Speaker Montenegro, President Petersen, Leaders De Los Santos and Sundareshan, members of the House and Senate, Secretary Fontes, Attorney General Mayes, Treasurer Yee, Superintendent Horne, Mine Inspector Presmyk, Corporation Commissioners, Chief Justice Timmer and members of the judiciary, Tribal leaders, honored guests, and my fellow Arizonans:

Today we mark the opening of the Second Regular Session of Arizona's 57th Legislature.

I want to begin by recognizing State Senator Lela Alston, who has informed us she will be retiring after this session. Lela has dedicated decades of her life to building a better state through investing in public education, protecting individual rights and freedoms, and creating a brighter future for every Arizonan.

And let us all come together in denouncing the horrific violence that is poisoning our politics. From the assassinations of Minnesota House Speaker Melissa Hortman and Arizona's own Charlie Kirk, to the explosive materials found in the Arizona Supreme Court just last week, the rising tide of political violence must come to an end. As elected leaders, it is our responsibility to turn down the temperature and denounce violence in all forms.

Fellow Arizonans, the late Senator Barry Goldwater once imagined what our state would be one hundred years after its creation. He said, "Arizona will continue to be the haven for people who seek an outlet for initiative and a reward for work."

Senator Goldwater's words were true in 1962, and they are still true today, nearly a decade and a half into Arizona's second century.

Through determination, collaboration, and a few arguments along the way, our progress has carried on.

Last year at this podium, I made a promise to Arizonans … the Arizona Promise. It represented the compact our state has always made to its citizens - that we would be a bastion of security, opportunity, and freedom for whoever is willing to come here, work hard, and make a good life for themselves and their families.

Since I have had the honor of serving as governor, we have made great strides to restore this promise, and we have put the rights, liberties, and freedoms of the people of Arizona first.

In the last year, we created tens of thousands of jobs and increased take home pay …

Erased hundreds of millions of dollars in medical debt for nearly half a million Arizonans …

Lowered the cost of child care, prescription drugs, and housing to support working families and businesses …

Took action to reduce veteran homelessness and suicides …

Built more homes and grew our economy, all while protecting our water …

Delivered a well-earned raise for our courageous and dedicated police, dispatchers, and firefighters …

Empowered men and women in uniform to seize drugs, weapons, and criminals off the streets and out of our communities …

And we secured historic investments to grow our state's economy. From Cognite, the first AI company to be headquartered in Arizona, to Dutch Bros, which relocated its headquarters from Oregon, Arizona has shown the world that we are the best place to start and grow a business.

We also can't discuss the economic success of the last year without mentioning the largest foreign direct investment in our country's history. Arizona is proud to have TSMC located right here in Phoenix, and we are thrilled to be partners in your success.

Last year, I traveled to Taiwan for a diplomatic and trade mission. I was honored to meet with President Lai and business and government officials to reaffirm how much the people of Arizona value our friendship and partnership. I am happy that TSMC Arizona President Rose Castanares joins us here today, and look forward to our state and TSMC working together in the years ahead.

Our progress is undeniable. Still, far too many Arizonans are struggling to keep up with the cost of housing, food, health care, and utilities.

As our state continues to build a strong economic future, I will never forget about my fellow Arizonans who are fighting every day to build a better life for themselves and for their families.

I will never forget them because their experience is my experience.

I scraped together scholarships and worked at Pizza Hut to put myself through college…

I helped domestic violence survivors as a social worker …

I worked multiple jobs to make sure my kids could eat and have a roof over their heads…

I understand how it feels to work hard every day only to come up short on the bills at the end of the month - because I lived it.

That's why the Arizona Promise is personal to me. And this is why I am committed to working together on real solutions for Arizonans.

Like so many Arizona families are doing right now, I know how to stretch a dollar. I saw my parents do it. I did it myself to help my family get by and support my kids.

Affordability isn't a joke or some hoax. It's a real and consequential challenge that families across Arizona must grapple with every day. Pocketbooks are strained, and Arizonans need their elected officials to take action.

Affordability is my top priority. I'm encouraged it's yours as well.

And now is the time to back up that talk.

Put the Middle Class Tax Cuts Package on my desk immediately. I'll sign it.

Let's deliver an over two hundred million dollar tax cut for hard-working Arizona families.

Together, we can immediately increase the standard deduction that eighty-eight percent of Arizona tax filers use…

We can cut taxes on overtime pay and tips…

We can give our seniors a break…

We can put more money in the pockets of Arizona families - money that will help them put food on the table, care for their children, and pay their utility bills.

I recognize that you're not going to agree with everything I say or propose here today, and that's fine.

However, we should all agree that middle-class families deserve a tax cut now, so Arizonans can get that relief when they file their taxes this spring.

Let me also say: If you think billionaires and big corporations should get a tax break before hardworking families - then you need to spend more time with real Arizonans who are struggling to get by.

The same old partisan attitudes will get us nowhere this year. Our constituents don't care about the political games they play in our nation's capitol, and they don't care if good ideas come from Democrats or Republicans - they care that the people they elect get things done to make their lives better regardless of party affiliation and ideology. When we put Arizona first, we show the political class in Washington, D.C. how to get things done.

There's no better example of how we deliver for our people - and how Washington fails - than the tale of two budgets: the partisan Washington budget, known as H.R. 1, compared to the Arizona Promise budget we passed last year.

Last session, we worked together to protect Medicaid while the partisan politicians in Washington slashed it, endangering the future of Arizona's rural hospitals in order to pay for tax breaks for billionaires…

We delivered ten million school meals to children who needed them while Washington cut food assistance and then held it hostage during the federal government shutdown…

And the budget we passed was bipartisan and balanced, while the Washington budget was partisan and skyrocketed the national debt by trillions of dollars - leaving our children and grandchildren to pick up the tab for our federal government's reckless and irresponsible spending.

While Washington's budget continues to be full of bloat and waste, I'm proud that here in Arizona we keep a close eye on the size of our government. But we must do more.

Families in our state are stretching every dollar. And we must do the same. In the past year, I'm proud to say we've found solutions to make Arizona's government more efficient and more effective.

My Executive Budget will include a new Arizona Capacity and Efficiency Initiative: a series of cost savings measures that can save Arizona up to one hundred million dollars over the next three years.

We will not slash and burn with stunts that do more harm than good. We will not decimate important services that families and businesses rely on. We will streamline, consolidate, and cut costs to make government work for our people.

Here in Arizona, we're going to do things our way, and we're going to do them better, because Washington has failed us. But we will. not. fail. our fellow Arizonans.

Look at what we accomplished in the Town of Superior, where there's a rocky wash not far from Route 60. Some days it's bone-dry and other days it's a vigorous torrent. Superior Mayor Mila Besich, who's here with us today, knows it well. As someone who grew up in the town, she's dealt with the wash's unpredictability her entire life.

North of the creek are Main Street businesses. South of the creek: schools, a community pool, and the fire department.

For years, the Town of Superior could not safely cross the creek. But when I reactivated the Greater Arizona Development Authority, we unlocked the opportunity for places like Superior to build infrastructure that rural communities need.

Today, the Panther Drive Bridge across that wash has brought peace of mind to the area's residents … to the parents who know their children can get to school safely, to the small business owners who want a reliable commute home from work, to the firefighters, paramedics, and EMTs who can respond to emergencies more quickly.

The Panther Drive Bridge is a powerful example of how investing in rural infrastructure saves lives. It is a bridge to the Arizona Promise … connecting Arizonans to security, opportunity, and freedom.

This past year, we also saw the spirit of the Arizona Promise exemplified in the heroism that brought light amid darkness.

Last summer, a vicious fire - one of the largest in our state's history - broke out along the North Rim of the Grand Canyon. The Dragon Bravo Fire scorched more than 145,000 acres, destroying our beloved Grand Canyon Lodge.

Thousands of firefighters - all of them heroes - battled the flames. State firefighters like Captain Christopher Rubio and his crew worked alongside the North Rim to stop the fire from spreading into employee housing and campgrounds … Captain Garrett Thomas and his crew protected homes and historical sites, and prevented the fire from moving from the timber down into the grass … and Captain Gerardo Diaz and his crew worked for days to prepare a road that would become critical to slowing the fire's movement. Thanks to their actions and the tireless efforts of so many others, the Dragon Bravo Fire was fully contained.

Captains Thomas and Diaz are with us in attendance today. Please stand and, everyone, join me in applauding them for their bravery.

These moments remind us just how fragile life can be… but also how resilient we are as Arizonans.

We certainly need that resilience today - especially in the wake of the federal government's incomprehensible decision to deny Arizona's emergency funding request to help the Globe and Miami communities that suffered devastating floods. Families have had their lives shaken and livelihoods destroyed. These are our fellow Arizonans. They are our fellow Americans. And they need our support now more than ever.

In the aftermath of the floods, I visited small businesses and their owners. An antique store, where mud had reached waist level, wreaking destruction. A family-owned dance studio where beautiful costumes and expensive equipment were lost forever. Neighbors showed up with shovels to clear mud and debris and salvage anything they could.

Blood, sweat, and tears went into building these livelihoods. How can our federal government turn its back on Arizonans who are simply trying to get back on their feet?

No matter who you voted for, we are Arizonans, and Americans, who deserve help when disaster strikes. I hope elected officials on both sides of this chamber, and in Congress, join me in calling on FEMA to right this wrong and reverse their callous decision to deny our communities emergency assistance.

To the people of Globe and Miami - you deserve better than this. We will continue to fight for you and all Arizonans - especially when Washington, D.C. won't.

As elected officials, we have a responsibility to deliver what matters most to Arizona families: security - security that protects our communities, our pocketbooks, and our dreams for the future.

At the core of the Arizona Promise is safety for all. That means stopping dangerous drugs from invading our state and getting criminals, who are harming our families and neighbors, off. our. streets.

When Washington politicians failed us, I proudly deployed members of the Arizona National Guard to our southern border. The efforts of these brave men and women have stopped millions of fentanyl pills, thousands of pounds of other illicit substances, and hundreds of illegal weapons from entering our state.

But transnational crime doesn't stop at our border.

That's why last year, I launched Operation Desert Guardian. We brought together local police departments, county sheriffs, state troopers, Tribal, and federal law enforcement officers to disrupt and dismantle transnational criminal organizations in Arizona - and they have made an impact statewide.

Last month, state troopers and law enforcement partners in Northern Arizona, including the Yavapai and Coconino County Sheriff's Offices, conducted a coordinated effort along the region's major transportation corridors. The outcome: the seizure of over three hundred pounds of drugs, as well as the arrest of a felon with an outstanding one million dollar warrant for crimes against children.

And that's just one example of real world impact from Operation Desert Guardian. Since its inception, our combined counterdrug operations have seized…
More than one hundred and five million dollars worth of drugs
More than sixteen thousand pounds of fentanyl
More than twelve hundred illegal firearms
And resulted in more than fourteen hundred arrests.

I'm proud to say that Arizona Sheriff's Association President David Clouse and the Arizona Association of Chiefs of Police President Kara Riley join us today to celebrate our partnership. Thank you both. Thank you to all law enforcement who are working with Operation Desert Guardian and to the hundreds of men and women in uniform who contribute their expertise, skills, and bravery to this important mission.

Here in Arizona, we're getting real results.

While the federal government neglects drug smuggling and human trafficking cases to chase deportation quotas, Arizona is taking on the cartels. While the federal government uses law enforcement resources to score political points in cities thousands of miles from the southern border, Arizona is laser-focused on securing the border, getting drugs off the streets, and cracking down on criminals poisoning our neighborhoods and our children.

We've consistently picked up the slack for the federal government - racking up a tab of over seven hundred million dollars in border security expenses over the last five years. I made it clear to both the Biden and Trump Administrations that we expect to be paid back. Today, I'll say it again: Arizona is tired of footing the bill for the federal government's inaction. The federal government must repay us for the over seven hundred million dollars we have spent on border security since 2021.

I want to specifically thank the legislative leaders from both parties for joining me in holding the federal government accountable for the debt they owe to Arizona taxpayers - and I look forward to continuing that partnership in the year ahead.

When it comes to the Arizona Promise, security also means economic stability. It's about being able to afford basic necessities and about living without the fear of one unexpected event devastating your finances.

Just look at the toll that medical debt has taken on too many Arizonans. Facing treatment for life-threatening medical conditions, many have had to make impossible choices: pay off debt, or put food on the table, or pay the utility bill.

To return security to their lives, I launched a historic initiative to cancel medical debt and deliver meaningful relief for working-class Arizonans.

Before we took action, Arizonans owed 2.4 billion dollars worth of medical debt. Today, we've erased 642 million dollars in medical debt for nearly half a million people - without costing the state government a dime.

Our constituents deserve safe communities. They deserve economic security. They deserve a hopeful future.

Unlike politicians of the past, I refuse to bury my head in the sand. I refuse to ignore the problems we face. I will tackle them head on to deliver for our state.

I did just that when my administration established the Willcox Active Management Area to protect the region's groundwater…

And when I ended state land leases for Fondomonte, who was recklessly pumping our groundwater to boost their corporate profits.

I will continue to stand up for communities across our state to ensure they are protected from corporations who care only about today's profits, not Arizona's future.

That's why today I am announcing a new Active Management Area for La Paz County, to crack down on the out-of-state special interests that are pumping our state dry while Arizona families and farmers suffer.

Why do we need another AMA? Because in the Ranegras Plain Groundwater Basin, the land is sinking and legislators are shirking their responsibility.

La Paz County Supervisor Holly Irwin is here today - she showed me wells that have gone dry and homes that are sinking in her community. Together, we spoke to Arizona business owners and farmers worried about their future. She and so many of her neighbors see how AMAs have helped families and businesses in other parts of the state. They want the same for La Paz, and this new AMA will help protect local water supplies while giving residents living in the basin a say over their water future.

We can no longer sit idly by while our rural communities go without help. They deserve solutions and security, not another decade of inaction and uncertainty.

And while we secure our water and stand up for our communities, we can grow our economy, build homes, and create the future that Arizona families deserve.

We did just that last year, with the creation of innovative groundwater programs. I'm proud to announce that, under our new Ag-to-Urban and Alternative Designation of Assured Water Supply programs, we have already designated water supplies for over sixty thousand new homes in Arizona. Homes where Arizona families can grow, build a life together, and rest easy at night knowing they will have the water they need now and into the future.

This type of smart growth is our future. We can protect our groundwater supplies. We can build more housing and lower costs. We can continue to be the model for the nation when it comes to water conservation and economic development.

I reject the naysayers on both sides who pit economic growth against a sustainable water future. Those who say we must gut water protections to grow our economy, or who say we must sacrifice our farms, jobs, and businesses to protect our natural resources. Arizona is better than that. We have always risen to the moment to defend our security, opportunity, and freedom while protecting our water for our families.

As we look to the ongoing Colorado River negotiations, these core Arizona principles guide us.

For years, Arizona and our fellow lower basin states, California and Nevada, have regularly brought proposals, offers of collaboration, and a commitment to the long-term health of a river that sustains nearly forty million people.

Those efforts have been consistently ignored by politicians in Washington, D.C. and by the upper basin states. The federal government can no longer watch these negotiations from the sidelines. They must ensure the upper basin is stepping up and conserving water like Arizona does, and get a deal done.

The upper basin states, led by Colorado, have chosen to dig in their heels instead of acknowledging reality. As negotiations continue, I refuse to back down. I stand united with our Tribal partners, our farmers, cities, businesses, and others who know this water is a vital resource for our state.

I stand united with Speaker Montenegro, President Petersen, and Leaders De Los Santos and Sundareshan who have been partners in this fight working with me to hold the upper basin accountable.

I will keep putting Arizona first and fight for the water we are owed.

Last year, I created a Colorado River Litigation Fund to ensure we have the resources we need to fight the upper basin for the water we deserve. This year, my Executive Budget will include thirty million dollars for a new Colorado River Protection Fund to supercharge our conservation efforts and continue building a sustainable and growing economy.

To pay for ongoing investments, I am proposing one key action:

Make data centers pay their fair share for the water they use. The average Arizona family pays one cent for every gallon of water used in their home. If data centers were to pay the same amount, we could make a multi-million dollar deposit into the Colorado River Protection Fund every single year.

It's time we make the booming data center industry work for the people of our state, rather than the other way around. If we are to be successful, we must rethink our state's approach to data centers more broadly. More than a decade ago, we made a strategic decision to grow data centers by creating a tax exemption for them - I voted for it. Now, Arizona is a national leader in this sector. We must ask ourselves: should taxpayers continue subsidizing the data center industry?

I know my answer. My executive budget will eliminate the Data Center Tax Exemption, putting an end to a thirty-eight million dollar corporate handout. And I'm glad legislators in both parties agree with me - I can't wait to get to work and get this done.

Protecting Arizonans' way of life is a pillar of the Arizona Promise. And beyond our actions on water, one of the most impactful ways we've increased that protection is a commitment to housing affordability.

Over the last three years, we broke ground on more affordable housing units than in any other three-year period in our state's history. In 2024, Maricopa County led the nation in housing construction. The latest numbers show housing prices are on the decline. We've launched a war on the cost of housing, and it's starting to pay off.

Through our Arizona is Home program, we have connected Arizona families to down payment assistance and interest rate buydowns. We have approved over sixty thousand single-family homes for development in the West Valley - with more to come. And we've taken action to give Arizonans the freedom to build more housing on the property they own - and to do it without unnecessary and burdensome government red tape.

These are real results and Arizonans are seeing the benefits. But we can't take our foot off the gas.

That's why, today, I am announcing a new Housing Acceleration Fund to build more affordable housing, faster. The fund leverages public and private dollars to unlock lower cost financing and multiply the affordable homes we build. For every dollar we invest, we'll generate up to ten dollars to finance projects that house Arizonans.

I'm proud to also announce we will kickstart this initiative with a two-and-a-half million dollar investment. I call on this Legislature to continue this funding annually to ensure we build the housing Arizona families need.

Let's keep fighting to bring back the Arizona that I grew up in - one where a working-class couple could buy a house to call home and raise their family in.

And while we must continue to do everything we can to make buying a home more affordable, we must not lose sight that, for many, simply living has gotten harder as expenses have increased.

Utility bills are now one of the largest expenses people pay every month - and too many Arizonans are falling behind.

To support our fellow Arizonans, today I am proposing the creation of the Arizona Affordability Fund to help families manage the high cost of housing and utilities. The fund will help working class families pay their utility bills, weatherize their homes to lower energy costs, and build more affordable housing units.

I'm starting this initiative today with a twenty million dollar investment.

But we need a funding source for the long-run. Tackling affordability isn't a one-year project. That's why I am proposing a nightly fee on short-term rental stays to fuel the Arizona Affordability Fund. By asking vacationers to kick in three dollars and fifty cents … less than a cup of coffee [pause]… we can deliver major change for the working people in our state who are struggling to get by.

When we deliver security like this, the Arizona Promise creates immense opportunity.

The kind of opportunity that means finding a good-paying job that supports a family. That means having the chance to buy or rent in a neighborhood where you want to put down roots. That means getting ahead so you can build the future you want.

It's the type of opportunity my parents worked so hard to achieve while raising my siblings and me in Tempe. The type of opportunity I hope the next generation has when they raise their own families right here in Arizona.

And, despite the challenges before us, we are taking action to make that a reality again.

We are attracting entrepreneurs and multinational businesses to set up shop in Arizona.

We are connecting thousands of Arizonans to apprenticeships and family-sustaining jobs.

We are investing in rural infrastructure like bridges and affordable, high-speed internet across all communities.

We are supporting our state universities and community colleges as they educate and train our workforce.

We are cutting red tape to build our energy future.

We are reducing costs and creating jobs.

These are real-world examples made possible through our vision of the Arizona Promise and bipartisan solutions.

However, if this Legislature truly wants to create opportunity for Arizona families, then it's time to support public education and bring accountability to the ESA entitlement program.

While other government entitlements have strict requirements and oversight, the ESA program continues to operate unchecked, squandering taxpayer dollars with no accountability. It seems like every day, we learn about new shopping sprees happening at the expense of taxpayers…diamond jewelry, high-end clothing and furniture…who knows what taxpayers will be footing the bill for tomorrow?

In my plan, the original mission of the ESA program - to help kids with disabilities and in military families - remains untouched. But even the program's most ardent supporters must agree: it's time we tackle the waste, fraud, and abuse to ensure taxpayer dollars are going towards true educational purposes.

When we revisit a renewal of Prop 123 this session, let's end the partisan calls to add constitutional protections to the ESA entitlement program.

The original ballot measure was successfully passed because it enjoyed the support of teachers, parents, business leaders, and Republican and Democratic elected officials. Let's recapture that spirit and keep the divisive, partisan policies out of negotiations. Let's get serious about our once-in-a-decade opportunity to invest in our state's public schools without raising taxes.

It is time to renew Prop 123 and stop the teacher exodus … to stop underfunding schools and letting them crumble … and to give our students the tools they need to thrive.

Let's show parents, the business community, and the nation that Arizona is serious about building the world-class public education system we need for the future, through every stage of education.

Finally, the principle upon which our state and country were born is freedom. We believe in and realize the promise of freedom every day.

But freedom is not inevitable nor guaranteed. We have to forge a path of liberty every day to keep it alive - and Arizonans will always rise to that challenge.

I think of so many Arizona trailblazers who have paved this way, from Barry Goldwater and John McCain, to Mark Kelly and Gabby Giffords, from César Chávez to Sandra Day O'Connor to Pat Tillman.

Freedom to venture to and from all four corners of our state, to express ourselves and petition our government, to decide who to love, to do better tomorrow than we are today.

Freedom to make your voice heard at the ballot box.

Freedom to make your own medical decisions, including how and when to grow your family.

Freedom to realize a better tomorrow for your kids and grandkids.

Freedom - in all its shapes and sizes - is in the DNA of Arizona. Generation after generation, we have protected our citizens from federal overreach, from misguided politicians, from economic hardship, from terrorism and cyber threats, from drought and other natural disasters. We have braved tumultuous days and emerged stronger - a national and international leader in biosciences, advanced chip manufacturing, aerospace, and other future-defining industries.

We have never lost sight of the north star of freedom that makes it all possible.

That was certainly the case for me.

Where else can someone whose family relied on food stamps to get by be the first in her family to graduate college - from two of our state's public universities?

Where else can a social worker who supported domestic violence victims carry that experience into the Capitol to make lives better?

Where else can a stressed mom who had to take second and third jobs to support her kids go on to fight for families as governor?

That's what makes Arizona such a special place. Yes, we have stunning natural beauty - the most stunning of all fifty states.

But our freedom is what truly sets us apart.

This is the Arizona Promise - and we all deserve to be a part of it.

I am proud of how far we've come in making that promise a reality. But Arizona families can't afford for us to go backward.

Without a doubt, there are challenges ahead: Washington, D.C. elites will try to divide us using zero-sum politics. They'll sneer at bipartisanship, vilify communities, and put ideologies over common sense.

Make no mistake, though, our state's full potential is realized when we work together to do what's right for our citizens and overcome the naysayers and the hyper-partisans.

We have the opportunity before us and we must seize it.

Together, we can lower taxes for Arizona families now.

We can make housing and energy more affordable.

We can protect our communities from criminals and drugs.

We can craft water policy that protects our most precious resource while advancing economic development and security.

We can guarantee Arizona remains the best place in the country to start or grow your business.

Together, we can ensure Arizona is blessed with security, opportunity, and freedom.

Arizonans are counting on us and we will deliver.

Now, let's get to work.