Arizona Democrats Plan Land Trust Renewal and Voucher Review

Arizona Democrats will seek to redirect public school funding to the state land trust and review corporate tax breaks as they take control of the state legislature in January. The party is preparing to implement these financial shifts while managing a budget constrained by a flat income tax.

Rep. Kevin Volk, D-Tucson, said his priority is renewing higher distributions from the state land trust to support schools without raising taxes. He described the move as a way to secure necessary revenue for education. "It doesn't touch taxes, and it gets much needed revenue for schools," Volk said.

Gov. Katie Hobbs has called for placing a renewal of Proposition 123 before voters. That measure previously increased land trust payouts to public schools. When those payouts expired, the state general fund assumed the cost of roughly $300 million annually to maintain required funding levels.

The caucus is also weighing changes to the Empowerment Scholarship Account voucher program. Volk cited concerns regarding spending oversight and child safety but did not specify whether Democrats would repeal universal eligibility. In an interview with Arizona's Family, Hobbs said she expected momentum for voucher changes and wanted to preserve the program's original purpose for children with disabilities and students in struggling schools.

Sen. Analise Ortiz, D-Phoenix, said the state's flat income tax has reduced available funds for housing, healthcare, and education. She noted that reversing the flat tax would be difficult without a supermajority. Democrats plan to examine corporate tax incentives, including those for data centers, to identify new revenue sources. The current budget already includes a three-year moratorium on incentives for new data center projects.

Democratic leaders face a constitutional hurdle for many revenue measures. The state constitution requires two-thirds approval in each chamber for tax increases or reductions in exemptions. Their expected House majority falls short of that threshold. House Speaker-elect Oscar De Los Santos said the party would prioritize affordable housing. "We have to build an Arizona we can afford, an economy where working families have a fair shot," De Los Santos said.

Senate Republicans elected Sen. Jon Kavanagh, R-Fountain Hills, as their minority leader. In a press release, the caucus said it would oppose tax increases and unnecessary regulations while working with Democrats where possible. Kavanagh said, "We’ll work with Democrats where we agree, and when we disagree, we’ll explain why and put our own on the table."