The Joint Legislative Audit Committee is reviewing the State Land Department’s management, concerned that State Trust land sales were not “transparent and in the trust beneficiaries’ interest,” under Governor Katie Hobbs’s (D-AZ) current policies.
The committee had raised concerns after the department showed a lack of oversight of statutory requirements and of plan development.
Including invoices, returned checks, and application backlogs, they have also highlighted that their office has been receiving many complaints regarding the transparency in commercial development interests.
After the hearing, documents proved that Governor Hobbs issued a “harmful land-use agenda,” which has been weakening the Trust’s ability to help schools generate revenue.
Witnesses at the hearing reported that, under the Hobbs administration, the Land Department allowed large areas of state land to remain unused rather than moving them into active economic roles.
Additionally, they noted that some farm leases ended without new tenants in place, that many mineral lease applications were paused for uncertain periods, and that sizable tracts of developable land near cities were not brought to public auction, even though the acreage could accommodate more than 200,000 housing units.
These issues suggest a broader concern that the Department may be missing out on significant revenue for the Trust due to internal practices that may be preventing Trust land from being used to its fullest potential, with effects on Arizona’s public schools and other beneficiaries.
Arizona Officials Come Forward
“Arizona’s trust lands exist for one purpose: to generate revenue for our public schools,” JLAC Co-Chair Representative Matt Gress (R-AZ) stated. “Instead of putting these lands to economic use, the Governor is letting them sit idle. In her view, the ‘highest and best use’ of land is no use at all. That’s fiscally irresponsible, reducing the land available for new home construction and the funds available for K–12 education.”
Along with Representative Michele Peña (R-AZ), Vice Chair of the House Land, Agriculture, and Water Committee, explained, “Mining and agriculture have helped fund our schools for more than a century.”
Peña tells the committee that, in her view, the current policies under Governor Hobbs disadvantage traditional industries despite their long history of contributing rent and royalty revenues to the Trust. “They come from a Governor who believes Arizona’s legacy industries are a problem to be eliminated, rather than an economic opportunity to be utilized, simply because her radical environmental allies oppose them,” she argues.
Moreover, Representative Neal Carter (R-AZ) said the Department’s land-use choices parallel the administration’s water policies, which set growth limits around Phoenix and, in his view, constrained housing supply and slowed economic growth.
“As with the Governor’s water policies, her land-use policies directly conflict with the state’s housing needs and the need to fund education,” Carter explained. “Her administration keeps putting far-left priorities ahead of Arizona’s students and families.”
The Joint Legislative Audit Committee and the Committees of Reference for the Department’s upcoming review are pursuing continued operations to prioritize transparency and ensure complete, efficient, and lawful compliance.
