Gov. Hobbs highlights affordability, education, water security in 2026 State of the State address

PHOENIX — Arizona Gov. Katie Hobbs highlighted her top priorities, including affordability, housing, erasing medical debt and education, during her annual State of the State address on Monday.

Hobbs, a Democrat who is running for reelection, outlined how she planned to improve the state in 2026.

Here’s what Hobbs spoke on during her 2026 State of the State speech:

For 2026 State of the State, Hobbs’ top priority shifts to affordability

Last year, Hobbs said her top priority was the border. In 2026, that focus has shifted to affordability — but she did address the issue, calling on the federal government to repay the Grand Canyon State for the more than $700 million its spent on border security since 2021.

“To support our fellow Arizonans, today I am proposing the creation of the Arizona Affordability Fund to help manage the high cost of housing and utilities,” Hobbs said. “I’m starting this initiative today with a $20 million investment.”

The fund will pay for the building of more affordable housing units, help Arizonans weatherize their homes to lower energy costs and help working-class families pay their bills.

Katie Hobbs calls for nightly fee on short-term rentals

To fuel this fund, she hopes to secure a nightly fee on short-term rental stays.

“By asking vacationers to kick in three dollars and fifty cents — less than a cup of coffee — we can deliver major change for the working people in our state who are struggling to get by,” Hobbs said.

The governor added that she wants to prioritize strengthening the state’s economy, by both attracting entrepreneurs and multinational companies to Arizona and helping residents find good jobs.

Part of that is also tackling medical debt, she said.

“Facing treatment for life-threatening medical conditions, many have had to make impossible choices: pay off debt, or put food on the table or pay the utility bill,” Hobbs said. “Our constituents deserve safe communities. They deserve economic security, and they deserve a hopeful future.”

Arizona governor’s 2026 State of the State speech highlights housing issues

Helping Arizonans find secure housing is another top priority for 2026. To do this, Hobbs announced a new Housing Acceleration Fund.

“The fund leverages public and private dollars to unlock lower cost financing and multiply the affordable homes we build,” Hobbs said. “For every dollar we invest, we’ll generate up to ten dollars to finance projects that house Arizonans.”

To kickstart this initiative, Hobbs announced a $2.5 million investment.

“Together, we can ensure Arizona is blessed with security, opportunity and freedom,” Hobbs said at the end of her speech. pic.twitter.com/HsKUpTsas1

— KTAR News 92.3 (@KTAR923) January 12, 2026

Hobbs promises to crack down on outsiders slurping up Arizona water

“Today I am announcing a new Active Management Area for La Paz County to crack down on the out-of-state special interests that are pumping our state dry while Arizona families and farmers suffer,” Hobbs said.

“Why do we need another AMA? Because in the Ranegras Plain Groundwater Basin, the land is sinking and legislators are shirking their responsibility.”

The new AMA will help protect local water supplies while empowering residents, she said. It represents the type of “smart growth” she hopes to continue pursuing in the future.

The full transcript of Hobbs’ 2026 State of the State address can be found here.

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