Warren Petersen says $18.29B budget is ‘99%’ what Republicans wanted

Arizona Senate President Warren Petersen said Wednesday that the bipartisan budget deal with Gov. Katie Hobbs delivers the largest state-level tax relief package in the country.

He isn’t shy about calling it a Republican victory.

Speaking on KTAR News 92.3 FM’s The Mike Broomhead Show Wednesday morning, Petersen said Arizona is the first state to adopt President Trump’s federal tax cuts at the state level.

In practice, that means no state tax on tips, no tax on overtime, a higher standard deduction and new relief for seniors and families.

“The big win is for Arizona, but it’s also for families, kids,” Petersen said. “We protected school choice. We didn’t do any of the tax increases or fees that the governor wanted.”

The $18.29 billion spending plan delivers roughly $1.45 billion in tax relief over four years while holding spending growth to just over 3%.

“That budget is 99% what we put on,” Petersen explained, saying this budget is close to what Hobbs rejected earlier this year. “We didn’t really have to move that far.”

Democrats see the Arizona budget differently

Hobbs also called the budget agreement a win for working families.

“It will put money back in the pockets of Arizona families and lower costs, make our communities safer and protect the vital services that Arizonans rely on,” Hobbs said in a statement.

Senate Democratic Leader Priya Sundareshan said the deal only happened because her caucus rejected an earlier partisan proposal and forced negotiations.

“This budget is better because Democrats fought for it,” Sundareshan said in a statement.

Schools, safety and spending cuts

Petersen defended the budget’s approach to education, saying the Empowerment Scholarship Account program, Arizona’s school voucher system, remains fully intact with no income limits.

The budget also includes $37 million in opportunity weight funding, dollars tied to free and reduced school lunch, a sticking point for Democrats at the negotiating table.

Petersen said the budget exempts the Department of Public Safety from a 2.5% cut applied to most other state agencies.

DPS will also receive supplemental funding that Petersen said is critical to keeping troopers on the road and reducing freeway fatalities.

“DPS was running out of funds, and we put that on the governor’s desk, and she vetoed it, but that is included now in this,” Petersen said. “DPS is now going to have those supplemental funds and be able to make sure that they have the money they need to keep Arizona safe.”

Corrections officers will also see a permanent pay increase, and the budget includes funding for sheriffs, county probation and victim assistance programs statewide, explained Petersen.

A three-year pause on data center incentives

The budget also includes a three-year moratorium on tax incentives that had been used to lure data centers to Arizona.

“When the governor came out with her State of the State, she said she wanted to eliminate (data center tax incentives), and what ended up being the compromise on that was a three-year moratorium,” said Petersen.

Democrats called the pause the largest of its kind in the nation.

Overall, Hobbs called the budget agreement a win for working families.

Budget bills are expected to clear the Appropriations Committee Wednesday, with final votes anticipated Thursday.

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