Education Explainer" text with Arizona Capitol building, discussing the Governor’s Proposed FY 2027 Budget

January 21, 2026

The Governor’s Proposed FY 2027 Budget – What you need to know

On Friday, January 16th, 2026, Governor Katie Hobbs released her proposed FY 2027 budget.  The Governor’s priorities align with Arizona voters’ values and Education Forward Arizona’s advocacy agenda, including ESA accountability, Proposition 123 renewal, K-12 investments and postsecondary education funding. The proposed budget makes some progress in stabilizing and strengthening parts of the education continuum with more to go across the board, especially in the postsecondary education and workforce training required to meet Arizona’s long-term workforce demands and the Achieve60AZ goal.

Education Forward Arizona continues to urge the Governor and the State Legislature to prioritize education and training to the state’s overall economic health and workforce opportunities. As our polling shows, Arizona voters want leaders to fund education and training across our state.  

Below is a summary of the proposed budget from early childhood to education after high school.

Proposed Early Childhood Education Investments

Investments in quality early learning and childcare remain critical for families across the state and the economic health of Arizona as a whole. In the proposed FY 2027 budget, there is ongoing funding under the Bright Future Arizona Initiative to help support childcare affordability. These investments assist working families by helping to ensure children enter school ready to learn, laying the foundation for long-term academic success. Parents and caregivers can remain in the workforce knowing their children are in quality care, helping to support economic mobility for themselves, their families, and our state.  While this investment is a step in the right direction, the mix of federal funding uncertainty and decades of de-prioritization means many communities across the state still lack access to quality early learning, which is foundational for success.

Proposed K-12 Education Investments

The proposed FY 2027 budget includes investments in K-12 education to improve opportunities for all students, address enrollment growth, and stabilize school funding. There is new funding proposed to help students increase literacy scores through literacy coaches in elementary classrooms, an essential component of Arizona Literacy Plan 2030. These investments are an important step toward improving student outcomes and if paired with stronger, permanent investments in postsecondary pathways, will help ensure students can successfully transition from high school into careers.

Proposition 123 Proposed Renewal

While the details of a potential renewal of Proposition 123 are still to be determined, the Governor’s budget proposes that Prop 123 return to the voter-approved 6.9% distribution level from the State Land Trust (in other words, a re-authorization of the previous proposal). Under this budget proposal, the following items would be funded, assuming a return to the funding percentage passed by voters in 2016, which expired on June 30th, 2025: 

Proposed Empowerment Scholarship Accounts (ESAs) Accountability Measures

In her proposed FY 2027 Arizona budget, Governor Katie Hobbs has continued her push to strengthen accountability and transparency for Arizona’s ESA program, which has grown rapidly in cost and scope in recent years while incurring multiple issues with waste, fraud, and abuse. Her plan includes:

This aligns with Arizona voters’ concerns around how ESA taxpayer dollars are spent. 

Proposed Postsecondary Education & Workforce Training Investments

The proposed budget includes targeted investments in postsecondary education, workforce training, and educator pipelines. Greater, sustained funding for community colleges, universities, adult education, and credential-aligned pathways is essential to close workforce gaps and increase attainment statewide.  The proposed budget decreases the funding for the Arizona Promise Program by a significant amount, which will impact the number of students able to pursue postsecondary education.  

Even with these potential investments, Arizona continues to lag behind other states in sustained funding for postsecondary education and training. Notably, where other states are making long-term investments that expand capacity, improve completion rates, and ensure that learners of all ages can access credentials aligned with workforce demand, Arizona is consistently utilizing one-time appropriations and redirected resources.

Education Forward Arizona urges lawmakers to build on this proposal by significantly increasing ongoing investments in postsecondary education and workforce training, including community colleges, universities, dual enrollment, adult education, and student success initiatives. If they do not, Arizona risks falling short of its workforce needs and limiting economic opportunity for students, families, and employers across the state. Arizona has Everything to Gain when individuals continue their education and training after high school.