PHOENIX — The Republican-led Arizona Senate and House announced Thursday evening that they reached an agreement on the 2025-2026 state budget, which is expected to head to the governor’s desk next.
The House passed the budget late Thursday with such overwhelming support (40-16-4) it was able to bypass a three-day deliberation timeline. The Senate is expected to vote at 10 a.m. Friday.
“We were able to reach a consensus to fund the core functions of government. I appreciate the collaboration with the House over the past few days to get this spending plan across the finish line,” Senate President Warren Petersen said in the announcement.
“We have delivered a balanced budget with bipartisan priorities funded, like K-12 schools, transportation, public safety and protecting our small businesses. We believe this is a bipartisan spending plan that will get signed.”
The state budget needs to be passed by June 30 to prevent Arizona from experiencing its first government shutdown.
How did Arizona Congress reach budget agreement?
The budget initially proposed by House Republicans two weeks ago was called “dead on arrival” by Gov. Katie Hobbs. She specifically said the funding levels for health care and education were not acceptable. But that didn’t stop the Senate from passing it Wednesday.
The Senate already had passed its own $17.6 billion bipartisan budget package, one that Hobbs helped negotiate. However, House leaders expressed concerns about spending levels in the Senate plan and haven’t yet brought it to the floor for a vote.
Instead, the House passed a continuation budget on Tuesday night in an effort to keep the government open if negotiations continue beyond deadline.
“What we did yesterday was to say, ‘Look, we want to continue to have these conversations,’” House Speaker Steve Montenegro told KTAR News 92.3 FM’s The Mike Broomhead Show on Wednesday, before the Senate passed both House spending plans.
Montenegro said every aspect of government is funded at least at last year’s levels in the continuation plan.
“I’m confident we’ll be OK,” he said. “These conversations just need to continue to happen.”
Montenegro first announced that the House would pursue a continuation budget on Saturday. Hobbs responded by saying House leaders “abdicated their responsibility” during the negotiation process.
“Let me be clear: Any kind of partisan ‘continuation budget’ will immediately meet my veto pen, if it even has the votes to reach my desk,” Hobbs said in a statement.
On Wednesday, with the clock ticking, she carried out her veto threat.
She then issued a statement where she said, “it’s time for House Republican leadership to move past their political stunts and work productively with their colleagues before they force an unnecessary state government shutdown of their own creation.”
Meanwhile, Montenegro responded to Hobbs’ veto by saying that he was disappointed that she “vetoed two responsible budgets passed by the House.” The speaker added that the House had done its job twice when it passed its original budget and the continuation budget.
Senate President Warren Petersen expressed his frustration with his Republican counterparts in the House on Thursday.
“Let’s stop wasting people’s time. Let’s stop sending out mass confusion. Let’s get the work done and let’s wrap this up,” the Republican leader told The Mike Broomhead Show on Thursday.
President Pro Tempore of the Arizona Senate T.J. Shope put out a statement on X after the announcement, where he thanked Petersen and the Senate staff “who spent countless hours working on this budget that I was proud to support and whip votes for.”
Now, the House will need to vote on the budget they said it and the Senate had reached an agreement on before it is sent to Hobbs desk for her to sign.
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