Hobbs halts budget negotiations with GOP lawmakers over public school funding dispute

Democratic Gov. Katie Hobbs announced Friday that she is pulling back from state budget negotiations with Republican lawmakers over a dispute on funding for Arizona public schools.

In a statement, Hobbs said she won’t negotiate any more until GOP lawmakers put out their own budget plan. And she accused Republican leaders of refusing to seriously discuss a renewal of Proposition 123, a voter-approved measure that used revenue from the State Land Trust to fund public education — at least before it expired last year.

Democrats and Republicans have been arguing about how to renew the measure for the past three years. Prop. 123 accounted for roughly $300 million in school funding.

Last year, after Prop. 123 expired, lawmakers backfilled that money from the state general fund, rather than ask voters to reapprove the funding mechanism.

“Legislative Republicans are holding teachers, students and parents hostage to their partisan agenda by refusing to discuss Prop. 123 proposals in budget negotiations,” Hobbs’ spokesperson Christian Slater said in a statement.

Hobbs wants to put the question to voters this year and increase the amount of revenue from the land trust, but Republicans oppose her plan.

“We have shown the Governor's Office a balanced budget with tax conformity. We've put forward a responsible plan that cuts taxes for working families and funds schools without gimmicks. She walked away from the table because her math doesn't work,” Republican legislative leaders said in a joint statement.

They accused Hobbs of distorting the facts and throwing a temper tantrum.

"Gov. Hobbs chose to walk away from budget negotiations despite a path forward being within reach,” lawmakers said.

As for her Prop. 123 plan, GOP leaders said increasing funding drawn for public education would damage the state land trust.

“That approach would bankrupt the trust and rob future education funding from our children just to please unions today,” lawmakers said.

In 2024 and 2025, Republican lawmakers seemed keen to get their own alternative Prop. 123 renewal plan passed, but this year, Hobbs said they aren’t interested in passing a renewal in any form.

“They have flatly refused to consider a Prop 123 ballot referral measure,” Hobbs said in a statement.

Democrats have also accused Republicans of failing to come up with a way to pay for substantive proposed tax cuts.