 |
ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
VETOED
FACT SHEET FOR H.B. 4140/S.B. 1833
2026-2027; state budget implementation.
Purpose
Makes session law changes relating to budget implementation necessary to implement the FY 2027 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. 4140 contains the budget reconciliation provisions for changes relating to budget implementation.
Provisions
1. Continues to require, retroactive to July 1, 2026, any unrestricted federal monies received by the state in FY 2027 to be deposited in the state General Fund (state GF) and used to pay essential governmental services.
2. States that the Legislature is not required to appropriate monies to or transfer monies from the Budget Stabilization Fund in FY 2027 and FY 2028.
3. Continues to suspend the Budget Stabilization Fund cap of 10 percent of the state GF revenue for FY 2027 and prohibits the State Treasurer from transferring any surplus monies from the Budget Stabilization Fund to the state GF.
4. Requires the Governor's executive budget submission to the Legislature for FY 2028 to include:
a) a full accounting of monies available for expenditure from the government efficiency and reform initiative savings; and
b) a report that demonstrates how the government efficiency and reform initiative savings target of $100,000,000 will be accomplished including a comprehensive list of component initiatives, by savings amount, for each affected agency.
5. Becomes effective on the general effective date.
Governor's Veto Message
The Governor indicates in her veto message that H.B. 4140, and this version of the FY 2027 state budget as a whole, would cause Arizona to default on its debt obligations, endanger vulnerable children, cut public safety funding and provide tax breaks for billionaires, data centers and special interests. The Governor outlines her specific concerns, including cuts to funding for specified agencies and programs, and invites the Legislature to return to the negotiating table.
House Action Senate Action
APPROP 4/28/26 DP 11-7-0-0 ATT 4/28/26 DP 6-4-0
3rd Read 4/29/26 33-20-7 3rd Read 5/4/26 16-12-2
(H.B. 4140 was substituted for S.B. 1833 on 3rd Read)
Vetoed by the Governor 5/5/26
Prepared by Senate Research
May 6, 2026
AN/hk