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Arizona GOP threatens legal action after Hobbs sends letter about tax rebate

Legislative Republicans believe that Arizona Gov. Katie Hobbs’ administration broke the law by discussing a new tax rebate.

A provision in the state’s annual budget was designed explicitly to prevent Hobbs from claiming credit for a one-time tax rebate that benefits nearly 750,000 Arizona families. 

Now, Republicans are preparing to go to court over a letter sent to eligible families by a state agency.

"No letter relating to the Arizona families tax 14 rebate issued under this section shall be sent from the governor's office, 15 be sent on the governor's letterhead or reference the governor's office," according to the law.

A spokesman for Hobbs says she followed the law by sending the letter from the Department of Revenue, not the Governor’s Office. That letter doesn’t mention Hobbs by name, but it does direct people to the governor’s webpage, where there is information about the rebate and a video of the governor. 

On Wednesday, an attorney representing House Speaker Ben Toma, R-Peoria, and Senate President Warren Petersen, R-Gilbert, sent a cease and desist letter to the Revenue Department.

GOP sends cease and desist letter

The lawmakers are also asking the attorney general to investigate whether the Hobbs administration committed a crime.

The lawmakers' attorney wrote “animating this provision was the Legislature’s concern that the governor would subvert a commonsense policy measure into a self-serving political stunt on the taxpayers’ dime.”

The letter goes on to say that Petersen and Toma “reasonably anticipate litigation arising out of this matter.”

Hobbs’ Communications Director Christian Slater said in a statement that the letters are in compliance with the law, and it’s unfortunate that Republicans “would waste taxpayer dollars litigating a URL.” Going forward, Slater said they will change the URL on letters moving forward. He said the first URL will now direct users to the Department of Revenue's part of the portal.

Hobbs said Wednesday that she’s always supported the rebate, in response to criticism from some Republican legislators who say she fought against it.

On X, formerly known as Twitter, several Republicans who were not involved in this year’s budget negotiations said that Hobbs shouldn’t be celebrating the rebate which was touted by the far-right legislative Freedom Caucus.

But Hobbs never made any public statements against the rebate, and claimed she always agreed with the Freedom Caucus on it. 

“I was never opposed to the tax rebate, it was part of the bipartisan budget that we negotiated. If you remember back to my executive budget; we had a tax credit. I was happy to come to an agreement on a way that we could put money back into the pockets of Arizonans,” she said.

Hobbs, GOP clash on if she supported rebate

TJ Shope
TJ Shope at the Arizona State Capitol in 2023.

More than 20 legislative Democrats voted for the rebate, but it was only a portion of the state taxation appropriation bill.

When pressed, members of the Republican caucus said they can’t remember Hobbs saying anything negative about the rebate, although it’s hard for them to believe she’s always supported it. Sen. T.J. Shope, R-Coolidge, said on X that he knows Hobbs wanted “no part” of the rebate. In a text, Shope later acknowledged he wasn’t a part of negotiations, but it was his understanding that “she’d have to accept” the rebate.

Senate Appropriations Chair John Kavanagh, R-Fountain Hills, said he didn’t speak to Hobbs about it, but it’s hard for him to believe she supported it. 

Hobbs did propose a permanent child tax credit in January, but that didn’t have enough support from GOP lawmakers.

Petersen declined to comment on whether Hobbs said she supported the rebate, and House Speaker Ben Toma, R-Peoria, did not respond to requests for comment.

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Camryn Sanchez is a field correspondent at KJZZ covering everything to do with state politics.