The following is an original production of AZPM News.

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Katie Hobbs served for 12 years as an Arizona state lawmaker.

Then she entered and won the 2022 contest for governor.

Now she's asking voters to elect her to a second term as Arizona's top elected official.

A one-on-one conversation with Governor Katie Hobbs on The Press Room, starting now.

(upbeat music) Hello and welcome to The Press Room.

I'm Tony Perkins.

In her first State of the State Address, Governor Katie Hobbs pledged to address issues of affordability, water insecurity, and investment in public education.

In her campaign for reelection, she faced the same stubborn issues and more.

We'll focus on that during The Press Room today.

Governor Hobbs, welcome again to Tucson and welcome to The Press Room.

Thank you.

You've been governor for four years and in the course of our conversation, I'm gonna ask you some questions about what you feel your main accomplishments are.

But let's start with a very basic question at the beginning.

Why do you wanna run for a second term?

Well, when I ran in 2022, I promised Arizonans that I was gonna take on a lot of the tough challenges that we faced, challenges that quite frankly, a lot of my predecessors had kicked down the road, taking meaningful action on water to protect our water security, addressing housing affordability, meaningfully investing in our public schools, and overall working to lower costs for Arizonans and border security, which I think is something that, as a border state, we have really borne the brunt of the federal government's inaction.

I'm really proud of progress that we've made in all of those areas, but we didn't get those challenges overnight and I knew that we weren't gonna go in to fix them overnight.

And so there certainly is still work to be done.

And so I'm ready to continue doing that.

All right, let's talk about the priorities that you have for the second term and start with border security as a bipartisan concern.

Yes.

And it draws national attention to our state.

Let's talk about what you've accomplished regarding border security and more importantly, what do you feel is left undone?

Yeah, absolutely.

So border security has been a political football.

A lot of politicians like to come to the border and take pictures and do photo ops and really a lot of political stunts.

And that is not who I am and not how I tackle problems.

And so I got to work right away.

I met with a lot of the local police chiefs and the sheriffs to hear directly from them what the federal government's inaction was costing them and what support they needed from the state.

And we took action.

I've administered over $200 million to local law enforcement.

It's allowed them to get extra vehicles, retain deputies and improve technology and communications.

And we worked to build partnerships with local, state and federal officials so that we could work together.

I have sent National Guard to the border.

They are working to help with drug interdiction.

We launched Operation Desert Guardian, which is focused statewide on going after cartel activity.

And we've really worked to partner with the federal government.

And most recently, Congress has finally appropriated money to reimburse states for border related costs.

And so we submitted an application to get nearly a billion dollars back to the state that we've expended of state dollars and county dollars for border security.

We've had a lot of success.

We've interdicted over 18 million fentanyl pills, thousands of pounds of other illegal drugs, over 1500 illegal weapons.

We're going after human traffickers and drug smugglers.

And I heard from a sheriff earlier this week that really the border is at a manageable place right now.

And I think what we can't afford to do is take our eye off the ball and think that we're done because we have to stay vigilant all the time.

And we're focused on doing that and making sure that we're continuing to disrupt the cartel activity and keep Arizona safe.

On a sort of related topic, and that's about immigration.

And it's really exploded into a major issue, especially in the last two years, in regards to detention centers.

Some people in communities have spoken up, they say they don't want detention centers in their backyard.

So the question is, where would detention centers be placed?

What about these facilities in Arizona?

Yeah, I mean, I think that the Trump administration's approach to immigration enforcement is not being handled in a way that's keeping us safe.

It's being handled in a way that is designed for splashy headlines.

And going back to my earlier comment about political stunts and photo ops, I just mentioned all the success we've had on border security.

And we've been able to do all of that without these kind of tactics that we're seeing deployed that are creating fear and mistrust in our communities.

And quite frankly, put Arizonans and law enforcement in harm's way.

When Trump ran for president, he promised he would go after the bad guys, the criminals that are making America unsafe.

And that's not what they're doing.

They're going after Dreamers, they're going after people who have lived here for years and are contributing to their communities and not committing crimes.

And in many cases, in their zealousness to go after people, they're catching up American citizens or people that are legally here.

In Arizona, many times we're hearing from Native Americans who have proof of tribal citizenship and they're catching them up as well.

And that's not what anybody wants.

One other thing that people are talking about in their communities is data centers.

Yes.

Now, more than 10 years ago, and you mentioned this in your State of the State Address, you voted in favor of a tax exemption to make it easier for tech companies to build data centers in Arizona.

And this year you've led a drive toward getting a three year moratorium on those tax exemptions.

Now, in 2013, the question is, did you and your fellow lawmakers underestimate the impact that data centers were going to have on the state?

And how do you feel about that now?

Well, I don't think we got it wrong in 2013.

I think that tax incentive has done its job.

Arizona is a top market for data centers now.

And I think that there are absolutely legitimate concerns about water use, electricity use, shifting those costs onto other customers, and really valid neighborhood concerns about the impact in communities.

And we have to be listening to those things.

At the same time acknowledging that data centers are part of the high tech economy that we're growing in Arizona, and that there are places where they make a lot more sense than other places.

And there's certainly no intent to get rid of data centers.

And I don't think that's a realistic expectation in our current economy.

But we have to make sure we're addressing those concerns.

And I think that is something that is bipartisan.

I'm hearing from governors across the country that are taking some kind of action on data centers, whether it's ending tax exemptions, or temporary or permanent moratoriums.

And those concerns that here are all the same.

We have to make sure they're paying for themselves, that they're not overusing water or energy, and that we're addressing community concerns.

And I think this three-year moratorium on the tax breaks gives us a chance to craft the right policy for Arizona.

This also puts the state government in sort of a difficult situation because you do want to have the tech companies here and to have it add to the state's economy.

You have to balance the chip construction industry, for example, TSMC is gonna be a big player in the state's economy over the next several years ahead.

How do you make that balance happen between the chip companies, chip manufacturers, and what's happening to our environment?

Yeah, I mean, absolutely.

I think we have shown that we can grow and grow sustainably and that protecting our natural resources and continued economic development can go hand in hand.

We've done that through really smart water conservation policies, as well as just making sure that when companies come here, that they're cognizant of the needs and that we're implementing that growth in a strategic, sustainable way.

And that's been a priority.

And I think businesses like TSMC who've chosen to come here and so many others are following them, they're doing that because of the smart policies that we have in place around conservation, and then the investments we're making in workforce.

They know that Arizona is committed to their success and we are because their success means economic opportunity for Arizonans.

And so that's been the focus and that will continue to be the focus.

All right, now here's another topic that's sort of new to Arizonans.

Arizona folks get a chance to vote for a lieutenant governor for the first time.

You chose former Mesa Mayor John Giles to be your running mate.

Now my question is, what do you think Mr.

Giles will bring to your administration if elected over the next four years?

Well, let me start by saying, I chose John Giles to be on my ticket because I know he shares my commitment to putting Arizonans first and delivering for the people that we serve.

We come from different political parties, but we share the view that leadership is about bringing people together, solving problems and getting results.

I saw him do this as mayor of Mesa.

He built partnerships, he grew the economy, he expanded educational opportunity.

And like me, he's committed to putting Arizonans above party and I think so many of the challenges that we're facing are not Democratic or Republican.

And there's so many places to find common ground.

And when we focus on that, we can tackle those issues and get results.

And that is much more important than the partisan political games.

And this election really is a choice between leadership that's going to put Arizona first and get results or someone who's focused on bringing Washington- style division.

And so I'm excited to have the lieutenant governor on the ticket and I think all of those things I talked about that John delivered as mayor of Mesa, I'm excited to have that in my administration.

Do you have a specific role that he might play?

We are still working on that, but certainly all of the economic development, the educational work he's done are gonna be very valuable.

All right.

We are just days away perhaps from deciding where the Colorado River water use issue is going to land.

Lower basin states are expected to face cutbacks, including Arizona, from using the Colorado River water.

And that's caused a feeling of general water insecurity amongst a lot of people here who've been following this issue for a long time.

Now as governor, how would you reduce this anxiety, especially with the state's population growth and its infrastructure needs?

Well, I'm gonna break some news right here because we actually just got that decision from the federal government minutes ago.

And so what we know is that the record of decision and the operational guidelines for the next two years are what we had pushed for.

So first of all, the alternative was that the federal government was proposing to cut the central Arizona project by up to 77%, which would have been devastating.

It would have been really difficult to implement.

And because I pushed for the lower basin to submit an alternative plan, which we did, those cuts are gonna be shared across the lower basin.

And we have proposed the largest conservation program in Colorado River history.

And we've been working with our water users about how to implement those cuts.

So there are cuts, but they are far, far less than the proposed, what was originally proposed from the federal government.

So we still have work to do.

We're gonna be back at the negotiating table coming up with a longer term plan.

And it has to be a plan that shares cuts across all seven basin states.

And right now, the upper basin states have refused to conserve any water.

We've put real cuts on the table.

We're gonna be implementing real cuts with these two year operating guidelines.

And the upper basin needs to do the same.

And the federal government needs to hold them accountable to doing the same.

So Arizona is getting a break from the federal government but still looking for fairness in water use.

Yep, yeah.

And I've been very clear about this.

Nobody wants to end up in court, but we've secured millions of dollars to continue to fight for our legal rights on the Colorado River.

And I will continue to make sure that Arizona gets our fair share.

It is vital to our economy and to so many people's way of life here.

Let's go to another issue that you brought up and had a lot to say about during the state of the state in January, it's affordability.

Yes.

Those issues are growing and tariffs have affected almost every aspect of our economy in Arizona.

People are concerned about why everything is so expensive and more expensive as than it was.

How do you address these concerns and how will you address them in the next four years if elected?

Well, I've heard from Arizonans about their struggles with rising costs since I was running in 2022.

Then it was largely driven by housing prices and now we know that tariffs are affecting everything.

And so I've worked to lower costs for Arizonans.

I just recently announced that we've erased over a billion dollars of medical debt for over 600,000 Arizonans.

I've implemented a prescription drug program that saves Arizonans on their prescription drugs.

When it comes to childcare, that's another huge expense for families.

A family might pay more than tuition at our state's universities for childcare in a year and we know we need to make that more affordable and accessible and so we've invested the largest amount since the great recession in making childcare affordable for families.

On the housing front, we have built more affordable housing in the first three years of my governorship.

We built more affordable housing in that three year period than in any other three year period in the state's history.

We've also invested in helping first time home buyers with down payment assistance or mortgage rate assistance.

And we've implemented legislation and rules around groundwater that is saving water, but also making home building more affordable.

Also passed several bills that cut red tape to make home building more affordable.

And so addressing that, certainly utilities is another front.

We have issued rebates to homeowners on energy efficiency projects, which save them on those, what can be very cost prohibitive adjustments, but then save them on their utility bills down the road as well, and then as well as just helping folks with utility assistance, increasing the income cap to get that utility assistance, and intervened in rate cases saving over $300 million on what would have been higher utility rates.

And so I know there's more to do on the cost saving front, but we're gonna continue to look for ways to lower costs for Arizonans.

Homelessness is an enduring problem.

Tens of thousands of Arizonans need to use homeless services each year.

What can your administration do in the next four years to make sure that people have a safe and secure place to live?

Yeah, so I'm a social worker.

That is what got me into politics in the first place.

And I worked with homeless people.

So this is an issue that is really personal to me.

And I know that at the end of the day, homelessness is really a housing problem.

So we are focused on meeting the housing needs of Arizonans.

I talked about the affordable housing, but we've also invested directly into homeless services.

$60 million, which is more than has been historically done in the past at the state level to support service providers that are directly serving homeless individuals.

And the goal across the board is to get those folks into stable housing.

That housing has to be available for that to happen.

So we're working on that.

All right, let's switch over to education on this topic.

You've had an adversarial relationship with Tom Horne over the last four years.

How will you find common ground with his successor?

Whoever will replace him as a superintendent of public instruction?

Well, look, I think the biggest issue really is the out of control ESA program.

When Arizona established ESAs, and it was during my first year in the legislature in 2011, it was designed to help students with disabilities have their educational needs met.

And it has expanded.

Military children were included, but now it's this out of control.

It's universal.

Everyone has access to it.

There's no income caps.

There's virtually no limit to what parents can spend those dollars on.

And we've seen all kind of reporting about the waste, fraud, and abuse.

Using ESAs to purchase jewelry and lingerie and amusement park trips in California.

Not things that our educational dollars should be spent on.

And Superintendent Horne has made the very deliberate decision to not approve expenditures.

And so then we're seeing all of these things that shouldn't be allowed be allowed.

I have, so I know that, we'll see what, I've proposed limits on this at the legislature.

The legislature has not been willing to engage in implementing any kind of income caps or guardrails or anything to protect the tax dollars.

And I think that's a priority.

I don't know what the outcome of the superintendent race will be, but I'm looking forward to working with whoever ends up there to really do a better job at administering the program so that we're safeguarding taxpayer dollars.

All right, let's close out with this general question.

You've had four years as governor and a lot of responsibility that comes with that role.

What is it that keeps you up at night as a leader of this state?

I think there's two things.

The first one is healthcare.

And I knew that it was a priority for President Trump to work to reduce people's access to healthcare, to cut Medicaid, and we've seen that happen.

And the impacts are going to be devastating.

Right now, my administration is working to implement the Rural Health Transformation Program, which it's about $160 million over the next year to help mitigate some of that impact, but it certainly isn't going to replace those Medicaid dollars.

It can't replace those Medicaid dollars.

It's gonna help support rural healthcare, put some things in place that we need to put in place to improve access.

But we're already seeing the impacts of these cuts.

A hospital in Tucson has already closed, and there's going to be more.

And so that keeps me up at night.

It's incredibly frustrating.

The other thing is Colorado River water, and I'm just very glad to see the record of decision and operating guidelines that came out today that do implement the Lower Basin Plan and share those cuts across the Lower Basin.

But there's still more work to do.

And so I can sleep a little bit better on that issue right now.

All right, that's great.

That'll do it.

All right.

And thanks a lot.

Governor Katie Hobbs, thanks for joining us on The Press Room.

Let's do this again.

Yeah, thank you so much.

Republican candidate for Governor Andy Biggs declined our invitation for a one-on-one interview due to scheduling issues.

We'll be back after this.

University of Arizona political scientist, Samara Klar, joins us in The Press Room.

Samara, welcome again.

Thanks for having me back.

You know, we talked to the governor about the number of issues in the conversation, but as far as her reelection campaign goes, the economy appears to be the number one priority for Arizonans.

That's right.

I mean, in a way, we're looking at some of the same issues she dealt with when she last ran, but I think in 2026, the economy is possibly even more dominant, given that other issues have fallen by the wayside a little.

Arizonans aren't talking about abortion quite as much.

Arizonans aren't quite as concerned about immigration as they once were.

The economy is certainly the number one issue in this election.

Now, what about water policy?

The new agreement from the federal government limits Arizona's use of the Colorado River.

Yeah, this is a big issue, and I think it's one that Arizonans are maybe not as used to hearing about so much in an election, but already we are hearing so much about this from Governor Hobbs.

It seems in this race relative to her previous race, it was against Kari Lake, she's really out there a lot more aggressively with her TV ads, with her radio ads, and this is one of the issues she is talking about most often.

It's obviously very important to Arizonans, and it's something that she wants to be really on top of in this campaign.

Now, President Trump appears to want to be a player in this election in the midterms.

He wants to have himself front and center.

Is that gonna be a big challenge for Andy Biggs and a big benefit for Katie Hobbs, considering the unpopularity of the president?

Now, Trump's endorsements the last time, you know, when Hobbs was running against Lake, were not all that helpful.

In previous years, Trump's endorsements in Arizona have not done particularly well.

Kari Lake, McSally, Blake Masters, these were all Trump-aligned candidates who did not win their election, just to name a few.

Now, in the Republican primary, it did seem that Trump's aligned candidates, the people he endorsed, did seem to do better.

Now, we're not sure whether that's because he endorsed them or whether he's just getting better at picking winners, but his approval rating in Arizona is at an all-time low.

So it's not clear that having that Trump stamp of approval especially for someone like Andy Biggs, who does have this election-denying past that really seems to follow him around wherever he goes.

And that'll do it for The Press Room.

Thanks for being with us.

We'll see you next week.

(upbeat music) (dramatic music) Support comes from Banner Health, a nonprofit healthcare system with an integrative health plan committed to giving back to Arizona.

Last year, Banner reinvested $1.1 billion into the Arizona community.

Learn more at bannerhealth.com.

This has been an original production of AZPM News.