Arizona Gov. Katie Hobbs has vowed to bring accountability to a school voucher program that’s expected to top $900 million this year and update laws that allow for the nearly unfettered use of groundwater in rural areas of the drought-stricken state.

The Democratic governor, making her second annual state of the state address Monday as the Legislature began its regular session, also leveled criticism at the federal government. She blamed it for closing a key port of entry along the Arizona-Mexico border for one month because of a surge of immigrants and touted her decision to send National Guard members to the international boundary in response to the crisis.

The state is facing a $400 million shortfall in this current budget year and another $450 million deficit in the coming year. Those numbers are mainly due to the skyrocketing costs of a 2022 expansion of the voucher program and a 2021 tax cut that took full effect last year and reduced incoming tax revenues by about 30% from July through November.


Budget analysts say the shortfall will likely grow when the state’s next revenue forecast is released later this month. Democrat lawmakers concede the tax cut won’t likely go away, but they want to overhaul the voucher program.

“We will rein in wasteful spending without sacrificing public safety and public education,” Hobbs said in the prepared text. “We will establish guardrails on unaccountable programs without hurting hard-working families.”

Hobbs also called for creating a new division in state government to oversee the affordability of prescription drugs, capping prices on commonly used drugs such as insulin and preventing huge price hikes. And she promised to work to help solve Arizona’s housing crisis with initiatives including a new mortgage assistance program for working-class families.

Water will also be a focus for the Legislature amid a severe, long-term drought in the arid southwestern state. Concerns are growing in Arizona about future shortages from the Colorado River system, which supplies about 40% of the state’s water.

Hobbs noted her crackdown last year on a Saudi-operated farm that residents feared was depleting precious groundwater for thirsty alfalfa crops. And she promised to do more to protect water this year.

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


Hobbs said she had directed the Arizona Department of Water Resources to finalize a new, alternative way for water providers and communities to achieve a 100-year assured water supply through the reduction of groundwater pumping and contributions of new water sources. That would affect far-flung communities in metro Phoenix where subdivision construction has been paused due to concerns about insufficient groundwater.

Kathryn Sorensen, director of research for Arizona State University’s Kyl Center for Water Policy, said she was struck by Hobbs’ promise to legislators who have refused to act on water issues: “If you don’t, I will.”

Sorensen also said Hobbs’ call for bipartisan cooperation on the future of Arizona was important as she “reminded everyone that water is a nonpartisan issue and we can achieve more by working together.”

Regarding education, the school voucher program that Hobbs wants to rein in lets parents use public money for private-school tuition and other education costs. It started in 2011 as a small program for disabled children but was expanded repeatedly over the next decade and became available to all students in 2022.

Originally estimated to cost $64 million for the current fiscal year, the program could ultimately top $900 million, budget analysts say. Critics say the expansion is a drain on the state, while backers say the expansion lets parents choose the best school for their children.

Sen. John Kavanagh, a Republican who chairs the Senate Appropriations Committee, said Hobbs’ ideas for changing the voucher program won’t have any chance of getting through the Legislature.

“We are not going to regulate schools that parents choose and are working well,” Kavanagh said.


Hobbs vowed to bring accountability when she began her term a year ago as the first Democratic governor since 2009. Despite her criticism, the budget proposals negotiated by Hobbs last year didn’t include any caps on the expansion, leading Democratic lawmakers to express dissatisfaction with the lack of action.

She’s now proposing such changes as requiring private schools that receive voucher funding have minimum education requirements for teachers and that students attend public school for 100 days before becoming eligible for the vouchers. She reiterated a desire for accountability and transparency in the program.

Before the speech, Republican Sen. Jake Hoffman said Hobbs’ approach to vouchers would “destroy an empowering program that has helped hundreds of thousands of people, not just in their academic studies, but throughout their life.”

Hobbs also lambasted what she said has been Washington’s “ongoing failure to secure our southern border -– a failure decades in the making under both Democratic and Republican administrations.”

Among the “misguided efforts” by federal officials was the recent monthlong closure of the border crossing in Lukeville, Arizona, Hobbs said.

U.S. Customs and Border Protection called the move necessary to free up personnel to help Border Patrol agents apprehend and process hundreds of migrants entering the U.S. illegally. But the closure “did nothing to actually solve our immigration crisis but did hurt businesses and families,” Hobbs said.


She noted that she had sent National Guard troops to the border to help support overwhelmed Border Patrol agents with support duties and is now seeking funding for her Operation SECURE, an office inside the Arizona Department of Homeland Security that aims to better coordinate the state’s response to border issues.

In a video released after the governor’s speech, House Speaker Ben Toma criticized Hobbs’ approach to immigration, saying, “Her record is one of broken borders.”

The Legislature’s goal is to wrap up the legislative session within 100 days, but lawmakers typically go until May or June, especially when there are difficult problems to negotiate such as a budget shortfall.

The governor is scheduled to release her budget proposal later this week.