Arizona Water Funding Dwindles as Colorado River Talks Reach Impasse

PHOENIX, Arizona — Arizona’s dedicated water augmentation fund has been severely depleted by repeated budget sweeps, leaving the state behind on developing new water supplies even as Colorado River negotiations between basin states remain at an impasse, water advocates and state officials say.

Queen Creek, a fast-growing town of approximately 70,000 spanning the Maricopa-Pinal county line in the southeast Phoenix metro area, is home to many residents who commute to Intel’s Chandler campus and Boeing’s Mesa facility.

The Water Infrastructure Finance Authority of Arizona was established in 2022 with $1 billion to develop long-term water sources such as desalination and groundwater importation. However, approximately two-thirds of that funding has been clawed back in previous budgets, and the current state budget takes another $20 million from WIFA’s water supply development fund, though the long-term augmentation fund was spared. In May, more than 30 organizations—including the Central Arizona Project, League of Arizona Cities and Towns, and the Arizona Municipal Water Users Association—urged Governor Katie Hobbs to protect the remaining WIFA funds.

“We as a state need to show that we are seriously working to come up with new supplies to help offset reductions to the Colorado River. We’re definitely behind. We’re not as far along as we should be.” — Warren Tenney, Executive Director, Arizona Municipal Water Users Association

“The upper basin has consistently refused to come to the table with real solutions. They refuse to conserve any water in a southern state deal. That is not acceptable to Arizona. We will end up taking the largest shortages, no matter what happens.” — Governor Katie Hobbs

The Colorado River negotiations between upper basin states (Colorado, Wyoming, Utah, New Mexico) and lower basin states (Arizona, California, Nevada) have stalled, with no compromise in sight. The state budget includes a $6 million litigation fund for possible legal action once the U.S. Department of the Interior issues an expected decision on river allocations. Even rural Arizona communities that receive no Colorado River water could see increased pressure on local supplies.

WIFA’s board recently re-elected its leadership and is advancing four long-term water importation projects approved for study last fall, with cost estimates expected by August 2026. Options under consideration include desalinated water and groundwater from California. Water advocates point to Texas’ Proposition 4, which dedicates approximately $20 billion over 20 years from sales tax revenue to new water supplies, as a model Arizona has not matched.

Source: https://azcapitoltimes.com/news/2026/06/26/water-woes-continue-as-funding-for-statewide-solutions-dwindles/