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Arizona

Democrat

Governor Katie Hobbs

Region: West

Governor Katie Hobbs addressed 14 policy topics in the 2026 State of the State address.

Education

Governor Hobbs sharply criticized the ESA program for waste, fraud, and abuse — citing taxpayer-funded diamond jewelry and high-end clothing purchases — while maintaining support for the program's original mission to help children with disabilities and military families. She called for renewing Prop 123 to invest in public schools without raising taxes and urged legislators to keep divisive partisan policies out of the negotiations.

Healthcare

Governor Hobbs highlighted her initiative to cancel medical debt, erasing $642 million for nearly half a million people 'without costing the state government a dime.' She criticized the federal government's healthcare cuts, noting the partisan Washington budget 'slashed Medicaid, endangering the future of Arizona's rural hospitals in order to pay for tax breaks for billionaires.' She also announced she would eliminate prior authorization requirements from insurance companies and proposed banning medical debt from credit reports.

Economy & Jobs

Governor Hobbs emphasized economic wins including TSMC's historic foreign direct investment, Cognite as the first AI company headquartered in Arizona, and Dutch Bros relocating from Oregon. She criticized Trump tariffs for raising costs and proposed eliminating the $38 million data center tax exemption, stating "it's time we make the booming data center industry work for the people of our state." She also proposed a middle-class tax cuts package worth over $200 million.

Infrastructure

Governor Hobbs announced a new Active Management Area for La Paz County to protect groundwater infrastructure, a $30 million Colorado River Protection Fund, and a Housing Acceleration Fund to build affordable housing faster. She highlighted the reactivation of the Greater Arizona Development Authority, which enabled rural infrastructure projects like the Panther Drive Bridge in Superior, and emphasized investing in rural broadband and energy infrastructure while calling for data centers to pay their fair share for water use.

Public Safety

Governor Hobbs highlighted Operation Desert Guardian, a multi-agency initiative targeting transnational criminal organizations, which has seized over $105 million worth of drugs, more than 16,000 pounds of fentanyl, over 1,200 illegal firearms, and resulted in more than 1,400 arrests. She deployed the Arizona National Guard to the southern border and criticized federal immigration enforcement for neglecting drug smuggling cases. She called on the federal government to repay over $700 million in border security expenses since 2021.

Environment & Energy

Governor Hobbs proposed eliminating the Data Center Tax Exemption (a $38 million corporate handout) and requiring data centers to pay their fair share for water, with revenue funding a new Colorado River Protection Fund. She announced a new Active Management Area for La Paz County to crack down on groundwater pumping by out-of-state interests. She highlighted Operation Desert Guardian's counterdrug operations and called for a $30 million Colorado River Protection Fund, while defending ongoing Colorado River negotiations against upper basin states.

Housing

Governor Hobbs made housing affordability a central theme, noting that Maricopa County led the nation in housing construction in 2024 and that housing prices are declining. She announced a new Housing Acceleration Fund that leverages public and private dollars to generate up to ten dollars for every dollar invested, kickstarted with a $2.5 million investment. She also highlighted the Arizona is Home program providing down payment assistance, approval of over 60,000 single-family homes in the West Valley, and actions to allow more housing construction without government red tape.

Tax & Budget

Governor Hobbs made affordability her top priority, calling on the legislature to immediately pass a Middle Class Tax Cuts Package delivering over $200 million in tax relief through increased standard deductions, cuts on overtime and tips, and senior relief. She proposed eliminating the $38 million Data Center Tax Exemption and creating a new Arizona Capacity and Efficiency Initiative to save up to $100 million over three years. She emphasized her budget was bipartisan and balanced, contrasting it with the federal budget.

Technology

Governor Hobbs proposed eliminating the Data Center Tax Exemption, calling it a $38 million corporate handout, and proposed making data centers pay one cent per gallon for water used — the same rate as average families. She welcomed Cognite as the first AI company headquartered in Arizona and celebrated TSMC's historic investment, but argued the data center industry must work for the people rather than the other way around.

Agriculture

Governor Hobbs announced a new Active Management Area for La Paz County to crack down on out-of-state special interests pumping groundwater, directly impacting local farmers. She emphasized that water conservation and economic development must coexist, rejecting the notion that protecting water requires sacrificing farms, jobs, and businesses.

Government Reform

Governor Hobbs announced a new Arizona Capacity and Efficiency Initiative — a series of cost-saving measures projected to save up to $100 million over three years. She emphasized the approach would 'streamline, consolidate, and cut costs to make government work for our people' without decimating important services, and proposed eliminating the Data Center Tax Exemption as a $38 million corporate handout.

Social Services

Governor Hobbs launched a historic initiative to cancel medical debt, erasing $642 million for nearly half a million people without costing the state government. She proposed the Arizona Affordability Fund to help working-class families pay utility bills and weatherize homes, starting with a $20 million investment funded by a nightly fee on short-term rentals. She also announced a Housing Acceleration Fund leveraging public and private dollars to multiply affordable housing construction.

Affordability

Governor Hobbs made affordability her "top priority," calling for an over $200 million Middle Class Tax Cuts Package including increased standard deductions, tax cuts on overtime and tips, and senior relief. She announced the cancellation of $642 million in medical debt for nearly half a million people, proposed a Housing Acceleration Fund, created an Arizona Affordability Fund with $20 million to help with utility bills and housing, and called for eliminating the Data Center Tax Exemption worth $38 million. She also proposed making data centers pay their fair share for water.

Immigration

Governor Hobbs took a nuanced stance, deploying the Arizona National Guard to the southern border and launching Operation Desert Guardian, which seized over $105 million worth of drugs and made over 1,400 arrests. However, she criticized the federal government for using "law enforcement resources to score political points in cities thousands of miles from the southern border" and demanded reimbursement for over $700 million in state border security expenses since 2021.