Governor Hobbs released her proposed budget this week laying out her priorities around public health, health care access, food insecurity, and some broader social determinants that shape health outcomes in Arizona.

As is always the case, her budget proposal is a wish list rather than a final product. What ultimately emerges from the legislative process will depend less on the strength of the ideas than on the effectiveness of the governor’s team in negotiating with lawmakers.

Healthcare & Public Health (‘one-time’ General Fund)

  • *AHCCCS – $14.4 M ($4M Technology and $10.4 M to add 150 FTE)
  • *Medicaid Enterprise System (handles AHCCCS’ critical functions, including case management, billing, reconciliation, and provider payments) – $15.2 M Ongoing General Fund*
  • Critical Access Hospitals – $4.3 M*
  • Crisis Service Line – $4.0 M
  • Navigation Assistance for New Medicaid Requirements – $3.2 M
  • Medical Care Transfers (Rural Hospitals) – $500,000
  • AHCCCS Caseload and Capitation Rate Supplemental Funding for FY 2026 ($121.7 M) and FY 2027 (Estimated to cost $331.1 M)
  • AHCCCS Tobacco Tax Revenue Shortfall Resolution (Projected Shortfall is $ 42.7 M in FY2027)
  • Arizona State Hospital – $3.3 M
  • Arizona Psychiatric Access Line – $1.2 M

*These appropriations are critical for AHCCCS to be able to effectively implement the work requirements posed by HR1 while avoiding unfair disenrollment due to a bad computer system

Food Assistance

  • SNAP New Requirements $48.4 M (Work Requirements, Admin Costs, Error Rate Penalties) and add 146 FTE
  • School Meals Program – $3.8 M
  • Free and Reduced Lunch – $37 M
  • A to Z Portal – $2.2 M GF ongoing and $215,400 ongoing from the Temporary Assistance for Needy Families (TANF) Fund

Housing

  • Housing Acceleration Fund – $2.5 M GF One-Time and $2.5 M ARPA Arizona Affordability Fund
  • Utility Assistance – $15 M ARPA One-Time
  • Weatherization and Home Repair – $5.0 M ARPA One-Time
  • Geothermal Energy – $1.5 M from Air Quality Fee Fund and $1 M federal funds
  • Continued Funding for the Health and Housing Opportunities (H2O) Waiver Program

Early Childhood

  • DES Child Care Assistance – $44.8 M Ongoing GF
  • $128.1 M GF and $271.9 million Department Long Term Care System Fund expenditure authority in supplemental funding for FY2026
  • 298.8 M increase and $673 M in Department Long Term Care System Fund expenditure authority in FY 2027 for caseload adjustments
  • Of the GF expenditure authority part, $5.5 M and $15.2 M, one-time, respectively, are related to an expected increase in appeals.

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Legislative Update

Our Public Health Policy Committee continues to meet each Friday at 2pm to discuss our positions on bills and to strategize about how to weigh in on bills that are coming up in committee in the coming week. You can view the positions we’ve taken on various bills in our google tracker sheet which is located here: AZPHA Bill Tracking Spreadsheet 2026 – Google Sheets

I’ll cover the nuts-and-bolts next week. In the mean-time you can view this discussion which was posted last week: Legislative Session Begins: Our Positions So Far – AZ Public Health Association

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