2026-2027; local government

Plain English Breakdown

The official status indicates the bill passed both chambers but was subsequently vetoed by the Governor on May 5, 2026. Therefore, none of its provisions became law.

SB1842: Rules for Small County Budgets in FY 2027 (Vetoed)

This bill proposed to allow small Arizona counties to use specific funds from special taxing groups to pay bills with a spending limit and reporting requirements, but it was vetoed by the Governor.

What This Bill Does

• Proposed allowing counties with fewer than 250,000 people to use money from countywide special taxing jurisdictions for any fiscal obligation in FY 2027.
• Set a limit of $1,250,000 on the amount these counties could use for purposes other than the revenue source's intended purpose.
• Required small counties to report by October 1, 2026, if they used a revenue source for different purposes and list the specific sources and amounts planned.

Who It Names or Affects

• Counties with populations under 250,000 based on the 2020 census.
• The Director of the Joint Legislative Budget Committee who would receive the reports.
• Countywide special taxing jurisdictions where the board of supervisors acts as the board of directors.

Terms To Know

Fiscal Year (FY) 2027

The government's one-year budget period ending in June 2027.

Special Taxing Jurisdiction

A specific area or fund within a county that collects taxes for designated purposes, such as schools or libraries.

Limits and Unknowns

• The bill was vetoed by the Governor on May 5, 2026, so it did not become law.
• The text does not state what happens if a county fails to submit the required report by October 1, 2026.

Official Summary Text

SB1842 - 572R - Senate Fact Sheet

Assigned to
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VETOED

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

VETOED

FACT SHEET FOR
H.B. 4149/S.B. 1842

2026-2027; local
government.

Purpose

Makes session law changes relating to local government necessary to
implement the FY 2027 state budget.

Background

The Arizona Constitution prohibits substantive law from being included in
the general appropriations, capital outlay appropriations and supplemental
appropriations bills. However, it is often necessary to make statutory and
session law changes to effectuate the budget. Thus, separate bills called
budget reconciliation bills (BRBs) are introduced to enact these provisions.
Because BRBs contain substantive law changes, the Arizona Constitution provides
that they become effective on the general effective date, unless an emergency
clause is enacted.

H.B. 4149 contains the budget reconciliation provisions for changes
relating to local government.

Provisions

1.

Continues
to allow a county with a population of fewer than 250,000 persons to meet any
fiscal obligation for FY 2027 from any source of county revenue designated by
the county, including monies of any countywide special taxing jurisdiction
where the board of supervisors serves as the board of directors.

2.

Continues
to cap, at $1,250,000, the amount of money a county may use for purposes
outside the county's revenue source.

3.

Continues
to require a county with a population of fewer than 250,000 persons, by October
1, 2026, to report to the Director of the Joint Legislative Budget Committee:

a)

whether the county used a revenue source for purposes other than the
revenue source's intended purposes to meet a county fiscal obligation; and

b)

the specific source and amount of revenues that the county intends to
use in FY 2027.

4.

Becomes
effective on the general effective date.

Governor's
Veto Message

The Governor
indicates in her
veto
message
that H.B. 4149, and this version of the FY 2027 state budget as a
whole, would cause Arizona to default on its debt obligations, endanger
vulnerable children, cut public safety funding and provide tax breaks for
billionaires, data centers and special interests. The Governor outlines her
specific concerns, including cuts to funding for specified agencies and
programs, and invites the Legislature to return to the negotiating table.

House Action
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Senate
Action

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3
rd

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rd

Read��������� 5/4/26��������������������������� 16-2-2

(H.B. 4149
was substituted for S.B. 1842 on 3
rd
Read)

Vetoed by the Governor 5/5/26

Prepared by Senate Research

May 7, 2026

AN/hk

Current Bill Text

SB1842 - 572R - S Ver

Senate Engrossed

2026-2027; local
government

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SENATE BILL 1842

AN
ACT

relating to local government.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1.
County fiscal obligations; report

A. Notwithstanding any
other law, for fiscal year 2026-2027, a county with a population of less than
two hundred fifty thousand persons according to the 2020 United States
decennial census may meet any county fiscal obligation from any source of
county revenue designated by the county, including monies of any countywide
special taxing jurisdiction of which the board of supervisors serves as the
board of directors. Under the authority provided in this subsection,
a county may not use more than $1,250,000 for purposes other than the purposes
of the revenue source.

B. On or before October 1,
2026, each county with a population of less than two hundred fifty thousand
persons according to the 2020 United States decennial census shall report to
the director of the joint legislative budget committee whether the county used
a revenue source for purposes other than the purposes of the revenue source to
meet a county fiscal obligation pursuant to subsection A of this section and,
if so, the specific revenue source and amount of revenues that the county
intends to use in fiscal year 2026-2027.