The Arizona House passed a “continuation budget” Tuesday night to keep the state government open on its terms rather than push through the governor-supported Senate budget.

State House Republicans have refused the $17.6 billion budget that was negotiated with the GOP-controlled state Senate and Gov. Katie Hobbs (D-AZ) after not being afforded the opportunity to engage in deliberations on the matter. Arizona House Speaker Steve Montenegro framed the move as the only way to keep the state government open. 

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“Once it became clear the budget deal negotiated by the Senate and Governor Hobbs lacked the votes and failed to meet our standards for fiscal discipline and transparency, we advanced a continuation budget to keep state services operating past June 30 and allow time for further negotiations,” Montenegro said in a Monday statement.

The continuation budget now heads to the Arizona Senate, which ended its legislative session after passing its budget last week. It’s unclear if Senate President Warren Petersen (R) would support a continuing resolution for the state. He has criticized House Republicans for refusing to negotiate with the governor.

Petersen has said he believes House Republicans have the votes to pass their budget, but Montenegro has not taken it up for a vote. 

“We have one job to do down here at the Capitol. Pass a real budget.  Not a fake budget for optics and talking points that will be guutted [sic] by a line item veto pen, but a real budget that has a consensus of conservative republicans and gets a signature.  I am proud of my caucus for not resorting to juvenile behavior. They have shown maturiity [sic] in the face of misinformation, intrigue, hypocrisy and deception,” Petersen wrote on social media after passing the budget in the state Senate.

Hobbs said the Arizona House’s continuation budget will “immediately be met with my veto pen.” 

“It’s time for House Republican leadership to come back to reality, stop wasting everyone’s time, and show some common sense by working with their colleagues in a productive fashion to deliver on behalf of the people of Arizona,” Hobbs said in a statement.

ARIZONA FACING GOVERNMENT SHUTDOWN OVER BUDGET STALEMATE

If a new budget is not in place by July 1, the start of fiscal 2026, the Arizona government will shut down. Montenegro has not said whether he is willing to risk an unprecedented government shutdown for the state over bringing up the Senate budget for a vote.

Hobbs has already directed state agencies to prepare for a government shutdown. If that happens, some state departments will shut down and an unknown number of the state’s 34,000 employees will be furloughed.