CSA Weekly Update (05.08.2026)
- May 8
- 10 min read
Updated: 4 days ago
In the May 8th, 2026, edition of the CSA Weekly Update:
Federal Visits: Santa Cruz County Advocating for Critical Local Issues
We Are Counties: Public Lands and PILT Teaser
State Legislative/Budget Update: Legislative Majority Proposal Vetoed, Bill Moratorium Remains, Legislature Adjourns until June 1st
Podcast Episode: Inside the Majority's FY27 Budget Plan
Save the Date: CSA Annual Policy Summit
We're Back! 2026 Annual CSA Sine Die Guess
Session Timeline: Important Dates
Where to Watch: Upcoming Live Proceedings
Lifelong Learning: Upcoming NACo Webinars
Federal Visits: Santa Cruz County Advocating for Critical Local Issues
Santa Cruz County Supervisors John Fanning (District 3) and Luis Carlos Davis (District 1) met with Arizona’s federal delegation in Washington, D.C., to advocate for federal funding that directly supports economic growth, safety, and efficiency in rural and border communities. Their efforts targeted key infrastructure improvements: the I-19 Rio Rico Frontage Road Corridor, which will improve traffic flow and access; Nogales Wash Lined Channel Reconstruction to reduce risk of flood, erosion, and to protect public health; West Frontage Road and Peck Canyon Roundabout Enhancements to increase road safety; the International Outfall Interceptor, supporting environmental health; and Modernization of the DeConcini Port of Entry to facilitate cross-border commerce. As a result, Congresswoman Grijalva committed $2.9 million to the Peck Canyon roundabout enhancements project, which aims to reduce accidents and improve traffic safety.
We Are Counties: Public Lands and PILT Teaser
As a part of the National Association of Counties (NACo) has released a video primer explaining the importance of public lands to counties, county responsibilities on public lands, and how payments in lieu of taxes (PILT) help to compensate counties for the maintenance of public lands. Please find NACo's We Are Counties: Public Lands and PILT Teaser linked here as well as embedded below.
For more information about public land stewardship in Arizona, please check out the Public Lands tab of the County Supervisors Association website, linked here.
State Legislative/Budget Update: Legislative Majority Proposal Vetoed, Bill Moratorium Remains, Legislature Adjourns until June 1st
This past Monday (May 4th), the State Senate passed the Legislative Majority’s FY 2027 budget proposal along party lines (16-12-2). This followed action by the State House on Wednesday, April 29th, which passed the package out in the same way (33-22-5).
The Governor VETOED that budget proposal on May 5th. You can read her veto letter HERE. Following this:
The State House of Representatives has ADJOURNED until June 1, 2026.
The State Senate has ADJOURNED until May 11, 2026. It is expected that they will then ADJOURN until June 1st.
The parties will continue to meet during this interlude, and legislative leaders retain the ability to bring members back earlier if a deal is reached before then.
Please find some additional context on the current budget deliberations below!
What’s the state’s fiscal condition heading into this budget?
On January 26, 2026, the Legislature’s Finance Advisory Committee (FAC) predicted that the state would have an ending balance – a surplus – of $578 million dollars over their three-year budget window.
More recently, on April 16, 2026, the FAC revised their estimates. They now predict that the state will have a surplus of $378 million over their three-year budget window.
This surplus is calculated by subtracting ongoing costs from revenues. But the Legislature has, for years, counted certain ongoing costs – like school building repairs and a subsidy for state employee health insurance – as “one-time expenses.” It’s basically just an accounting trick. This means they are not accounted for in the FAC’s numbers.
Given these “ongoing one-time expenses,” the state’s actual surplus in FY 2027 is much more meagre than $378 M.
It’s critical to remember, amidst all this uncertainty (and potential cuts), that the state has a substantial “rainy day fund” – the $1.664 billion Budget Stabilization Fund – that it has consistently chosen not to tap in times of potential deficit.
What’s the basics of the Legislative Majority’s FY 2027 proposal?
Our team has published a detailed briefing on this package, which you can find HERE
As mentioned, the state will start with a $55 million surplus.
If the Legislative Majority has made any one thing abundantly clear during this process, it’s that their priority is to maintain partial conformity with the federal income tax code. Their version of conformity is projected to cost $343 million in FY 2027.
A $343 million hit to a $55 million budget would leave the state in the red. So how are they paying for it?
They’re repealing a number of tax credits and TPT exemptions – mostly for solar and renewable energy, but also including credits for pollution control devices and R&D – this reduces costs by $75.4 million annually.
They’re sweeping about $360 million from other funds. The hardest hit are the Arizona Commerce Authority’s Arizona Competes Fund ($63.3 M), WIFA’s Water Supply Development Revolving Fund ($30 M), and the SMART Grant Fund ($26.3 M).
They’re instituting a broad 5% cut to all agencies – exempting education and public safety – for a total of $99.24 million.
IMPORTANT: These 5% cuts are based on an agency’s operating lump sum, which – for agencies like ADOA or the Criminal Justice Commission – actually include county pass through monies. Though the Legislature made it easy on themselves –leaving the choice of what 5% to cut to the agencies – the agencies theoretically have the latitude to take all of their 5% out of pass-through monies that were never part of their operations.
Governor Hobbs has recently announced an Arizona Capacity and Efficiency Initiative, which has a goal of cutting $100 million in waste over three years. To balance their budget, the Legislative Majority has indicated that money as a certain savings in FY 2028.
The budget also entirely eliminates the General Fund appropriation for the Office of Tourism.
In the end, the Legislative Majority’s FY 2027 budget will leave only $10.5 M on the table.
Why did the Legislative Democrats vote against the bill, and why did the Governor veto it?
The reasons are manifold.
First, the Governor and Legislative Democrats had proposed their own conformity plan – the “Middle Class Tax Cuts Package” (MCTCP) – which didn’t include any of the business-specific provisions of H.R. 1.
Second, the Governor and Legislative Democrats do not like the broad 5% cuts attributed to all agencies. The Governor notes in her press release that the budget cuts from services she believes are critical, such as the Department of Forestry and Fire Management, the Department of Child Safety (while they’re not subject to the 5% cut, some one-time system maintenance funding is walked out), and the Department of Water Resources.
Third, they do not like the aggressive fund sweeps. Some fund sweeps – like the $63.3 M for the Arizona Competes Fund, or the $14 M for the Housing Trust Fund – entirely zero out the fund. They also oppose sweeps in other, important areas, such as the sweep from the Border Security Fund ($10.9 M), and funds that they believe are already encumbered (Automobile Theft Authority Fund, Technology and Research Initiative Fund, Competes Fund, SMART Fund) or are structurally unbalanced.
Fourth, they do not like the tax credits that the Majority has decided to repeal (some business tax credits, some solar tax credits). They’d prefer eliminating the data center tax credit.
Fifth, the budget does contain some policy provisions – relating to Medicaid/SNAP eligibility – that the Governor had separately vetoed.
Why did the Legislative Majority adjourn for a month? Aren’t there still bills to process?
Yes, technically, there are still bills that can be processed and sent up to the Governor.
HOWEVER, you may remember that the Governor issued a bill moratorium on April 13, in an attempt to spur the Legislative Majority to send her their budget proposal. We’ve heard from members that the bill moratorium is staying put (for now).
Given that the Legislature spent much of their last few weeks moving bills as far as they could go before sending them to the Governor, there’s really not much left!
What is CSA staff working on?
If certain provisions of the vetoed budget find their way into law, they will significantly impact county resources.
We’re continuing to meet with legislators and staff to advocate for your priorities. Please find the documents CSA is sharing with legislators and staff below:
Podcast Episode: Inside the Majority's FY27 Budget Plan
In this week's Creatures of Statute, we provide a legislative update on the FY2027 state budget package released by the legislative majority. We walk through the proposal, including key spending priorities and revenue measures, and how it compares to the Governor’s January executive budget. We also cover Governor Hobbs’ veto of the package, the breakdown in negotiations over major policy items, and what it all means for counties moving forward. You can access the episode here.
Save the Date: CSA Annual Policy Summit
In October 2026, Supervisors from across the state will meet in Coconino County for the Annual CSA Policy Summit. The 61 county supervisors use this event to vote on the Association's 2027 legislative, budget, and research agendas. Registration details will be out soon. Looking forward to seeing you all there!
We're Back! 2026 Annual CSA Sine Die Guess
It's that time of year again: the session has officially passed its 100-day mark! However, the end is not yet in sight as budget negotiations are not yet concluded. With much work left to be done, it's left us wondering when the legislature will conclude its business for 2026.
If you'd like to dust off your legislative crystal ball, try your luck with the Annual CSA Sine Die Guess!
Last year's winner of the Annual CSA Sine Die Guess was Graham County Supervisor Paul David! The submitted guess was for June 20th, meaning Supervisor David was only off by 6 days!
The rules are as follows:
We'll only ask for your name, e-mail, and your guess so we can track who responds.
Only submit one response per person.
Answers will not be accepted after May 15th, so you have two weeks to submit your guess!
If two respondents pick the same day, the time will be the tiebreaker.
The individual who wins will get kudos in our weekly newsletter (we'll check with you first, otherwise we'll probably just say an anonymous winner, mention your county, and name 2nd place).
Please find the link to the Sine Die Guess form here: The Sine Die Guess #4 (Try and Guess the '26 Sine Die)
Session Timeline: Important Dates and Deadlines
This week, the legislative majority budget proposal was passed by the Senate and subsequently vetoed by the Governor. For more details on the vetoed majority budget, please see the previous article: State Legislative/Budget Update: Legislative Majority Proposal Vetoed, Bill Moratorium Remains, Legislature Adjourns until June 1st
As the 57th Legislature, 2nd Regular Session progresses, the Association will continue to provide updates. Please find additional deadlines linked here as well as listed below:
Where to Watch: Upcoming Live Proceedings
The Legislative Session has reached a critical point in the session timeline - committees are no longer meeting. As such, any action taken from this point forward will be on the floor, in Rules, or in Caucus. These agendas typically are not released until the day before, so predictability becomes more difficult. As such, rather than updating on the next week's action, we will be updating you on where to find agendas as they become available.
To see the full legislative calendar, click here.
To see live proceedings, click here.
To see archived meetings, click here.
NACo’s AI Leadership Academy
Lead Your County into the AI Future
The question isn't whether AI is coming to your county—it's how effectively you will lead the transition.
Join the next NACo AI Leadership Academy cohort starting May 11th. This program moves past the hype, giving you the practical tools to navigate risks and implement technology successfully.
Master the Pillars of Modern Leadership:
Innovation: Empower your staff to explore new technological frontiers.
Collaboration: Build cross-functional teams for seamless implementation.
Strategy: Align tech investments with your organization's specific needs.
Equity: Ensure new initiatives benefit all employees and residents.
Enrollment & Exclusive Discounts
Maximize your budget by enrolling your entire team.
Individual Price: $1,000
Team Discount: $750 per person (for groups of two or more)
Lifelong Learning: Upcoming NACo Webinars
2026 Elections: Local Government Roles and Responsibilities Webinar
Monday, May 11, 2026 | 1-2PM EST
In partnership with the Local Government Legal Center (LGLC), join legal and election experts in a discussion regarding the regulatory and administrative responsibilities local elected and executive leaders, and election administrators should understand for the upcoming election cycle. This webinar will provide an overview of the new executive orders, and federal policies impacting the upcoming 2026 elections, as well as the legal parameters and the legislative proposals local governments should understand that may impact their roles and responsibilities for election administration.
Date: May 11, 2026 | Time: 1-2PM EST
Moderated by Amanda Karras, Executive Director/General Counsel, International Municipal Lawyers Association
Speakers include:
Seth Bluestein, City (and County) Commissioner, Philadelphia, PA
Michael Haas, City Attorney, Madison, WI
Leslie Reynolds, Executive Director, National Association of Secretaries of State
The Local Government Legal Center (LGLC) is a coalition of national local government organizations formed in 2023 by National Association of Counties (NACo), National League of Cities (NLC) and International Municipal Lawyers Association (IMLA) as the Founding Members along with Associate Members Government Finance Offices Association (GFOA) and International City/County Management Association (ICMA), to provide education to local governments regarding the Supreme Court and its impact on local governments and local officials and to advocate for local government positions at the Supreme Court in appropriate cases.
To register, click here.
Breaking the Cycle: Behavioral Health Diversion Strategies for Counties
Tuesday, May 19, 2026 | 3-4 P.M. ET
Across America, many 911 calls involving behavioral health crises still result in arrest rather than a connection to care. For counties, this is not just a public safety challenge; it is a fiscal and public health imperative. Jails and emergency departments remain the default response for individuals in mental health and substance use crises, contributing to higher system costs and deepening the cycle of criminalization for people who need treatment.
This interactive fireside chat brings together county leaders and behavioral health experts to explore how communities are building the diversion infrastructure to change outcomes. Drawing on established and emerging models, panelists will examine what effective behavioral health crisis co-response looks like in practice and what distinguishes counties that have built durable diversion systems from those still relying on arrest as a default.
Panelists will speak candidly about their experience in local implementation, including funding strategies and the development of local cross-system partnerships. Whether your county is exploring its first co-response pilot or looking to scale and sustain existing efforts, this session offers practical, evidence-grounded insights for leaders ready to move from default to design.
To register, click here.
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