Capitol roundup: Republicans unveil budget as stalemate continues

Capitol roundup: Republicans unveil budget as stalemate continues

Legislative Republicans unveiled the budget proposal that Gov. Katie Hobbs demanded when she imposed her bill moratorium last month, but the two sides don't seem any closer to an agreement.

State of play: The roughly $18 billion Republican budget spends about $800 million less than Hobbs proposed in January.

  • Notable provisions and likely friction points with the governor include:

    • 💵 Nearly full implementation of federal tax cuts from last year's One Big Beautiful Bill Act — she's already vetoed two Republican tax conformity plans this session — which will cost about $1.45 billion over the next three years.

    ✂️ Across-the-board 5% budget cuts to all state agencies except the departments of public safety, child safety and corrections, which would save about $99 million.

    🌞 The repeal of tax exemptions and credits for solar and other renewable energy.

  • The GOP budget doesn't include Hobbs' proposed repeal of a tax exemption for data centers.

    • 🍲 Cuts to nutrition assistance and Medicaid programs.

    ⚕️ A 10% increase in state employees' health insurance premiums.

    🏫 And the proposal doesn't include a plan to renew the expired education funding measure Proposition 123. Hobbs walked away from budget talks in March over Republicans' refusal to negotiate renewal with her.

    The intrigue: Someone has to pick up the phone and begin negotiations — and neither side has been inclined to make the first move.

  • "We're waiting for her to pick up the phone, email us, text us. She's welcome to show up here," House Speaker Steve Montenegro (R-Goodyear) told Capitol Media Services.
  • Hobbs spokesperson Christian Slater said the administration is "monitoring their actions to determine if they are serious about engaging in good-faith bipartisan negotiations rather than playing political games."

    • What we're watching: Hobbs threatened to veto bills until Republicans presented a budget, but she isn't committing to lifting the bill moratorium and GOP lawmakers haven't yet tested her by sending new legislation to her desk, and Slater told Axios it's "not quite" over.