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Looking Ahead to this year's Elections
In the midterm elections, voters will cast their ballots for federal and state offices, including Congress, Arizona’s Governor, State Senators, and Representatives, Secretary of State, Mayors for Carefree and Cave Creek, and town council members for Carefree and Cave Creek. The Primary Election is currently scheduled for August 4, 2026, and the General Election is November 3, 2026. For upcoming election dates and deadlines, visit Calendar.Maricopa.Vote. And, it’s never too early to verify or update your voter registration status at BeBallotReady.Vote.
The 57th Legislature-Second Regular Session has Officially Begun
The Arizona Legislature has officially launched the 2026 session, kicking off with a surge of activity. Lawmakers have already introduced more than 1,300 bills—on pace to surpass recent records—with another 500–600 expected before final bill introduction deadlines.
This year’s proposals span critical statewide priorities, including water resources, housing, workforce development, education funding, and economic growth. Legislators will need to craft bipartisan solutions that Governor Hobbs can sign, while also navigating the state-level budget impacts of federal actions in H.R. 1. Key debates are expected around tax conformity and healthcare system changes. Additional issues likely to influence budget negotiations include border security, Prop 123, and essential water infrastructure funding
Arizona lawmakers propose limits on corporate home buying
- Arizona lawmakers propose restricting corporate home buying
- Corporate investors buy 1,000 homes yearly in Arizona
- Arizona developers’ home permits have declined by more then 80% since 2008
Arizona lawmakers are making a bipartisan push to restrict the ability of corporations and investors to buy up single-family homes in Arizona. The move comes as a bid by the Arizona Legislature to make housing more affordable across the state.
But the methods proposed by Nick Kupper, R-Surprise, and Oscar De Los Santos, D-Laveen, do differ.
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Arizona Inflation Update
Inflation in the Phoenix metro rose 2.2% year-over-year in December 2025, signaling a return to more typical price growth after months near historic lows. That’s still below the national rate of 2.7%, keeping Phoenix among the slower-inflating major metros.
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Phoenix’s Housing and Retail Consumer in Perspective
CSI’s recent report shows the Phoenix metro is now the 10th-largest retail market in the entire country, with nearly $164B in annual sales. That’s up from 34th place in 1970, a massive climb driven by strong population and economic growth.
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State Energy Competitiveness Index
Electricity in the modern age is a necessity. Without it, nearly all the life-sustaining features of our modern society would cease to operate. Electricity powers everything from the irrigation of the crops that make the food we eat to powering the air-conditioning that provides a respite from the Phoenix Historically, electricity in Arizona has come at an affordable price, which has added to the state’s attractiveness for both businesses and households alike. Cheap commercial and industrial power reduces the costs of production, supporting Arizona’s growing manufacturing sector, while affordable residential rates make Arizona attractive to new residents.
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The 2026 State of American Business Address
Discover what U.S. Chamber President and CEO Suzanne Clark and leading business leaders are saying about the state of the economy and the top issues shaping the domestic and global business landscape in 2026 and beyond. “Reaching and sustaining 3% growth is the fastest, surest way to raise living standards for Americans. And that is a goal we all share,” Clark said.
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Whistleblower alleges ADOT is intentionally targeting 3rd-party MVDs
Key Points:
- Arizona Department of Transportation accused of unfairly penalizing third-party contractors
- The contractors say the crackdown came after a harsh 2023 auditor general report
- A former ADOT employee alleges wrongful termination for pushing back against the crackdown
A now-terminated whistleblower in the Arizona Department of Transportation claims the department’s new audit and review procedure for third-party Motor Vehicle Department providers has prompted an unfair and aggressive crackdown against private contractors.
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What Makes a Good Election? Arizonans Agree on the Answer
Our latest statewide public opinion survey provides data-driven insights into what Arizonans want elections to deliver, regardless of party or outcome, as we head into the 2026 election and beyond. The findings show an overwhelming 97% of Arizonans say fair and secure elections are essential to a healthy democracy.
When asked what defines a good election, Arizonans agree on nine principles being important or essential, and across the political spectrum, they consistently put accuracy at the top. That’s just the start: more findings are in the full results.
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Coming to a County Near You: America250 Traveling Museum
Celebrate Arizona’s unique role in America’s 250-year story! Don’t miss your opportunity to see Arizona’s replica Liberty Bell travel to all 15 counties.
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How Permitting Reform Can Boost Local Economies
The U.S. Chamber is supporting several House bills aimed at modernizing permitting and regulatory processes.
Our take: “By modernizing permitting and clarifying regulatory requirements, Congress can unlock private investment, accelerate job creation, and enhance national security,” wrote Neil Bradley, U.S. Chamber Executive Vice President, in a letter to the House Energy and Commerce Committee.
- “These reforms will allow us to build the modern infrastructure needed to compete in the global race for innovation—supporting advancements in artificial intelligence, strengthening transportation networks, expanding affordable and reliable energy, and ensuring America remains a leader in technology and economic growth.”
Why it matters: A broken permitting system is the major roadblock to building the infrastructure of the future.
By the numbers: The average times it takes to secure a federal permit:
- 7.7 years for ports and waterway navigation projects
- 7.4 years for roads and bridges
- 4.3 years for electric transmission lines
Small business impacts: Delayed permits mean mounting losses for small businesses that hurt local economies.
- “The longer it takes for permits to happen, it holds up jobs,” said Brooks Kirchheimer, co-owner of Hill Top Hospitality in Salt Lake City. “A quicker process would allow businesses to be more successful.”
Big picture: Congress has made historic investments in resilient infrastructure, but permitting delays are slowing implementation.
Learn more: Permit America to Build
Arizona Democrats divided over plan to ban corporate and billionaire contributions
Key Points:
- Arizona Democrats propose “People’s Primary” to bar big money in primary elections
- The proposal would impose penalties on candidates who don’t reject outside spending
- Arizona Democrats would be the first party to enact such a policy nationwide
Arizona Democrats want to bar corporate and billionaire contributions in their primary elections, an appealing idea that has been bogged down in the details as the August primary looms.
The proposed “People’s Primary” could set a national precedent and may come up for a vote at the party’s general meeting on Jan. 24.
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Prop 123: The $300M Question Facing Arizona Lawmakers
For nearly a decade, Prop 123 provided about $300 million per year in stable K-12 funding through Arizona’s Land Trust. When the policy expired in July 2025, that responsibility shifted back to the General Fund, adding pressure at a time when state resources are already strained.
What Prop 123 did:
Approved by voters in 2016, Prop 123 increased annual distributions from Arizona’s Permanent Land Endowment Trust Fund to provide approximately $300 million per year in additional funding for K-12 schools. The funding came from a stable, voter-approved source, without any new taxes or General Fund spending.
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States move to curb AI-driven ‘surveillance pricing’
Key Points:
- State policymakers propose consumer protections for AI-powered personalized pricing
- Legislators in over a dozen states introduce bills to ban dynamic pricing
- Lawmakers are considering both bans and disclosure requirements for algorithmic pricing
State policymakers are scrambling to establish consumer protections as retailers increasingly use artificial intelligence-powered personalized pricing.
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America is falling behind. We need to compete on nuclear energy and artificial intelligence.
The race for global energy and AI dominance is real, and America is falling behind. While we tie ourselves in ideology and red tape, China is outbuilding and out-deploying the energy and computing capacity needed to overtake the United States. According to President Trump’s Artificial Intelligence Czar, David Sacks, “To remain the leading economic and military power, the United States must win the AI race.” Indeed, the White House has identified Chinese dominance in artificial intelligence as a critical national security threat. If we don’t act immediately, we will never catch up.
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What Small Businesses Need to Know About the Economy, Taxes, and AI in 2026
Neil Bradley, Executive Vice President at the U.S. Chamber, highlighted key trends shaping the year ahead during a Small Business Update with CO—, the U.S. Chamber’s digital platform for small business.
The U.S. economy grew just above 2% overall in 2025. While this is a good start, Bradley noted that at least 3% growth is needed to support higher wages and household incomes.
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Small Businesses Urge Senate Action on Credit Card Swipe Fees
On January 26, the Merchants Payments Coalition (MPC), joined by nearly 350 national, state, and local merchant trade associations, sent a letter urging the Committee to include the Credit Card Competition Act (CCCA) as an amendment to the crypto bill. The groups argue that swipe fee reform is urgently needed to protect Main Street merchants—particularly small retailers operating on thin margins—from escalating payment processing costs.
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Arizona law aims to make it illegal to reject cash for small purchases
Key Points:
- State lawmakers aim to make it illegal for retailers to refuse cash for purchases of $100 or less
- Legislation approved by House Commerce Committee would bar fee or penalty for using cash
- Business groups and associations strongly oppose the legislation, citing potential issues
They say that cash is king, and now state lawmakers are moving to ensure that merchants can’t turn it down.
Legislation approved by the House Commerce Committee on Jan. 28 on a 9-1 vote would make it illegal for retailers to refuse to accept cash for goods or services if the entire bill is $100 or less. HB2555 also would bar the imposition of any fee or penalty for using cash.
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Bill to expand market-based health coverage option for small businesses advances
Legislation aimed at expanding affordable health coverage options for Arizona’s small businesses is moving forward at the Capitol.
House Bill 2693, sponsored by Rep. David Livingston (R-Peoria), passed the House Commerce Committee on January 27 with support from the Arizona Chamber of Commerce & Industry and the Arizona Small Business Association.
HB 2693 expands access to Mutual Employer Welfare Arrangements (MEWAs), a long-standing, regulated option under Arizona law that allows employers to pool together to offer health benefits.
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Will Congress Deliver a Data Privacy Law in 2026?
Businesses need federal data privacy legislation to replace burdensome state-by-state regulations, writes Jordan Crenshaw, Senior Vice President of the U.S. Chamber Technology Engagement Center, in an article marking Data Privacy Week.
Why it matters: A federal privacy framework could reduce compliance costs, foster innovation, and provide clear protections for consumers, ensuring the U.S. remains competitive in the global digital economy.
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WM Phoenix Open Is a Hole-in-One for Arizona’s Economy
The WM Phoenix Open tees off this week, and there’s a reason they call it ‘The People’s Open’. According to CSI’s analysis of last year’s WM Open festivities, the tournament delivers a massive economic boost for Arizona each year, driven by out-of-state visitors, local spending, and statewide job support.
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Arizona seeks fair share of Colorado River water in negotiations with upper basin states
Key points:
- Arizona Governor Katie Hobbs in Washington to make case for Colorado River cuts
- Seven states missed November deadline for new agreement on river’s water allocation
- Arizona has conserved nearly 9 million acre-feet of water over 15 years
Gov. Katie Hobbs and the state’s chief water official head to Washington to make their case to a top official in the Trump administration and other governors that Arizona already has taken major cuts in its Colorado River supply even while Upper Basin states like Colorado have taken none.
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Competing measures on early voting could wind up on the November ballot
Key Points:
- A ballot proposal would confirm voting by mail in the state Constitution
- A GOP lawmaker wants control over early voting to remain within the Legislature
- Because of early voting rules, Arizona is among the last states to verify results
A new initiative seeks to ask Arizona voters whether they want to constitutionally preserve the right that nearly 90% of them use: to vote early and even drop off their ballots on Election Day.
A petition drive has been launched by a group calling itself Protect the Vote Arizona to add a provision to the Arizona Constitution recognizing a “fundamental right” to vote early and on Election Day. And that, according to Stacy Pearson, whose Lumen Strategies is managing the campaign, includes not just showing up in person to cast a ballot but also dropping off the ballots that were mailed to their homes.
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Bill to Shift Money to HURF Moves Forward
A bill that would shift electric vehicle charging revenues to infrastructure passed out of the House Transportation and Infrastructure Committee this week in a bipartisan vote. HB 2259 would capture the sales tax on electric vehicle charging and dedicate it to Arizona's road, streets, and highways.
Currently, gas-powered vehicles pay into the Highway User Revenue Fund (HURF) through gas taxes. Electric vehicles do not. This bill would begin to help electric vehicles pay for the roads on which they travel.
A fiscal note on the bill has been ordered but is not yet available. The fiscal note will give an estimate of how much money the bill may produce for the HURF.
A copy of the staff summary of the bill can be found here.
Governor Vetos Conformity
Governor Hobbs vetoed SB 1106, which included near full tax conformity with H.R. 1. In the Governor's veto letter, she calls on the Legislature to send her four provisions of the bill rather than a bill that includes a number of business tax deductions. Her letter calls for the following:
· Senior Deduction: Provides an additional $6,000 deduction for Arizonans age 65 and older.
· Tax-Free Tips: Allows workers to deduct tip income from their state taxes, up to federal limits.
· Tax-Free Overtime: Exempts eligible overtime pay from state taxes, up to federal limits.
· Car Loan Interest Deduction: Creates a new deduction for interest paid on car loans for new, American-made vehicles.
Each year the Arizona Legislature goes through a process of adopting changes to the federal tax code. Usually, the bill has a minimal fiscal impact but clearly communicates to business owners and residents that they do not need to keep two sets of books - one state and one federal.
This year due to H.R. 1 at the federal level, state conformity creates 13 notable tax breaks that have a combined fiscal impact of $440 million. A copy of the tax breaks and their state fiscal impacts can be found here.
The issue will likely become part of the larger FY 2027 budget discussion.
Governor Releases Executive Budget
Governor Katie Hobbs released her executive budget for Fiscal Year 2027 this afternoon. The Executive Budget provides more details about the priorities the Governor outlined in her State of the State address on Monday.
It is important to note with a split government -- Republican controlled State Legislature and Democratic Governor -- that the executive budget is simply an outline of the Governor’s priorities. It is the Arizona Legislature that appropriates funds each year through a group of budget bills. Once those bills are signed by the Governor, they become the adopted state budget.
Notable items in the proposed Executive Budget include:
Healthcare
- $4.3 million for Critical Access Hospitals, which serve as a lifeline in some of Arizona’s most underserved regions;
- $4 million toward the 988 crisis service hotline that assists Arizonans by connecting them to crisis behavioral health services;
- $3.2 million for resources to assist Arizonans in navigating the new Medicaid requirements or to transition to other health insurance or social service programs that mitigate disruptions of care caused by H.R. 1; and
- $500,000 for AZREACH service, which coordinates acute medical care transfers between hospitals, which is especially critical for rural Arizonans and the hospitals that serve them.
Conformity
The Executive Budget calls for partial conformity with H.R. 1 including the following provisions:
- Increased Standard Deduction: Raises the state standard deduction to match the new federal levels (increasing from $15,000 to $15,750 for single filers and from $30,000 to $31,500 for joint filers).
- Senior Deduction: Provides an additional $6,000 deduction for Arizonans age 65 and older.
- Tax-Free Tips: Allows workers to deduct tip income from their state taxes, up to federal limits.
- Tax-Free Overtime: Exempts eligible overtime pay from state taxes, up to federal limits.
- Car Loan Interest Deduction: Creates a new deduction for interest paid on car loans for new, American-made vehicles.
Data Center Tax
- To mitigate further revenue loss, the Executive proposes eliminating the Computer Data Center Program beginning in FY 2027. This policy change will result in restored General Fund revenues of $38 million each year.
K-12 Education
The baseline 2.5% distribution amounts to $189.8 million, the first $72.3 million of which is allocated to Basic State Aid and the remainder to the Classroom Site Fund. The Executive Budget allocates the remaining 4.4% distribution accordingly:
- $271.3million to enhance public education funding with a base level increase;
- $36.8 million to pay the debt obligation on a Building Renewal bond issuance, which will address historically underfunded school facility needs;
- $3 million to fund additional administrative capacities at the School Facilities Division (SFD) related to the bonding authority; and
- $6 million to fund the operations of the State Land Department and create additional General Fund savings.
Empowerment Scholarship Account Reform
The Executive Budget implements an income cap that repeals prior- and future-year eligibility for universalESA recipients whose household income is equal to or greater than $250,000.
This reform is anticipated to impact approximately 11,656 students in FY 2027, all of whom come from households with incomes of $250,000 or greater. This will eliminate those students’ awards and reduce program costs by $89.3 million.
Additionally, the Executive proposes elimination of language allowing universalESA voucher holders to carry forward unexpended ESA balances from one academic year into the next. Quarterly ESA reporting from ADE shows that, although FY 2025 ESA awards totaled $881.7 million, actual ESA spending was only $723.6 million; therefore, the FY 2025 carryforward balance amount across all ESA recipients was approximately $158.1 million.
By reverting universal ESA award recipients’ unencumbered account balances at the end of the fiscal year, this proposal frees up unused State funds to be allocated toward other needs.
The Executive Budget fully protects the pre-universalESA program and provides that families will continue to have access if their child:
- Has special needs;
- Attended a school or school district that was assigned a letter grade of D or F;
- Resides on a Native American reservation;
- Is a ward of the juvenile court and has been placed, or has a pending placement, in permanent adoption or guardianship;
- Has parents who are legally blind or deaf; or
- Has parents who are in active service of the U.S. armed forces.
Arizona Commerce Authority
The Executive Budget funds the Arizona Commerce Authority at current levels with the removal of the following FY 2026 items.
- State Rural Development Council: $1,200,000
- Applied Research Centers: $500,000
- Office of Defense Innovation: $300,000
- Romania Trade Office: $125,000
Gaming
The FY 2027 Executive Budget proposes amending statute to allow the Director to create a tiered fee structure that would more effectively regulate the difference between large and small operators and improve competition. It would also more closely align the State’s top fee with what large operators are seeing in other states, creating greater national consistency.
The proposed tiered fee structure would have two fees, depending on an operator’s average monthly revenues. For operators with less than $75 million in average monthly revenue, the current fee of 10% (8% for retail) would still apply. For operators with more than $75 million in average monthly revenue, the fee would increase to 45%. The increased fee would have no impact on Tribal operators.
Center for the Future of Arizona: Launches the Arizona Media Institute
New Initiative Supports Arizona’s Media in Building Trust, Enhancing Public Understanding, and Driving Engagement
Center for the Future of Arizona (CFA) today announced the Arizona Media Institute, a first-of-its-kind statewide resource created to support journalism in Arizona and ensure that media have useful data and tools needed to support fact-based journalism on issues that matter most to Arizonans.
ARIZONA MEDIA INSTITUTE
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