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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
VETOED
state budget implementation; 2025-2026
Purpose
Makes statutory and session law changes relating to budget implementation necessary to implement the FY 2026 state budget.
Background
The Arizona Constitution prohibits substantive law from being included in the general appropriations, capital outlay appropriations and supplemental appropriations bills. However, it is often necessary to make statutory and session law changes to effectuate the budget. Thus, separate bills called budget reconciliation bills (BRBs) are introduced to enact these provisions. Because BRBs contain substantive law changes, the Arizona Constitution provides that they become effective on the general effective date, unless an emergency clause is enacted.
H.B. 2960 contains the budget reconciliation provisions for changes relating to budget implementation.
Provisions
1. Continues to suspend the Budget Stabilization Fund cap of 10 percent of the state General Fund (state GF) revenue for FY 2026 and prohibits the State Treasurer from transferring any surplus monies from the Budget Stabilization Fund to the state GF.
2. States that the Legislature is not required to appropriate monies to or transfer monies from the Budget Stabilization Fund in FY 2026, FY 2027 and FY 2028.
3. Requires the Director of the Arizona Department of Administration (ADOA) to consult with and accommodate the policies of the budget units of the legislative branch of government in implementing ADOA's personnel and financial data management system and applications.
4. Continues to require, retroactive to July 1, 2025, any unrestricted federal monies received by Arizona in FY 2026 to be deposited in the state GF and used to pay essential governmental services.
6. Becomes effective on the general effective date, with retroactive provisions as noted.
Governor's Veto Message
The Governor indicates in her veto message that H.B. 2960, and this version of the FY 2026 budget as a whole, does not provide adequate funding for health care coverage and K-12 education and inadequately addresses priorities such as childcare affordability, veteran homelessness and public safety. The Governor encourages working in a productive fashion to deliver a bipartisan solution for Arizonans.
House Action Senate Action
APPROP 6/12/25 DP 11-7-0-0 3rd Read 6/25/25 16-11-3
3rd Read 6/13/25 31-0-29
Vetoed by the Governor 6/25/25
Prepared by Senate Research
June 17, 2025
AN/slp