introduced and advanced an actual negotiated budget. It’s now halftime for that budget, and saying it’s gotten ugly feels like the understatement of the year. We can't remember the last time we saw tempers this high at the Capitol.
A look at the Senate plan. The negotiated budget revives the widely panned "slush fund" strategy used in 2023, giving each lawmaker who votes for the budget millions of taxpayer dollars to spend on their own pet projects. Unsurprisingly, this strategy produces a final product that leaves a lot to be desired. Multiple Democratic senators voted no, saying it leaves out critical priorities from child care assistance and affordable housing to ongoing funding for public K-12 education. (For what it’s worth, the House version leaves out even more, as well as adding a slew of extremist non-starter items for Hobbs and Democrats.)
No money. The Senate Democratic criticisms of the Senate’s plan are true, but it's also true that Arizona no longer has sufficient revenue to fund any of the needs they listed. Instead, we're spending $2 billion a year on former Gov. Doug Ducey's tax cuts and another $1 billion a year on spiraling, unaccountable universal vouchers. As an analysis by the Grand Canyon Institute points out, “Arizona now has flat-line budgeting that limits the state’s ability to make significant investments that better people’s lives.”
Extremist opposition. Six Republicans also voted no on the Senate plan. The ringleader of that particular circus was fake elector and troll farmer Jake Hoffman (R-15), who went on a prolonged, doomed one-jerk crusade by pushing extremist floor amendments copied from the House sham budget. It was a true pleasure to watch Republicans and Democrats alike vote down these amendments by broad supermajorities because they didn't fit into the budget agreement.
Will the adjournment stick? The Senate finally adjourned close to 2 AM on Friday morning. In a true baller move, they declared "sine die" — saying they were done for session and had no intention of returning to take up House budget amendments or anything else. One chamber adjourning without the other is rare, and whether they can actually do it is an open legal question. It worked just fine in 2015, when then-Senate President Andy Biggs pulled the rug out from under then-House Majority Leader Steve Montenegro and then-Majority Whip David Livingston (oh, the irony). But this year, the House is pushing back, insisting that the Senate can’t adjourn without their permission.1
House Republicans screw it up. Now it’s the House's turn to make a move. Political insiders had widely expected them to take up the Senate plan, giving our state a viable path to a signed budget. House members had gotten their asks written into the Senate budget bills, and multiple sources were reporting the House had the votes to pass the negotiated Senate product. But House speaker Steve Montenegro (R-29) stayed publicly silent on the deal, as he has throughout negotiations. (Some are speculating that his speakership won't survive.) His main budget delegate, House Appropriations Committee chair David Livingston (R-28), was so upset he didn’t get his way with the House go-it-alone “sham” budget that he turned negotiations with the Senate into a smoking crater. And Montenegro’s second-in-command budget delegate, House Appropriations vice chair Matt Gress (R-4), literally left the country (as of June 22) for his destination wedding in Italy — taking several House Republicans with him.
Another sham budget. Late on Friday, Montenegro announced that the House will not take up the Senate budget, but is instead drafting a second sham budget to send to the Senate. This one is a so-called "baseline" (continuation) budget which contains no additional spending beyond the bare minimum required to keep the government running — and like the first sham budget, it’s DOA. Hobbs has stated in no uncertain terms that she refuses to sign a “continuation budget.” And why would she? The real one is right there.
Incredibly boneheaded. We can’t overemphasize the absolutely dunderheaded absurdity of Montenegro’s decision. Creating a budget is a herculean effort that consumes hundreds of human hours and a small forest’s worth of paper. Creating two in two weeks? Especially when you already know they aren’t worth the paper they’re printed on?
Dug in. If you believe Montenegro, he’s chosen this path because the negotiated Senate budget lacks the support to pass the House. But longtime readers of the Weekly will remember an unwritten rule requiring bills to have support from a “majority of the majority” — i.e., at least 17 of the House's 33 Republicans — before leadership is convinced to put them up for a vote. It's highly likely that Montenegro, and the handful of allies that remain to him, know perfectly well the Senate budget has the votes to pass, but that they’re obstructing it, stubbornly dug in.
Who will blink? In other words, thanks to a handful of petulant Republican lawmakers who aren’t getting their way but still get a share in Arizona’s purse strings, our state is now facing a government shutdown. In this high-stakes game of “budget chicken,” now it has REALLY become a matter of who blinks first. Keep reading for details on what's moving alongside this budget and actions you can take to push our lawmakers to resolve this standoff.
⏰ If you have 5 minutes: Directly contact your state representatives, along with Gov. Hobbs (602-542-4331 / engage@az.gov), and ask them to oppose billionaire tax handout HB2704. Remember: Hobbs’s responsiveness and accountability to her base (us) will improve her re-election chances for 2026. This is more important than ever, so if you’ve already done this, please do it again! Sustained pressure is needed to make our voices heard.
⏰⏰ If you have 15 minutes: Also directly contact your own state representatives. If you have Republican representatives, push them to abandon their sham “budgets” and get on board with the actual, negotiated budget. If you have Democratic representatives, thank them for fighting and urge them to hold strong against House Republicans’ ridiculous demands.
⏰⏰⏰ If you have 30 minutes: Also directly contact the lawmakers in the “Hall of Shame” section below to tell them what you think.
⏰⏰⏰⏰ If you have 45 minutes: Also choose one bill (or more) off CEBV’s tracking list of legislation that is still alive, and directly contact your state senator and representatives as appropriate to oppose it. Budget pressure is higher than ever with just 7 days until the end of the fiscal year, and these bills have become bargaining chips that could be used to purchase Republican lawmakers’ votes.
⏰⏰⏰⏰⏰ If you have 60 minutes: Join us on Zoom for our next CEBV Happy Hour conversation, with a state legislative rundown and budget updates. Happy Hour meets every Sunday at 4 PM through the end of legislative session. Sign up in advance here.
Along with the Senate's negotiated budget, the Legislature has dusted off and advanced a number of long-stalled proposals. Though not buried inside budget bills, it's longstanding practice for lawmakers to "horse trade" other proposals as the price of their budget votes. Here are some CEBV-tracked issues that have seen action over the past week as the budget moves:
“Ag-to-urban” bill. This concept links affordable housing and our water future. It allows home builders to buy water rights from farmers who stop using agricultural land if the developments promise to use only a certain percentage of available groundwater. Both last year and this year, environmental groups opposed the concept on grounds that the bill included land that was not actually using groundwater. (Yes, residential housing uses less water than farming, but it doesn't count as a water savings if the land wasn't growing anything at all before you put houses on it and stuck a straw in the ground.) Republican lawmakers and Gov. Hobbs cut a deal on this proposal, amended into SB1611, that takes this point into account. Senate Minority Leader and former Environmental Defense Fund attorney Priya Sundareshan voted for the deal, explaining that ag-to-urban "always had the potential to be a good solution and has included a lot of the guardrails that we had requested in order to ensure that it will provide water savings."
However, the deal is not without criticism. While big developers celebrate their win, rural elected officials are criticizing Hobbs for backing the proposal without tying it to new protections for groundwater in their areas. They have been pushing for those protections for years, but the Republican-run Legislature has consistently refused. Mohave County Board of Supervisors chair Travis Lingenfelter, a Republican, said “almost 650,000 rural Arizonans don’t have any water security at all,” and noted he was “really hoping that this was going to be the year that all the leverage was used, and we got something finally passed for our citizens.” Alas, this deal seems to have taken the place of that hope.
Billionaire tax handout. Sadly, at the urging of Gov. Hobbs, a billionaire baseball team owner scored a major win over taxpayers as the Senate advanced stadium giveaway bill HB2704. New language will redirect taxes which now fund essential services like K-12 education and public safety to stadium renovations. The city of Phoenix, which had been vocally opposed, has backed off their opposition now that the bill caps the city's portion of the tax drain at $3.5 million a year and prevents public dollars from going toward luxury amenities like suites or club seating. The bill also says the legislature “intends” the franchise to contribute $250 million, but that doesn't legally bind or require the team to pay any money at all. Here's a comprehensive rundown of the new language, which still constitutes a bad deal for taxpayers. HB2704 now goes back to the House for a final vote before it heads to the governor's desk; she is widely expected to sign it into law. See "Spotlight" below for more info and actions you can take.
Prop 123. One major issue appears to have hit the cutting room floor: a renewal of the voter-approved measure, expiring on June 30, that has been pulling roughly $300 million per year from the state land trust to fund public schools.
It's long been rumored that Republican lawmakers were planning to shoehorn protections for unpopular, budget-busting vouchers into a renewal. This week, House Republicans advanced a new version of a Prop 123 renewal, which was widely expected to see amendments wrapping in vouchers. However, the Senate adjourned without taking up the House's bills. This is likely because Gov. Hobbs and Democrats are backing public education advocates in vehement opposition to a voucher-123 combo. Advancing that proposal would likely have blown up the budget deal negotiated between legislative Democrats and Senate Republicans.
To be clear, this is stalled, not dead. We fully expect the issue to rear its ugly head again next session — or, depending on how thoroughly budget talks break down, perhaps even sooner.
Tax cuts. Infuriatingly, the negotiated budget also contains various tax cuts which reduce ongoing state revenues even further, draining away funding the state needs to support its citizens. For example, budget bill SB1749 nearly doubles Arizona’s business personal property tax exemption, which is projected to cost the state nearly $1 million per year while shifting the balance of the financial burden onto individual property taxpayers. The Senate budget also includes an exemption from property taxes for disabled veterans. And it doubles the deduction that parents can take for adoption expenses to $10,000. There's even a specific tax break exempting certain wastewater pipes from sales tax.
No matter how well-intentioned these carve-outs may be, they’re dangerous and destructive. Our state's revenue stream is dangling by the thinnest of threads. Arizona’s tax expenditures have skyrocketed from $16 billion in 2014 to over $29.9 billion in 2024, even as our revenues flatline thanks to the budget-busting duo of massive tax cuts and unaccountable universal vouchers. Our state just cannot afford to keep giving away money — and yet our lawmakers keep doing it.
Stadium giveaway bill HB2704 isn't a done deal yet. It must return to the House for a final vote before it can move to the governor's desk. This bill passed the House the first time by a 35-25 margin, with 20 Republicans and 15 Democrats in support. With 31 votes needed to pass a bill, this vote breakdown means the scheme CANNOT succeed without Democratic votes.
These Democratic lawmakers voted for HB2704 the first time it came through the House, which means they especially need to hear from us:
LD2: Stephanie Simacek
LD5: Sarah Liguori and Aaron Marquez
LD6: Mae Peshlakai and Myron Tsosie
LD8: Janeen Connolly
LD9: Seth Blattman
LD11: Junelle Cavero
LD17: Kevin Volk
LD20: Alma Hernandez
LD21: Consuelo Hernandez
LD22: Lupe Contreras and Elda Luna-Nájera
LD24: Lydia Hernandez
LD26: Cesar Aguilar
Yes, that is a lot of names — over half the Democratic caucus. In order to kill this handout, we need to convince 6 of these 15 people to vote NO. That will only happen if they hear from MANY of us between now and their next vote on this bill! Find lawmakers’ contact information here.
Bills still out there. Anything on this tracking list of bills that remain alive could be revived and passed in these waning days of session. Our priority for each bill is based on not just the bill’s dangers, but its chances of passage, as well as the likelihood that Gov. Hobbs will veto it (or, in the case of HCR and SCR referrals, the fact that she can’t). Your voice is crucial for helping to keep these bad ideas from menacing our state.
Tools like the one we use to track bills are expensive. Help us fund our work with a donation. Every cent will go toward keeping you informed!
One of our tasks is to hold our allies accountable. This section calls out those who support harmful bills. We ask them to heed and do better.
👎 Lela Alston (D-5), 👎 Flavio Bravo (D-26), 👎 Rosanna Gabaldon (D-21), 👎 Teresa Hatathlie (D-6), 👎 Catherine Miranda (D-11), and Kiana Sears (D-9) for voting YES on HB2704. This bill, which would divert $500 million in tax dollars over 30 years from the state of Arizona and its counties and cities to subsidize a billionaire-owned, highly lucrative sports franchise, could not have advanced without their support. HB2704 will now proceed to the House for a final vote.
Contact these legislators as follows:
Lela Alston, lalston@azleg.gov or 602-926-5829
Flavio Bravo, fbravo@azleg.gov or 602-926-4033
Rosanna Gabaldon, rgabaldon@azleg.gov or 602-926-3424
Teresa Hatathlie, thatathlie@azleg.gov or 602-926-5160
Catherine Miranda, cmiranda@azleg.gov or 602-926-3413
Kiana Sears, ksears@azleg.gov or 602-926-3374
2025 Session Timeline
Monday, 6/30 Last day to pass a budget before state government shuts down
Flag this handy list of contact info, committee chairs and assignments:
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Whether “adjourn” includes the ending of a legislative session is complex and unclear, a question for elections attorneys and perhaps the Arizona Supreme Court. Many insiders say Article 4, Part 2, Section 9 of the Arizona Constitution doesn’t apply to sine die, because that was meant to apply to a regular in-session adjournment for the weekend, and sine die is different. Even if sine die does require the consent of both chambers, the Constitution does not give one chamber any power to compel the other to return.