Governor’s quick veto of Republican tax plan puts Arizona taxpayers on the clock with “flawed” forms just in time for filing season.

Arizona has two Katie Hobbs. Candidate Katie Hobbs said the word “affordability” 14 times in her State of the State address on Jan. 12. Governor Katie Hobbs vetoed affordability by Jan. 16.

Affordability, inflation and government spending go hand in hand. President Ronald Reagan put it plainly: “We don’t have inflation because the people are living too well. We have inflation because the government is living too well.”

Arizona’s state budget has been living well. Annual revenues are up nearly $3.5 billion over the past five years. In the middle of an affordability crisis, Arizona House Republicans crafted a solution to return some of that surplus to citizens through tax conformity.

Each year, the Legislature conforms state law to federal tax changes through a process known as tax conformity. Because of the scale of those changes last summer, House Republicans worked with our Senate counterparts in November and called on the governor to join us in a special session. What did the governor version of Katie Hobbs do? Nothing.

Filling that leadership vacuum, House and Senate Republicans put forward a tax relief plan and introduced it days before the legislative session even began. Our plan helps workers by eliminating taxes on tips and overtime. It helps families by increasing the child tax credit and allowing deductions for childcare expenses. It helps small businesses by simplifying filing and accelerating depreciation. It helps seniors by providing deductions for retirement income.

Altogether, our plan returns $1.1 billion to taxpayers over the next three years. After vetoing it by 9 a.m. on a Friday, Governor Hobbs rolled out a budget carrying $650 million in new taxes and fees by noon.

House Republicans want Arizonans to live well. Governor Hobbs wants the government to live well.

The problem now is more than a clash of principles; it is a race against the clock. The governor’s Department of Revenue has already issued tax forms. Taxpayers have just three months to file, and the sooner refunds are returned to people’s pocketbooks, the better. But the Hobbs tax forms are flawed. They do not match her claimed plan for tax conformity, which was not made public until Republicans had already passed a full package through the Legislature. Worse, the forms include a bad policy.

Buried in the Hobbs tax forms is a state and local tax (SALT) deduction that primarily benefits the wealthy. Hobbs and Democrats routinely denounce this provision as a tax cut for billionaires, but they have confused which plan actually included it. Republicans eliminated that deduction and replaced it with a larger child tax credit and a new childcare deduction. The Hobbs tax forms now in circulation and already being used by filers still contain this so-called tax cut for billionaires. Had the governor signed our legislation, the Department of Revenue would already be working to remove it.

The chaos ahead is entirely of Hobbs’ making. Candidate Katie Hobbs talks about smaller tax packages. Gov. Katie Hobbs’ tax forms suggest she either supports billionaires or has no idea what she is doing.

Arizona’s affordability crisis cannot afford either.

Steve Montenegro is the Speaker of the Arizona House of Representatives and serves Legislative District 29 in the West Valley, Goodyear, and Surprise. Follow him on X at @SteveMontenegro.