THE ARIZONA STATE LEGISLATURE

The Arizona State Legislature is a bicameral body with 30 members in the Senate and 60 members in the House of Representatives. Each district is served by one Senator and two House members. In 2025, Republicans held a 17–13 majority in the Senate and a 33–27 majority in the House, while Democratic Governor Katie Hobbs controlled the executive branch, creating a divided state government. This partisan split, a Republican-controlled legislature and a Democratic governor, defined much of the 2025 session's dynamics, with frequent standoffs, a heavy veto record, and ultimately a last-minute bipartisan budget agreement.

2025 SESSION OVERVIEW (57th Legislature, 1st Regular Session)

The first regular session of the 57th Arizona State Legislature ran from January 13 to June 27, 2025, lasting a total of 166 days. Of the 1,679 bills introduced, the Legislature passed 144 bills, with Governor Hobbs signing 54 and vetoing 19 as of mid-April, before a bill moratorium was issued pending a budget deal.

The Budget Battle

The session's defining drama was the FY 2026 budget. The $17.6 billion budget that originated in the Senate passed the House on June 26 and was signed by Governor Hobbs on June 27, avoiding a government shutdown with three days to spare after weeks of back-and-forths between the two chambers and the governor. The House GOP passed its own $17.3 billion budget with no bipartisan debate, which Hobbs declared "dead on arrival."

EDUCATION HIGHLIGHTS

Proposition 123 — The Biggest Education Story

The most consequential education issue of the 2025 session was the expiration of Proposition 123, which since 2016 had provided roughly $300–350 million annually to K–12 schools by drawing increased distributions from the State Land Trust. Proposition 123 was scheduled to expire on June 30, 2025. Without renewal, the distribution from the State Land Trust Permanent Fund was set to revert to 2.5%, significantly reducing the annual funding available for K–12 education by about $300 million per year.

Negotiations over renewal broke down amid a dispute over how the money should be spent and whether ESA (school voucher) constitutional protections should be attached to any renewal ballot measure. The Republican-controlled House Appropriations Committee advanced HCR 2031, which would let voters decide in November 2026 whether to extend Prop 123 with raises for teachers only, along with a second ballot referral, HCR 2038, that would create a fund for teacher raises administered by ADE. No renewal ultimately made it to the ballot for 2025.

Instead, the passed budget backfills $380 million in Prop 123 money to compensate for lawmakers' failure to negotiate its renewal — meaning the dollars shifted to the General Fund for FY 2026. The Prop 123 renewal question is now expected to go before voters in November 2026.

Literacy & Dyslexia

Governor Hobbs signed two early literacy bills into law: HB 2170, which requires Individualized Education Plans to identify and provide support for students diagnosed with dyslexia, and SB 1502, which requires teachers to complete specific training in the science of reading and dyslexia instruction and, for those teaching reading in grades K–5, obtain a literacy endorsement by 2028.

Phone-Free Schools

Governor Hobbs signed HB 2484, which creates phone-free schools with exceptions for educational purposes or emergencies.

Higher Education & Community Colleges

The budget created Arizona's first ever Community College Promise Program, a scholarship program for community college students. The Arizona Teacher's Academy, which supports college students on the path to becoming teachers, received $9 million in new investment. The Arizona Promise Program, a guaranteed scholarship for eligible Arizona residents, received $16.3 million.

Childcare

The session delivered $49.9 million in state funds and $81 million in federal funding to expand access to childcare, cutting the waitlist by 50%.

ESA / School Vouchers

The ESA (Empowerment Scholarship Account) program, Arizona's universal school voucher program, remained a flashpoint throughout the session. With enrollment now exceeding 100,000 students and annual costs approaching $1 billion, Governor Hobbs called for accountability reforms while Republicans sought to constitutionally protect the program. No major structural changes to ESA eligibility passed, though the budget included modifications to auditing procedures and allowable expenses. Republicans sought to tie Prop 123's renewal to constitutional protections for ESAs, which Democrats and education advocates characterized as using popular school funding as leverage for an unpopular policy.

Assessment-Specific Legislation

SB 1028, which would have required students to pass a statewide assessment prior to graduation, was introduced and tracked closely. Opponents noted that such a requirement was removed in 2015 as ineffective and that the bill exempted CTED students and those with IEPs. The bill did not advance into law.

KEY ONGOING TENSIONS HEADING INTO 2026

The 57th Legislature's 2nd Regular Session (2026) opened in January 2026. The Prop 123 renewal ballot question, ESA accountability reforms, the teacher shortage, flat assessment proficiency scores, and the ongoing debate over public school funding adequacy are all expected to dominate the agenda. Proposals on immigration and housing are also likely to resurface, and a revival of the Starter Homes Act, aimed at expanding affordable housing, may return pending broader stakeholder agreement.