Arizona Water Woes Deepen: Funding Cuts and Stalled River Negotiations

PHOENIX, Arizona — Arizona faces deepening water challenges as funding for long-term supply development dwindles and Colorado River negotiations with other western states remain stalled. Governor Katie Hobbs told reporters June 25 that upper basin states have refused to conserve water or offer meaningful solutions, leaving Arizona to bear the largest shortages regardless of outcome.

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.

The state’s Water Infrastructure Finance Authority, known as WIFA, was funded with $1 billion in 2022 under former Governor Doug Ducey to develop new water sources. But roughly $667 million has already been swept to cover state budget shortfalls, and this year’s budget cuts an additional $20 million from WIFA’s water supply development fund. A coalition of more than 30 groups, including the Central Arizona Project and the League of Arizona Cities and Towns, wrote to Hobbs in May urging her to protect remaining 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 of the Arizona Municipal Water Users Association, warned that the state is falling behind on developing new water sources. The budget does include $6 million for a Colorado River litigation fund, anticipating a potential U.S. Department of the Interior decision that could trigger legal action. Four long-term water importation projects — including desalinated water and groundwater from California — have been approved for the study phase, with cost estimates expected in August 2026.

We’ve got some serious work to do and we’re approaching a point where it becomes more critical to have more water.

Queen Creek, located in the southeast Phoenix metro area spanning Maricopa and Pinal counties, has a population of roughly 70,000. The fast-growing city’s residents commute to employers including Intel and Boeing’s Mesa facilities, and as a desert community relying on imported water, statewide water policy has direct consequences for its future growth and development.