Governor Hobbs seeks $30M Colorado River fund, housing and affordability fees and to end data‑center tax break

Governor Katie Hobbs used the joint opening of the 50th Arizona Legislature to outline a package of water, housing and affordability measures she will seek in her executive budget and through the session.

Hobbs said her executive budget will include $30,000,000 for a Colorado River Protection Fund intended to “supercharge our conservation efforts” and support ongoing negotiations over the river. She also proposed eliminating the decade‑old tax exemption for data centers and said the exemption amounts to “a $38,000,000 corporate handout.” “Make data centers pay their fair share for the water they use,” Hobbs said.

On housing, Hobbs announced a new housing acceleration fund designed to leverage public and private dollars to lower financing costs and spur construction. She said she will kick‑start the initiative with a $2,500,000 investment and asked the Legislature to continue annual funding. To address broader affordability, she proposed an Arizona Affordability Fund, starting with $20,000,000 from the executive budget and a dedicated revenue source: a $3.50 nightly fee on short‑term rental stays to support utility assistance, weatherization and housing projects.

Hobbs framed the measures as part of an “Arizona Promise” to protect water and make housing and utilities more affordable for working families. She tied the proposals to broader budget and regulatory priorities, saying the state must balance economic growth and resource protection.

The governor also urged tighter oversight of the Education Savings Account (ESA) program, asserting the need to curb waste, fraud and abuse while preserving ESA support for students with disabilities and military families.

Next steps: Hobbs’ proposals will be included in her executive budget and presented to the Legislature for consideration; the speech did not include any enacted bills or formal votes during the joint session.