Hobbs, who has made affordability a central focus of her first four years, acknowledged that voters are demanding more. "I've worked across the aisle to lower costs," she said. "We've repealed the tax on rent. We've delivered historic tax cuts for Arizona families. But they're certainly telling us there's more to do."

With Democrats newly in control of the Legislature, Hobbs said she intends to continue working with lawmakers from both parties. She also noted that she has requested a federal waiver each year to allow the summer fuel blend of gasoline, which she said "raises costs a little bit," and that the request has been granted every time.

Giles, the former Republican mayor of Mesa, will serve in the newly created position of lieutenant governor. He said his selection reflects a bipartisan approach. "The governor has actually chosen someone from outside of her party to be a part of this team and to bring a bipartisan approach to solving these problems and addressing the issues that the voters told us are so important," he said. Giles added that his mayoral experience gives him a "passion" for affordability, transportation and education, and that details of his role will be announced in the coming weeks.

Hobbs said her top priorities, based on conversations with voters, are lowering costs, securing the border, protecting water and protecting public education. Asked whether she expects to issue fewer vetoes, she said, "I hope so," while making clear her approach will not change. "I have always focused on working with Republicans and Democrats on the issues that I think are most important to Arizonans," she said. "And I will continue to be a backstop if there are things that are extreme and that don't move Arizona forward."

On education, Hobbs predicted "a lot of momentum" for reforming the state's Empowerment Scholarship Account program, which an auditor general's report earlier this year flagged for lack of oversight, wasteful spending and conflicts of interest. "We've seen so much waste, fraud, and abuse in the program, and it's been reported on so many times," she said, adding that Republicans in the Legislature have resisted reining it in. She said reforms should protect "the original intent of the program, kids with disabilities, kids in struggling schools," and ensure taxpayer dollars go to education.

Hobbs also called for renewing Arizona Proposition 123, which boosted state land trust distributions to public schools for a decade before expiring in June. She said renewal would "invest billions of dollars in our classrooms without raising taxes" and that the measure "fell victim to election-year politics."

On border policy, Hobbs said the situation was "out of control" when she took office and that she "stood up to the Biden administration." Her administration, she said, focused on getting resources to local law enforcement and deployed the National Guard for drug interdiction, with more than 19 million fentanyl pills intercepted. She described Operation Desert Guardian as a joint local, state and federal effort targeting cartel activity, drug trafficking and human smuggling.

Asked about President Donald Trump's recent comment that his deportation policy "might be too tough," Hobbs said Arizona's approach avoided "the kind of really aggressive immigration enforcement tactics that the president was referring to." Those tactics, she said, "don't make us safer" and create "mistrust and fear" that "put law enforcement and Arizonans in harm's way."

The governor's remarks come as she prepares for a legislative session in the coming months, with her broader agenda still being finalized.