GOP leaders defend approach after Arizona Governor’s Office cuts off budget talks

PHOENIX — The Arizona Governor’s Office announced Friday it was cutting off budget negotiations, accusing Republicans of refusing to engage in good-faith discussions about education funding.

The Legislature’s Republican leaders responded by accusing Hobbs of distorting the facts.

“Gov. Hobbs chose to walk away from budget negotiations despite a path forward being within reach,” Senate President Warren Petersen and House Speaker Steve Montenegro said in a joint statement.

Christian Slater, Gov. Katie Hobbs’ communications director, accused Republicans of refusing to negotiate a plan to revive an education funding mechanism known as Proposition 123.

“Legislative Republicans are holding teachers, students, and parents hostage to their partisan agenda by refusing to discuss Prop 123 proposals in budget negotiations. Public education funding should be a bipartisan issue,” Slater said in a press release.

The governor’s spokesperson also called for Republicans to make their budget proposal public.

Public education should be bipartisan, but @AZSenateGOP and @AZHouseGOP are putting their partisan political agenda ahead of Prop 123 in budget negotiations. Budget negotiations are off until they show the people of Arizona their budget.

Full statement from me below 👇 pic.twitter.com/dwmueAbN0E

— Christian Slater (@slaterchrisj) March 20, 2026

“Republicans refuse to show the Governor’s Office and the people of Arizona their budget proposal because they know it’s unbalanced, unserious and puts billionaires and special interests ahead of everyday working families,” Slater said.

The Republican leaders said they will put together a “responsible, balanced budget” in the coming weeks that funds schools and cuts taxes for families.

“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,” Petersen and Montenegro said.

Arizona governor seeks $1.5 billion for education in budget

State funding under the current budget runs out at the end of June.

Hobbs unveiled her $17 billion executive budget proposal on Jan. 16, the same day she vetoed a $1.1 billion Republican tax cut plan.

Slater said Hobbs’ plan includes $1.5 billion in public education funding as well as middle-class tax cuts. He also said the governor wants to end tax breaks for data centers.

The Republican leaders argued Friday that Hobbs’ budget proposal would put the state in debt.

“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,” Petersen and Montenegro said in their statement.

What is Arizona’s Prop 123 education funding mechanism?

Prop 123, which was approved by voters in 2016 and expired last year, increased the amount of money being put aside for public schools from the State Land Trust Permanent Fund from 2.5% to 6.9%. That provided schools with an additional $300 million or so per year, part of which went toward teacher salaries.

Legislative action is required to put it back on the ballot, something Hobbs has been pushing for since before it expired.

Republican Superintendent of Public Instruction Tom Horne also has been lobbying to revive Prop 123, saying it will help mitigate the state’s teacher shortage by boosting salaries.

Meanwhile, Slater accused Republican legislators of failing to negotiate on Prop 123 or a new budget in good faith.

“They have flatly refused to consider a Prop 123 ballot referral measure, and they refuse to show the Governor’s Office how they plan to responsibly pay for their proposed tax cuts for billionaires and special interests,” he said. “Their bad faith negotiating strategy is the height of reckless and irresponsible partisan politics.”

However, Petersen and Montenegro panned Hobbs’ Prop 123 proposal as “a long-term raid on a critical resource.”

“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,” they said.

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