Supporting Document (36a0b2a5...)

Item 19
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REPORT
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Meeting Date: 
January 13,2026
General Plan Element: 
Public Services & Facilities
General Plan Goal: 
Efficiently plan and manage infrastructure, facilities, and public
service operations
ACTION
Presentation by the City’s state lobbying services contractor, Dr. Marc Osborn of Kutak Rock LLP, 
on the upcoming 2026 Arizona Legislative Session.
BACKGROUND
The 57'*' Arizona State Legislature is scheduled to reconvene for its Second Regular Session on 
January 12,2026. In preparation for the upcoming session, the City Council will receive an early 
overview of the legislative environment state budget outlook, and major policy issues expected to 
be considered by the Legislature.
ANALYSIS & ASSESSMENT
Dr. Marc Obom of Kutak Rock LLP, the City’s state lobbying services contractor, Will provide an
overview of the 2026 legislative session, including:
• 
An update on the FY2027 State Budget outlook, which is projected to be extremely 
constrained, with limited discretionary funding available.
• 
Anticipated major policy issues expected to be considered during the session, including 
education funding, water policy, housing, infrastructure, public safety, election-related 
legislation and other matters affecting municipalities.
• 
Key legislative dynamics and timelines relevant to the City’s state advocacy efforts
This briefing will assist City Council in understanding the fiscal and policy context heading into the
2026 session and ongoing direction related to the City’s legislative priorities.
RESOURCE IMPACTS
There are no fiscal impacts associated with this presentation.
OPTIONS & STAFF RECOMMENDATION
Recommended Approach
Provide direction for staff, as appropriate.
Action Takm.
Blueink Bundle ID: rzU02qWTfg
No Action or direction required/taken/given

City Council Report | 2026 Legislative Agenda
RESPONSIBLE DEPARTMENT
Government Relations, City Manager’s Office
STAFF CONTACTS
Sara Sparman, Government Relations Manager, 480-312-2511, SSparman@ScottsdaleAZ.gov
APPROVED BY
^egU/cMsr
12/24/25
Jeff Walther, Assistant City Manager 
(480) 312-7954, JWalther@Scottsdale/\Z.qov
Date
12/24/25
Greg Caton, City Manager
(480) 312-7759, GCaton@Scottsdale/^.qov
Date
ATTACHMENTS
1. 2026 Legislative Session Preview Presentation
2. 2026 Legislative Agenda
Page 2 of 2
Blueink Bundle ID: rzU02qWTfg

12/24/2025
2026 Legislative Session Preview
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KUTAKROCK
kutakrockcom
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57^*^ Arizona State Legislature Reconvenes
Session convened on January 12,2026: The 57th 
Legislature's Second Regular Session began with 
Governor Hobbs' State of the State address.
Governor's priorities: K-12 education, infrastructure, 
public safety, water policy, and modernizing state 
government.
Challenging fiscal backdrop: Softening revenues and 
General Fund pressure will constrain policy ambitions 
and drive difficult budget negotiations.
Elechon-year dynamics: The 2026 election cycle will 
heavily influence legislative decision-making, making the 
session both politically charged and consequential.
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2
KUTAKROCK
2
ATTACHMENT 1
1

12/24/2025
Arizona Budget Update
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V
Tight FY 2027 outlook: JLBC projects $17,38B in 
revenues and $17.31B in spending, leaving only a $68M 
surplus with little margin for new initiatives or 
economic shocks.
Limited flexibility: Education, Medicaid, and other 
formula-driven costs dominate the budget, constraining 
discretionary spending.
Agencies have been instructed by the Governor to cap 
FY 2027 General Fund requests at 2% above FY 2026 
levels
High bar for new policies: Any major policy changes 
will require offsets or new sustainable revenue, making 
disciplined prioritization essential.
1
KUTAKROCK
3
2026 Major Issues
Extremely tight FY 2027 budget: Projected $68M balance leaves little room for new spending or error.
Infrastructure & capital backlog: Water, technology, and other capital needs face funding shortfalls and likely 
delays.
Education funding pressure: K-12 and higher ed compete for scarce dollars; Prop. 123, ESA growth, AEL limits, 
teacher shortages, and facilities remain key issues.
Medicaid (AHCCCS) risk: Potential spending reductions, federal imcertointy, and higher administrative costs 
strain the buciget.
Water, natural resources & resilience: Long-term drought, groundwater, and climate-related infrastructure 
needs compete with Limited funds.
State workforce & operations costs: Rising employee, health, cybersecurity, and compliance costs absorb budget 
capacity.
Tax policy & economic competitiveness: Little appetite for tax cuts amid warnings the state cannot afford 
revenue losses.
4
KUTAKROCK
4
2

5
12/24/2025
2026 Major Issues
Housing affordability: Renewed push for state preemption of local zoning and planning to increase housing 
supply.
Wildfire & insurance market stress: Rising premiums and nonrenewals drive debates over mitigation emd 
insurance regulation.
Election reform: Legislature must again fix primary election timelines and wiU debate broader election-law 
changes.
Water policy implementation: Ag-to-Urban groundwater program rollout, rural groundwater protections, and 
Colorado River negotiations.
State land trust reform: Potential constitutional changes to trust distributions and land-management flexibility. 
Border security: Likely push for tougher enforcement bills, with expected gubernatorial vetoes.
Divided government: Election-year politics heighten partisanship, limiting major bipartisan outcomes.
5
KUTAKROCK
2026 Anticipated Issues — Impacting Scottsdale
. Accessory Dwelling Units (ADUs)
. State-mandated ADU allowances and limits on local standards 
Local flexibility on fire safety, including sprinklers 
Infrastructure capacity, neighborhood compatibility, and STR use
. Affordable Housing & Housing Supply
State proposals to expand housing supply and zoning preemption 
One-size-fits-all mandates that erode ocal planning authority
. Local Control & Zoning Authority
; Continued state preemption of municipal land-use and design review
. Short-Term Rentals (STRs)
Limited local authority under current state law
• Public Safety & Technology
c Potential legislation regulating Automated License Plate Readers (ALPRs) 
t Photo radar bills
6
KUTAKROCK
6
3

7
12/24/2025
2026 Anticipated Issues — Impacting Scottsdale
Fiscal Stability & Revenue
Local taxing and fee-setting authority
Unfunded mandates and diversion of state-shared revenues 
^ Public Notice Publishing Bills 
r Impacts from the One Big Beautiful Bill Act
Transportation & Infrastructure 
c Transportation planning and funding 
Infrastructure investments
Water & Environmental Policy
Water sustainability and long-term resource planning
7
KUTAKROCK
Key Session Dates & Deadlines
January 2026
• Monday, 1/12 - Legislative Session Begins
• Thursday 1/15 - House 7-bill Introduction Limit Begins at 5:00 p.m.
• Tuesday 1/20 - Senate Bill Request Deadline (5:00 p.m.)
February 2026
• Monday, Ip. - Senate Bill Introduction Deadline (5:00 p.m.)
• Friday ^6 - House Bill Intro Set Preparation Deadline (5:00 p.m.)
• Monday Ip - House Bill Introduction Deadline (5:00 p.m.)
• Friday 2/20 - Last Day to Hear Senate Bills in Senate Committees/Last Day to Hear House Bills in House Committees
March 2026
' Friday 3/27- Last Day to Hear Senate Bills in House Committees / Last Day to Hear House Bills in Senate Committees
April 2026
• Friday ^17 - Last Day for Conference Committees (By House and Senate Rule)
• Saturday ^p5 - Saturday of the week of the 100'*' Day of Session (Target Sine Die Date)
KUTAKROCK
8
4

12/24/2025
Arizona Senate
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2026 Arizona Senate Party Breakdown
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D«nH»crats
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12/24/2025
AZ Senate Majority Leadership Team
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President Warren Petersen (R)
Majority Leader John Kavanagh (R)
Majority Whip Frank Carroll (R)
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AZ Senate Minority Leadership Team
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Minority Leader Priya Suadareshan (D) 
AMtstanl Minority Leader Catherine Miranda (D) Minority Caueus Leader Lela Alston (D) 
Minority Whip Rosanna Gahalddn (D|
12
KUTAKROCK
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12/24/2025
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2026 Arizona House Party Breakdown
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Democrats
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12/24/2025
AZ House Majority Leadership Team
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Speaker of the House Steve Montenegro (R) 
Majority Leader Michael Carbone (R)
Majority Whip Julie Willoughby (R)
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AZ House Minority Leadership Team
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Minority Leader Oscar De Los Santos (D) Assistant Minority Nancy Gutierrez (D) Co-MinorityWhip Quanta Crews (D) 
Co-Minority Whip Stacey Travers (D)
KUTAKROCK
16
8

12/24/2025
KUTAKROCK
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17
9

CITY OF
City of Scottsdale 
2026 Legislative Agenda
R AI r S?*** Arizona Legislature - Second Regular Session 
5W11OUALE ^^gth United States Congress
CORE PRINCIPLES
RESPECT SCOTTSDALE’S UNIQUE CHARACTER AND CULTURE
Safeguard the attributes that define Scottsdale’s voter-approved community vision, including exceptional 
experiences, outstanding livability, community prosperity, public engagement, and a distinctive character that 
sets the City apart.
PRESERVE LOCAL FUNDING
Preserve stable and diversified local revenue sources that sustain essential city services, long-term 
infrastructure investment, and the high-quality of community amenities that define Scottsdale’s expectational 
livability.
SUPPORT LOCAL AUTHORITY
Champion local decision-nriakihg and collaborative governance that empower Scottsdale to address community 
needs, uphold resident priorities, and maintain flexibility in implementing locally responsive solutions.
POLICY STATEMENTS 
COMMUNITY PROSPERITY
The City of Scottsdale fosters a diverse and resilient economy by advancing initiatives that attract investrhent, 
create quality jobs, and sustain the City’s distinctive character while supporting tourism, aviation, and long-term 
economic vitality.
• 
Advance initiatives that drive job creation, innovation, and balanced growth.
Encourage state and regional policies that attract and retain high-quality employers.
• 
Strengthen Arizona’s competitive position as a host for major events and tourism.
Advocate for federal and state aviation funding and reauthorization policies that support Scottsdale 
Airport’s infrastructure needs and operational growth.
Support revitalization and upgrades to information technology systems and infrastructure that improve 
reliability while decreasing costs and maintaining confidentiality, privacy, and security.
FINANCE
The City of Scottsdale promotes fiscal stability and local financial autonomy by endorsing initiatives that protect 
and maintain critical revenue streams, and ensure the City retains the resources necessary to provide 
essential services and sustain long-term financial health.
Preserve local taxing and fee authority, including transaction privilege tax (TPT), tourism/bed taxes, and 
user fees, and oppose preemption of local revenue tools.
Maintain state-shared revenues from sales, income, and other taxes, opposing any action that would 
reduce these revenues, vi/hether directly or indirectly.
1
ATTACHMENT 2

• 
Support solutions that offset lost federal, state, or local revenues from state dr federal actions, and 
restore or replace impacted revenue streams.
• 
Strengthen the stability of public retirement systems and reduce unfunded liabilities by coordinating with 
state partners to maintain prior jjension reforms.
Protect muhicipal utility rate-setting authority.
Preserve state and local government ability to use tax-exempt bonds as a primary tool for providing 
infrastructure, opposing any actions that eliminate tax-exemption and increase borrowing costs.
OUTSTANDING LIVABILITY
The City of Scottsdale promotes outstanding livability by endorsing initiatives that protect community character, 
preserve local authority, and enhance the quality of life for residents.
• Oppose efforts to limit municipal authority and affirm the right of local governments to control land use, 
zoning, design review, permitting, historic preservation, and fiscally responsible development.
Oppose actions that negatively alter or remove the City’s important and long-established ordinances 
and design standards in the natural environment and the McDowell Sonoran Preserve.
• Strengthen local government tools to manage the impacts of short-term rentals, safeguarding long-term 
housing availability and neighborhood livability through locally tailored regulation and effective 
enforcement.
Preserve effective and efficient approaches to public transparency and community engagement that 
embrace innovation, reduce administrative barriers, and timely access to information for residents and 
stakeholders.
• Ensure the City actively engages in aviation policy and technology improvements that enhance air 
traffic efficiency while minimizing community impacts.
PUBLIC SAFETY
The City of Scottsdale advances public safety and criminal justice as a collaborative partner, endorsing 
initiatives that protect residents, enhance operation, integrity and effectiveness, and promote trust and well­
being in the community.
Advance public safety and criminal justice initiatives that protect residents from crime, leverage 
technology, and uphold the City’s Public Safety Plan Ordinance.
Promote the responsible and transparent use of emerging technologies.
• 
Prioritize and invest in the mental, physical and emotional well-being of public safety employees 
through access to counseling, peer support, and wellness resources.
• 
Maintain a highly qualified public safety workforce through policies that support competitive 
compensation, modern training, and access to current equipment and resources.
• 
Support policies that protect and enhance the City’s.ability to provide emergency medical services and 
pre-hospital transportation services for residents and visitors.
2

I
Preserve strong local authority over building and fire codes and fireworks regulation to reduce fire risk 
and protect neighborhoods, businesses, and preserved open spaces.
• Support coordinated wildfire prevention and emergency response strategies that integrate technology, 
expand interagency preparedness, and strengthen protection of neighborhoods, open spaces, and 
natural resources.
TRANSPORTATION
The City of Scottsdale engages in transportation policy and planning as a collaborative partner, endorsing and 
aligning with initiatives that enhance safety, mobility, and economic Vitality, while preserving local input and 
oversight.
Endorse initiatives that maintain and improve roads, bridges, and related infrastructure to ensure safe, 
efficient, and reliable travel for residents, businesses and visitors.
Advocate for responsible innovation and funding of transportation tools, technologies, and projects that 
enhance traffic management, safety, and connectivity.
Align with regional and state transportation planning efforts that complernent the City’s priorities, while 
preserving Scottsdale’s ability to exercise input and oversight.
Facilitate collaboration on projects that support economic competitiveness, including infrastructure 
improvements that promote commerce, tourism, and essential services.
Engage in regional, state, and federal transportation coordination efforts to advocate balanced funding, 
multimodal connectivity, and infrastructure investments that enhance safety, mobility, and economic 
vitality.
WATER
The City of Scottsdale is committed to ensuring a sustainable and resilient water future by endorsing policies 
that enhance water conservation, support innovative water management practices and preserves local 
authority to manage and plan water resources effectively.
Promote policies that encourage water conservation, recycling and augmentation strategies, while 
enhancing tools for reliable local water managerrient.
Support initiatives that protect Arizona’s Colorado River entitlements, contractual rights, and priority 
usage through coordinated water-management actions, while integrating Scottsdale’s water priorities 
into State, regional and federal Colorado River policy frameworks.
Promote funding, incentives and statutory tools to reduce reliance on groundwater, bolster supply
resilience, and encourage participation in water-saving programs. 
• Oppose initiatives that weaken water supply safeguards.
Approved by Scottsdale City Council on November 17, 2025.
3

2026 Legislative Session Preview
Item 19

57th Arizona State Legislature Reconvenes
•
Session convened on January 12, 2026: The 57th 
Legislature’s Second Regular Session began with 
Governor Hobbs’ State of the State address.
•
Governor’s priorities: K–12 education, infrastructure, 
public safety, water policy, and modernizing state 
government.
•
Challenging fiscal backdrop: Softening revenues and 
General Fund pressure will constrain policy ambitions 
and drive difficult budget negotiations.
•
Election-year dynamics: The 2026 election cycle will 
heavily influence legislative decision-making, making the 
session both politically charged and consequential.
2

Arizona Budget Update
•
Tight FY 2027 outlook: JLBC projects $17.38B in 
revenues and $17.31B in spending, leaving only a $68M 
surplus with little margin for new initiatives or 
economic shocks.
•
Limited flexibility: Education, Medicaid, and other 
formula-driven costs dominate the budget, constraining 
discretionary spending.
•
Agencies have been instructed by the Governor to cap 
FY 2027 General Fund requests at 2% above FY 2026 
levels 
•
High bar for new policies: Any major policy changes 
will require offsets or new sustainable revenue, making 
disciplined prioritization essential.
3

2026 Major Issues
4
•
Extremely tight FY 2027 budget: Projected $68M balance leaves little room for new spending or error.
•
Infrastructure & capital backlog: Water, technology, and other capital needs face funding shortfalls and likely 
delays.
•
Education funding pressure: K–12 and higher ed compete for scarce dollars; Prop. 123, ESA growth, AEL limits, 
teacher shortages, and facilities remain key issues.
•
Medicaid (AHCCCS) risk: Potential spending reductions, federal uncertainty, and higher administrative costs 
strain the budget.
•
Water, natural resources & resilience: Long-term drought, groundwater, and climate-related infrastructure 
needs compete with limited funds.
•
State workforce & operations costs: Rising employee, health, cybersecurity, and compliance costs absorb budget 
capacity.
•
Tax policy & economic competitiveness: Little appetite for tax cuts amid warnings the state cannot afford 
revenue losses.

2026 Major Issues
•
Housing affordability: Renewed push for state preemption of local zoning and planning to increase housing 
supply.
•
Wildfire & insurance market stress: Rising premiums and nonrenewals drive debates over mitigation and 
insurance regulation.
•
Election reform: Legislature must again fix primary election timelines and will debate broader election-law 
changes.
•
Water policy implementation: Ag-to-Urban groundwater program rollout, rural groundwater protections, and 
Colorado River negotiations.
•
State land trust reform: Potential constitutional changes to trust distributions and land-management flexibility.
•
Border security: Likely push for tougher enforcement bills, with expected gubernatorial vetoes.
•
Divided government: Election-year politics heighten partisanship, limiting major bipartisan outcomes.
5

2026 Anticipated Issues – Impacting Scottsdale
•
Accessory Dwelling Units (ADUs)
o
State-mandated ADU allowances and limits on local standards
o
Local flexibility on fire safety, including sprinklers
o
Infrastructure capacity, neighborhood compatibility, and STR use
•
Affordable Housing & Housing Supply
o
State proposals to expand housing supply and zoning preemption
o
One-size-fits-all mandates that erode local planning authority
•
Local Control & Zoning Authority
o
Continued state preemption of municipal land-use and design review
•
Short-Term Rentals (STRs)
o
Limited local authority under current state law
•
Public Safety & Technology
o
Potential legislation regulating Automated License Plate Readers (ALPRs)
o
Photo radar bills
6

2026 Anticipated Issues – Impacting Scottsdale
•
Fiscal Stability & Revenue
o
Local taxing and fee-setting authority
o
Unfunded mandates and diversion of state-shared revenues
o
Public Notice Publishing Bills
o
Impacts from the One Big Beautiful Bill Act
•
Transportation & Infrastructure
o
Transportation planning and funding
o
Infrastructure investments
•
Water & Environmental Policy
o
Water sustainability and long-term resource planning
7

Key Session Dates & Deadlines
January 2026
•
Monday, 1/12 – Legislative Session Begins
•
Thursday 1/15 – House 7-bill Introduction Limit Begins at 5:00 p.m. 
•
Tuesday 1/20 – Senate Bill Request Deadline (5:00 p.m.)
February 2026
•
Monday, 2/2 – Senate Bill Introduction Deadline (5:00 p.m.)
•
Friday 2/6 – House Bill Intro Set Preparation Deadline (5:00 p.m.)
•
Monday 2/9 – House Bill Introduction Deadline (5:00 p.m.)
•
Friday 2/20 – Last Day to Hear Senate Bills in Senate Committees / Last Day to Hear House Bills in House Committees
March 2026
•
Friday 3/27– Last Day to Hear Senate Bills in House Committees / Last Day to Hear House Bills in Senate Committees
April 2026
•
Friday 4/17 – Last Day for Conference Committees (By House and Senate Rule)
•
Saturday 4/25 – Saturday of the week of the 100th Day of Session (Target Sine Die Date)
8

Arizona Senate
9

2026 Arizona Senate Party Breakdown

AZ Senate Majority Leadership Team
President Warren Petersen (R)
Majority Leader John Kavanagh (R)
Majority Whip Frank Carroll (R)

12
Minority Leader Priya Sundareshan (D)
Assistant Minority Leader Catherine Miranda (D)
Minority Caucus Leader Lela Alston (D)
Minority Whip Rosanna Gabaldón (D)
AZ Senate Minority Leadership Team

13
Arizona House of Representatives
13

14
2026 Arizona House Party Breakdown

AZ House Majority Leadership Team
Speaker of the House Steve Montenegro (R)
Majority Leader Michael Carbone (R)
Majority Whip Julie Willoughby (R)

AZ House Minority Leadership Team
Minority Leader Oscar De Los Santos (D)
Assistant Minority Nancy Gutierrez  (D)
Co-Minority Whip Quantá Crews (D)
Co-Minority Whip Stacey Travers (D)