Highlights
- Gov. Katie Hobbs signed an $18.3 billion state budget Saturday, her fourth bipartisan deal in office.
- The package includes $1.4 billion in tax cuts and a three-year moratorium on new data center tax incentives projected to save $57 million.
- Prop. 123 education funding renewal was not included; the budget instead backfills roughly $300 million from the general fund for public schools.
- The Department of Corrections received $55.8 million for court-mandated healthcare staffing, well below Hobbs' $118.3 million request.
Gov. Katie Hobbs signed an $18.3 billion state budget Saturday that delivers $1.4 billion in tax cuts, imposes a three-year moratorium on new data center tax incentives, and cuts agency budgets by 2.5%, closing out a legislative session that stalled for months before a bipartisan deal emerged.
The tax package fully conforms Arizona's code to federal cuts enacted under President Donald Trump's One Big Beautiful Bill Act, making Arizona, according to Senate President Warren Petersen, "the only state in the nation fully adopting President Trump's tax package." The conformity eliminates taxes on tips and overtime, raises the standard deduction, adds a $6,000 deduction for seniors, creates a new childcare expense deduction, increases the child tax credit, and extends property tax exemptions to disabled veterans.
For Hobbs, the headline win was the data center moratorium. She had originally sought to repeal the incentives entirely, which allow developers to apply to the Arizona Commerce Authority to exempt certain projects from transaction privilege and use taxes. The three-year pause on new applications is projected to save the state $57 million while leaving existing projects intact. At a June 11 press conference, Hobbs called the budget a "responsible balance" between data center growth and community concerns
Sources
Every factual claim in this article traces to one of the sources below. See how we work for the editorial process.
- azcapitoltimes.com retrieved 13/06/2026 22:18
Authored by The Scottsdale Signal. Drafted by AI from primary-source material under our beat-specific editorial guides; reviewed by humans before publish under our five-gate process. Sources retrieved at 13/06/2026 22:18. Every claim traces to a source.
