Arizona's Water Future Grows Uncertain as State Funding Shrinks, Talks Stall

PHOENIX — Arizona's long-term water security faces mounting pressure as the state's primary water infrastructure fund continues to shrink and negotiations among the seven Colorado River basin states remain at an impasse, raising the prospect of federal intervention in the coming weeks.

QUEEN CREEK, Maricopa County — located in the southeast Phoenix metro area straddling the Maricopa-Pinal county line, is a fast-growing community whose residents commute to Intel and Boeing Mesa.

The Water Infrastructure Finance Authority, created in 2022 with a $1 billion allocation under former Governor Doug Ducey, has now lost roughly two-thirds of that funding through repeated budget clawbacks. The current state budget takes another $20 million from WIFA's water supply development fund, though the fund for long-term water augmentation projects was left untouched.

"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," said Warren Tenney, executive director of the Arizona Municipal Water Users Association.

A coalition of more than 30 groups — including the Central Arizona Project, the League of Arizona Cities and Towns, and the Homebuilders Association of Central Arizona — sent a letter to Governor Katie Hobbs in May urging her to protect WIFA's remaining funds. Meanwhile, the governor has been blunt about the stalled interstate negotiations.

"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," Hobbs said.

The WIFA board continues to study four long-term water importation projects, including desalinated water and groundwater from California, with cost estimates expected in August. The current budget includes a $6 million litigation fund for Colorado River disputes. For comparison, water advocates point to Texas, where voters approved Proposition 4 in 2025, dedicating approximately $20 billion in sales tax revenue over 20 years to new water supplies. Arizona currently has no comparable funding proposal.