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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
VETOED
local government; FY2026
Purpose
Makes session law changes relating to local government 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. 2970 contains the budget reconciliation provisions for changes relating to local government.
Provisions
1. Continues to allow a county with a population of fewer than 250,000 persons to meet any fiscal obligation for FY 2026 from any source of county revenue designated by the county, including monies of any county special taxing jurisdiction where the board of supervisors serves as the board of directors.
2. Continues to cap, at $1,250,000, the amount of money a county may use for purposes outside the county's revenue source.
3. Continues to require a county with a population of fewer than 250,000 persons, by October 1, 2025, to report to the Director of the Joint Legislative Budget Committee:
a) whether the county used a revenue source for purposes other than the revenue source's intended purposes to meet a county fiscal obligation; and
b) the specific source and amount of revenues that the county intends to use in FY 2026.
4. Becomes effective on the general effective date.
The Governor indicates in her veto message that H.B. 2970, and this version of the FY 2026 budget as a whole, does not provide adequate funding for first responder pay raises, childcare, infrastructure, K-12 schools and higher education and removes efforts to combat veteran homelessness. The Governor encourages working in a productive fashion to deliver a bipartisan solution for Arizonans.
House Action Senate Action
APPROP 6/24/25 DP 11-6-0-2 3rd Read 6/25/25 16-11-3
3rd Read 6/24/25 31-25-4
Vetoed by the Governor on 5/25/25
Prepared by Senate Research
June 26, 2025
AN/SDR/slp