WATCH: Arizona governor’s State of State stresses economy

By Chris Woodward
The Center Square

Arizona Gov. Katie Hobbs is making affordability her top priority this year.

The Democratic governor made the announcement Monday afternoon in her State of the State address before a joint session of the Legislature.

She noted Arizona has created tens of thousands of jobs and increased tax home pay for workers, as well as lowered the cost of child care, prescription drugs and housing to support working families and businesses.

But, Hobbs said, more needs to be done.

“Affordability isn’t a joke or some hoax,” the governor told senators and House members at the Capitol in Phoenix. “It is a real and consequential challenge that families across Arizona must grapple with every day.”

One way Hobbs thinks issues can be resolved is through tax relief for the middle class. She also called for billionaires to pay more taxes.

“If you think billionaires and big corporations should get a tax break before hard-working families, then you need to spend more time with real Arizonans who are struggling to get by,” said Hobbs.

The governor said she can relate to the struggles that parents and families experience today. Hobbs spoke of working multiple jobs to feed her children and put a roof over their heads. She explained it was these experiences that helped her understand “how it feels to work hard every day only to come up short on the bills” at the end of the month.

On the environmental front, Hobbs criticized the federal government’s “incomprehensible decision” to deny Arizona’s emergency funding request to help the Globe and Miami communities that suffered devastating floods in 2025.

“Families have had their lives shaken and their livelihoods destroyed,” said Hobbs. “I hope elected officials on both sides of this chamber and in Congress join me in calling on FEMA [Federal Emergency Management Agency] to right this wrong and reverse their callous decision to deny our communities emergency assistance.”

Meanwhile, Hobbs wants data centers to “pay their fair share” for the water they use. Hobbs said it is time to make the booming data center industry work for the people of Arizona, not the other way around.

When it comes to border security, Hobbs said her administration is helping protect Arizonans.

She appeared to refer to the efforts by the U.S. Department of Homeland Security and the U.S. Immigration and Customs Enforcement in various cities. “While the federal government uses law enforcement resources to score political points in cities thousands of miles from the southern border, Arizona is laser-focused on securing the border, getting drugs off the streets and cracking down on criminals poisoning our neighborhoods and our children.”

The effort has not been cheap, and Hobbs said Arizona should be reimbursed.

“We have consistently picked up the slack for the federal government, racking up a tab of over $700 million in border security expenses over the last five years,” said Hobbs. “I made it clear to both the Biden and Trump administrations that we expect to be paid back.”

Hobbs later called for better oversight of Arizona’s Education Savings Account program. Hobbs said it is time for the state to tackle the “waste, fraud and abuse” to ensure taxpayer dollars are going toward what she called true educational purposes.

“While other government entitlements have strict requirements and oversight, the ESA program continues to operate unchecked, squandering taxpayer dollars with no accountability,” said Hobbs. “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 admitted that not everyone in the room would agree with her on issues, but she said that Arizonans are counting on them to deliver. She said it’s time to get to work.

After her address, Senate President Pro Tem T.J. Shope, R-Coolidge, appeared in a video saying that families are hurting today because of the Hobbs administration. Shope said Republicans are working to make things better.

“Senate Republicans are focused on lowering costs, protecting parental rights, strengthening public safety, and keeping Arizona free, competitive and affordable,” Shope said in the video emailed to The Center Square and other media.

Senate Majority Leader John Kavanagh, R-Fountain Hills, also appeared in the video. Standing next to Shope, Kavanagh said things have not gone well during the governor’s time in office.

“Costs are higher, trust is lower, and too many problems remain unresolved,” said Kavanagh.

The Republican Governors Association also issued a statement saying that Hobbs proved she has no solutions to the problems Arizonans are facing today.

“Hobbs has turned a budget surplus into a budget deficit, while giving her friends and donors sweetheart deals totaling hundreds of thousands in taxpayer dollars,” said RGA Deputy Communications Director Kollin Crompton. “Arizonans deserve better leadership, and in 2026, they will hold her accountable.”

The general election is scheduled for Nov. 3. Three Republicans – U.S. Rep. Andy Biggs, R-Gilbert; Karrin Taylor Robson and U.S. Rep. David Schweikert, R-Scottsdale – are running for governor in the Aug. 4 primary. The winner will face Hobbs, who isn’t facing any Democratic opponents, in the general election.

Seated behind Hobbs during her address were Assembly Speaker Steve Montenegro, R-Surprise, and Senate President Warren Petersen, R-Gilbert. Previously, Petersen told The Center Square that affordability tops legislative priorities for the Republican majority.