How Arizona Will Combat Staggering $1 Billion Deficit

By: Ben Campbell | Published: Jan 15, 2024

Arizona’s governor plans to tackle her state budget deficit that’s closing in on $1 billion by bringing accountability to the school voucher system, which is expected to cost the state over $900 million. 

Gov. Katie Hobbs also plans to change laws, allowing Arizona citizens to cope better with the harsh droughts affecting the state. 

Democratic Govenouer Address State

Katie Hobbs took on the role of Arizona’s governor last year, replacing Doug Ducey, who served for nearly eight years (via PBS). 

Arizona Democratic gubernatorial candidate Katie Hobbs delivers remarks at a campaign event

Source: Kevin Dietsch/Getty Images

When she addressed the politicians of Arizona during the State of the State meeting in January, Hobbs brought up various problems she aims to solve, including the enormous deficit and the Arizona-Mexican border situation. 


Billion-Dollar Deficit Set to Hit Arizona

The Grand Canyon state is entering a difficult time as its political leaders come to terms with the idea that they may be in a deficit of close to $1 billion. 

Hand Holding Fan of Us Dollar Bills

Source: Karolina Grabowska/Pexels

According to reports, Arizona will experience close to a $400 million deficit in its current budget. Yet, experts say another deficit of over $450 million is forthcoming in the next 12 months, bringing the grand total to $850 million. 

Deficit Blamed on School Program

The blame for the ever-increasing deficit has been ascribed to numerous decisions made by the previous governor, including his expansion of a school voucher system that helps parents with schooling costs. 

A large group of school students gather around one computer desk to speak with their friends

Source: Freepik

Also, a law promising tax cuts passed in 2021 was in full swing last year, resulting in around 30% less cash flow for the state from July to November.

Doug Ducey Extended the Problem

Back in 2022, the former governor of Arizona, Doug Ducey, signed an extension to the school voucher system. Now, it appears the program will eat up around $900 million of the state’s cash. 

Woman Reading A Book To The Children

Source: Yan Krukau/Pexels

However, it appears Gov. Hobbs will be looking to reduce the amount of money spent on the school program in an attempt to reduce the state’s budget deficit. 

Lawmakers Try to Fix What They Can

While Arizona lawmakers admit that while there’s nothing they can do about the tax cuts, they can save a significant portion of the state’s tax revenue by reducing the voucher program. 

Gov. Katie Hobbs, dressed in a patterned dress, prepares to give a talk during an event

Source: @GovernorHobbs/X

Gov. Hobbs said: “We will rein in wasteful spending without sacrificing public safety and public education. We will establish guardrails on unaccountable programs without hurting hardworking families” (via The Associated Press).


School Program Costs Skyrocket Beyond Initial Expectations

The school voucher program was first passed in 2011. During this time, it aimed to help disabled children but was later expanded to include all students in the state by 2022. 

A group of schoolchildren stand at the front of their classroom to talk

Source: Freepik

The program’s budget was estimated to cost around $64 million. Yet, by the end of the year it could surpass $900 million, a figure many believe is a burden to the state. 


Changes to the Voucher System

After taking the reins of the state over a year ago, Hobbs came prepared to implement substantial changes. Yet, Democratic lawmakers expressed their dissatisfaction with Hobbs after she failed to place a cap on the program’s expansion. 

Children run down a hallway in their school as they smile and play

Source: Freepik

Now, the governor has called for greater transparency and accountability in the voucher program. She wants to implement a significant change that would force schools to ensure teachers and children attend for over three months before vouchers are issued. 


Republican Aims to Block Gov. Hobbs

Republican Sen. John Kavanagh claims Hobbs’ planned changes to the voucher program have no chance of being accepted by legislators. 

Source: Joe Raedle/ Getty Images

“We are not going to regulate schools that parents choose and are working well,” he said (via The Associated Press).


Legislature Focused on Long-Term Drought Problem

Gov. Hobbs also announced she plans to tackle the state’s water problem following extended periods of drought. With future shortages from the Colorado River expected, she claims it’s time to ensure the groundwater is protected. 

Photograph of an arid desert surrounded by hills with little to no greenery

Source: Freepik

“For decades, rural Arizonans who have begged, demanded, and fought to protect their groundwater have been ignored,” she said. “Now, after 40 years of waiting, it’s time we finally take action and update our groundwater management laws.”


Solving the Problem

According to Hobbs, she has requested the Arizona Department of Water Resources to devise a plan to ensure the state has a 100-year water supply. 

Water flows from a small bronze tap into a large pool made from stone

Source: Freepik

A few solutions to the problem may be implementing new water sources and reducing the amount of groundwater pumping from farms. 


Achieve More by Working Together

Arizona State University’s director of research for water policy, Kathyrn Sorensen, claims she was inspired by Hobbs’ promise to solve the water shortage problem. 

Photograph of a small team of co-workers seated at a wooden desk

Source: Freepik

However, she was quick to remind everyone that “water is a nonpartisan issue, and we can achieve more by working together.”