Think tank calls on Arizona government to watch spending

Audio By Carbonatix

(The Center Square) - A think tank predicts a busy year for Arizona’s legislative session in 2026.

Katie Ratlief, executive director of Common Sense Institute Arizona, said there are many issues that will require urgency on the part of the Legislature and Gov. Katie Hobbs.

The first big issue that CSI Arizona is watching has to do with the state budget.

“There’s been a lot of talk about how much money there may or may not be for legislators and the governor to spend on new projects, but something we’ve been really focused on over the last couple of years is just how much the state budget has grown,” Ratlief told The Center Square.

Ten years ago, Arizona’s budget was $10 billion.

Today, it is nearly $18 billion.

Of the increase, $6 billion came just in the last five years.

“So the fact that there isn’t a lot of money to spend isn’t because revenues have not grown. They’ve grown rapidly, and they have stayed at a very high level. It’s because spending has started to outpace that growth,” said Ratlief. “So that is something that we’ll be keeping an eye on, whether or not legislators can 1) start to rein in these spending increases and 2) whether or not they’re interested in going back and looking at, the governor too, some of the spending that has sort of just added up over the last few years, and if there is willingness to revisit that and see if it’s still necessary.”

Housing is another issue that CSI Arizona is watching.

While Ratlief said there is a lot the state can do, she thinks “a lot of the holdup is on the cities’ side.”

For example, Ratlief said cities are not issuing permits fast enough.

“We track this data by county, and we have more than one county in Arizona who is not approving enough new housing permits to ever close their housing shortage,” said Ratlief.

Meanwhile, CSI Arizona has recommended state and local leaders consider making state lands within 10 miles of various cities available for use.

“It may not take any legislation to do it,” said Ratlief. “It could just be the state land department deciding to move land more quickly, but it could be a combination of legislation, you know, ballot initiative, and the state land department’s cooperation.”

Ratlief estimated this could make land available for “a couple hundred thousand new housing units,” something she said would go a long way in helping Arizona’s housing shortage and helping bring down the cost of housing.

Ratlief added that water will remain an issue in Arizona in 2026.

Colorado River negotiations are ongoing, and Arizona is unique in that the Legislature will have to give the Department of Water Resources the authority to sign onto any Colorado River agreement.

“So expect that issue of the Colorado River - if the states can come to agreement - to come to the Legislature and to be debated through the legislative process as well,” said Ratlief.