Arizona Senate Approves Budget Delivering $1.4 Billion in Tax Relief, Becomes Only State Fully Adopting Trump's Tax Package Prioritizing Families, Public Safety, Taxpayers

ARIZONA, June 12 - FOR IMMEDIATE RELEASE
Thursday, June 11, 2026

PHOENIX, ARIZONA—Arizona workers, families, seniors, veterans, and taxpayers are poised to keep more of their hard-earned money under the FY 2027 state budget approved by the Arizona Senate today. The $18.29 billion budget delivers more than $1.4 billion in tax relief over four years, eliminates state income taxes on tips and overtime pay, creates new tax relief for families facing rising childcare costs, and makes Arizona the only state in the nation to fully adopt President Trump's federal tax package at the state level. The plan also strengthens public safety, supports child protection services, combats waste in government programs, and maintains a responsible spending framework.

Arizonans will see direct benefits from the budget, including:

• No state income tax on tips.

• No state income tax on overtime pay.

• A larger standard deduction for taxpayers.

• A new childcare expense deduction for working families.

• An increased child tax credit.

• An additional $6,000 deduction for seniors.

• Expanded charitable deductions.

• Property tax relief for disabled veterans.

• Continued educational choice through Empowerment Scholarship Accounts.

• Additional support for child safety services and foster care programs, including $58 million in targeted funding.

• Increased funding for correctional officers, including a 4 percent stipend, and additional support for crime victim assistance.

• New investments in wildfire suppression and emergency response.

• Support for rural hospitals and critical access healthcare providers.

• Stronger eligibility verification for Medicaid and SNAP to reduce waste and protect taxpayer dollars.

"Arizona is now the only state in the nation fully adopting President Trump's tax package, and that means workers, families, seniors, and veterans get to keep more of their hard-earned money," said Senate President Warren Petersen. "This budget delivers meaningful tax relief while maintaining the services Arizonans rely on and preserving Arizona's reputation as the best place in America to live, work, and raise a family."

"We approached this budget the same way Arizona families manage their own finances, with discipline and priorities," said Senate Appropriations Chairman David Farnsworth. "We reduced ongoing spending, identified efficiencies across government, and kept spending growth below the combined rate of population and economic growth while maintaining our core responsibilities."

"Arizonans expect leaders to solve problems, not score political points," said Senate President Pro Tempore T.J. Shope. "This agreement reflects months of work to find common ground, protect key priorities, and deliver a budget that serves communities across our state."

"By adding stronger eligibility checks to Medicaid and SNAP, we're making sure these programs work as intended and that every taxpayer dollar is spent with integrity," said Senate Majority Leader John Kavanagh.

"Public safety isn't optional," said Senate Majority Whip Frank Carroll. "This budget stands behind correctional officers, supports victims of crime, invests in child protection, and strengthens wildfire and emergency response efforts across Arizona."

The budget also incorporates stronger verification standards for public assistance programs, reduces ongoing spending, and preserves Arizona's strong fiscal position while funding critical public safety, healthcare, and child welfare priorities. Actual revenues outperformed projections by approximately $900 million over three years, helping make this tax relief possible without raising taxes or reducing core services.

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For more information, contact:

Kim Quintero

Director of Communications | Arizona State Senate Republican Caucus

kquintero@azleg.gov

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