Hobbs Takes Aim at ‘Entitlement’ Vouchers in Bold $17.7B Arizona Budget Revamp

Governor Katie Hobbs has unveiled a budget proposal targeting reduced spending on private school vouchers, which her administration has labeled an “entitlement” for affluent Arizonans. The proposed budget for the 2026 fiscal year amounts to nearly $17.7 billion and marks a shift in her strategy towards the Empower Scholarship Account (ESA) program.

In a notable change, Hobbs has moved away from her initial push to eliminate the universal voucher system entirely. This earlier proposal was dismissed by the Republican-controlled Legislature. Instead, her new plan seeks to introduce means testing, which would restrict the amount of funding that families with higher incomes can receive.

Since its expansion in 2022, the ESA program has allowed any K-12 student to access vouchers, irrespective of parental income, for private school tuition, homeschooling, or saving for college costs. Before the universal expansion, the program served around 12,000 students who met specific criteria; now, it has over 83,000 participants, with a budget nearing $1 billion.

In 2022, Hobbs proposed eliminating the extended portion of the ESA program and suggested a requirement for students to attend a public school for at least 100 days before receiving a voucher. This year’s budget proposes graduated income limits, where households earning $100,000 or less would be eligible for full reimbursement, with reductions for incomes up to $200,000. However, these reforms face significant resistance from the Republican-majority Legislature.

Republicans championed the voucher program’s expansion in 2022 and have consistently praised school choice. Hobbs’ office estimates that 73% of students in the universal portion of the program—roughly 55,600—had not attended public school prior to receiving their vouchers. Spokesman Christian Slater emphasized the governor’s commitment to enhancing accountability within what he refers to as an entitlement program.

Hobbs is simultaneously advocating for an additional $285.6 million in funding for public K-12 schools. However, the new funding’s status hinges on the possible extension of Proposition 123, which is set to expire at the end of June. The 2015 Proposition 123 allowed for increased distribution from the State Land Trust to support K-12 education, but future negotiations between Hobbs and GOP legislators remain unresolved.

In response to Hobbs’ proposal, Arizona House Speaker Steve Montenegro acknowledged the need for a responsible budget while expressing concerns regarding issues such as parental choice and taxpayer burden. Montenegro stated, “Our House Republican Majority remains focused on policies that support hardworking families and encourage job creation.”

The Senate had a similar assessment, with spokesperson Kim Quintero noting that while some concerns in the proposal align with Republican priorities, they believe aspects of the governor’s plan would place an undue financial strain on taxpayers.

Hobbs’ proposed budget incorporates $886 million in one-time spending, representing an increase of over $1 billion from last year’s bipartisan budget of $16.1 billion. Anticipated revenue growth due to a stable state economy provides a basis for these expenditures, despite potential uncertainties related to federal policy changes.

Among other initiatives, Hobbs intends to increase the rainy day fund to $1.54 billion and allocate funds for various programs, including a $10 million expansion of the Arizona Low Income Housing Tax Credit, $15 million for the Housing Trust Fund, and $5 million for a veterans’ housing initiative. Plans for childcare improvement also feature prominently, with over $7 million earmarked for partnerships aimed at increasing childcare availability.

Further education funding includes $40 million for the Arizona Promise Program, alongside financing for the Arizona Teachers’ Academy and operational support for state universities. Additionally, the budget proposes significant investments in public safety and healthcare programs, targeting areas such as drug interdiction and services for crime victims.

Overall, the complexities surrounding the proposed budget reflect ongoing debates about educational funding, fiscal responsibility, and priorities within state governance.