ICYMI: Republicans Praise Governor Katie Hobbs' “Fiscal Conservatism”

Phoenix, AZ -  After Governor Katie Hobbs directed state agencies to strictly limit budget requests, Senate Majority Leader John Kavanagh praised the governor’s “fiscal conservatism” and “conservative and realistic approach” to budgeting.

ABC15: Gov. Katie Hobbs tells state agencies: No big funding increases next year

• ABC15 has learned Gov. Katie Hobbs’ office has asked agencies to sharply limit any requests for additional money from the state’s general fund. Her budget director, Ben Henderson, sent Cabinet members a memo last month asking agencies to keep increases below 2%, citing a looming “cliff in federal funding unlike anything in recent history.”
• Senate Majority Leader John Kavanagh told ABC15 he welcomes Hobbs’ budget restrictions, saying the governor is “steering her ship in the right direction.” “I applaud the governor's fiscal conservatism, limiting agency increases at 2%,” he said.
• In a statement to ABC15, the Governor’s Office said Hobbs is committed to delivering a balanced budget but faces funding cuts from President Donald Trump’s big tax bill and the effects of tariffs.
• Hobbs has said for months that the state can’t cover all of the funding cut by the federal government.

Arizona Capitol Times: State agencies told to limit budget requests due to looming federal funding cuts
 

• The Governor’s Office is instructing state agencies to significantly limit their budget requests for fiscal year 2027 due to federal funding uncertainties.
• A letter sent by Gov. Katie Hobbs’ budget director, Ben Henderson, to state agency heads on July 18 instructed all agencies to cap their FY2027 budget requests from the state’s general fund to no more than a 2% increase from what they were appropriated from the general fund in the FY2026 budget.
• Hobbs has said on multiple occasions that the state does not have the revenue to backfill cuts from the federal government. There is a chance agencies could get more than they request in FY2027, but it will depend on the status of the state’s revenues and budget negotiations between lawmakers and the governor next year. 
• Sen. John Kavanagh, R-Scottsdale, served as the Senate Appropriations Committee chairman this session and shepherded the FY2026 budget through the Legislature. He told the Arizona Capitol Times that he hadn’t been made aware of the 2% limit but isn’t entirely opposed to it.
• “I applaud the conservative and realistic approach that the Governor’s Office is taking, although I’m not sure if a flat 2% is wise, given that some agencies might be able to weather cuts and others might need an increase of more than 2%,” Kavanagh said.
• The governor’s directive comes after tax hikes, budget cuts and new red tape and administrative mandates from the Trump administration have strained Arizona’s budget, slashing health care and food assistance from Arizonans.

WATCH, AZ Family: Gov. Hobbs tells state agencies to limit spending increases