Arizona Governor Katie Hobbs on Monday articulated a series of cautious initiatives aimed at enhancing housing, water security, and the business environment, as she gears up for a potential second term. With Republicans preparing to challenge her tenure, Hobbs’ fourth State of the State address highlighted her focus on making housing more affordable, ensuring water security, and adjusting business tax policies to support these goals.
One of the primary issues Hobbs addressed is the contrast between her tax cut proposals and those of the Republican-controlled House and Senate. While Republicans seek to integrate all of President Donald Trump’s previous tax cuts into Arizona’s tax code, Hobbs plans to oppose this, advocating for tax relief geared towards ordinary Arizonans, including overtime and tips tax reductions, without extending these benefits to corporations and millionaires.
“If you think billionaires and big corporations should get a tax break before hardworking families, then you need to spend more time with real Arizonans who are struggling to get by,” Hobbs stated.
Education reform also remains a focal point for Hobbs. Despite prior failures to modify the state’s universal school voucher program, she now emphasizes the need for increased oversight to prevent misuse of funds, citing instances of taxpayer money being spent on luxury items rather than educational purposes.
“It seems like every day, we learn about new shopping sprees happening at the expense of taxpayers—diamond jewelry, high-end clothing and furniture,” Hobbs said. “Who knows what taxpayers will be footing the bill for tomorrow?”
Additionally, Hobbs is advocating for the renewal of Proposition 123, which supports school funding through land trust withdrawals, calling for a straightforward extension without additional amendments.
On the environmental front, Hobbs announced the creation of a new “Active Management Area” in rural La Paz County to regulate water usage, highlighting the pressing need to address over-pumping by large corporate farms. She also proposed adjustments to water charges for data centers to better reflect their consumption.
“We can no longer sit idly by while our rural communities go without help,” Hobbs emphasized.
In terms of water rights, Hobbs called for federal intervention to ensure equitable water distribution among western states sharing the Colorado River. She emphasized that Arizona has borne a disproportionate share of water cuts and urged for a fairer agreement.
“The federal government can no longer watch these negotiations from the sidelines,” Hobbs continued. “They must ensure the upper basin is stepping up and conserving water like Arizona does, and get a deal done.”
Furthermore, Hobbs introduced an “Arizona Affordability Fund” aimed at alleviating the financial burdens faced by Arizona families. The proposed fund would assist with housing and utility costs, financed in part by a new tax on vacation rentals.
Building on her previous “Arizona is Home” initiative, Hobbs introduced a Housing Acceleration Fund to expedite affordable housing development, leveraging public and private finances to offer lower interest rates for homebuyers.
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