Arizona Republican lawmakers announced on April 27 a new state budget package that delivers $1.45 billion in tax relief, aligning state tax law with President Trump’s federal tax cuts for the current year. The proposal includes eliminating state taxes on tips and overtime pay, increasing dependent tax relief for parents, creating a childcare expense deduction, strengthening retirement tax benefits for seniors, supporting small businesses, and helping working families retain more income.
Supporters say the plan targets Arizonans facing inflation and cost-of-living challenges. Arizona is reportedly the only state advancing the full Trump-era federal tax cuts into its own laws. Unlike Governor Hobbs’ proposal, Republican leaders said their budget relies on what they call realistic revenue projections without depending on speculative sources or introducing new taxes or discretionary spending.
Senate President Warren Petersen said, “Arizona Republicans are delivering one of the largest tax cuts in state history, and our proposal has the votes to pass both chambers.” Petersen added that Governor Hobbs previously claimed full conformity to federal tax relief was impossible but stated that “Republicans balanced the budget with honest numbers, protected core priorities, and provided real relief for families still struggling with higher costs.”
Earlier this year Republicans moved to align Arizona’s state tax law with federal guidelines during filing season but faced vetoes from Governor Hobbs. Lawmakers then sent another bill conforming to forms issued by her Department of Revenue; it was also vetoed. Budget negotiations stalled when Governor Hobbs left talks over disagreements about spending levels versus available revenue.
House Speaker Steve Montenegro said: “House and Senate Republicans put forward a serious budget built on facts, not wishful thinking. It delivers major tax relief… fully funds core state services… does not rely on gimmicks… or money that may never show up to balance the budget.” Montenegro called for swift passage of the bills so Arizona can finish its legislative session responsibly.
The proposed legislation is scheduled for review at a joint hearing of Senate and House Appropriations Committees at 10:00 a.m., Tuesday in House Hearing Room 1. Michael Carbone serves as one of Arizona’s Republican representatives after being elected in 2023 to represent District 25 according to Ballotpedia.
