The bipartisan plan trims net spending by $68 million and sets aside money for child safety, wildfire suppression, rural hospitals and corrections.
Gov. Hobbs and GOP lawmakers reached a bipartisan budget agreement, with final legislative votes expected in the House and Senate on Thursday.
The agreement comes more than a month after Gov. Hobbs vetoed the original budget, which excluded the Arizona Department of Public Safety and Arizona Department of Child Safety.
As part of the package, $112 million is reserved for corrections operations, including a four percent correctional officer stipend, while $58 million supports Child Safety operations.
Arizona Democrats claimed the GOP plan primarily benefits the wealthy and corporations, while Gov. Hobbs says the budget delivers a $1.4 billion tax cut for working-class Arizonans.
GOP lawmakers say the budget makes Arizona the only state to deliver President Donald Trump's tax cuts at the state level; it also includes a three-year moratorium on data center tax incentives.