While elected officials bicker over who is to blame for a financial shortfall at the Arizona Department of Economic Security, parents of children with disabilities are worried the crisis could eliminate support and services for their kids.
Democratic Gov. Katie Hobbs’ administration is asking the Legislature to increase DES’ budget by $122 million this year to cover higher-than-anticipated costs in the Division of Developmental Disabilities, which administers the program that provides Medicaid funding for individuals with disabilities in long-term care.
Rep. David Livingston (R-Peoria) and Rep. Matt Gress (R-Phoenix) blamed Hobbs’ administration for the shortfall, arguing it decided to continue a program that pays parents who operate as caregivers for their children even though the Legislature did not provide enough funding to sustain the program in this year’s budget.
A temporary version of the program began in 2020 during former Republican Gov. Doug Ducey’s tenure under a federal program to address an existing caregiver shortage that was exacerbated by the COVID-19 pandemic. Federal funding fully paid for the program initially but, starting April 1, the state is responsible for about 32% of those costs, DES Deputy Director Wes Fletcher said.
The Hobbs administration received federal approval to make the program permanent in February 2024. And it asked lawmakers last year to give the department enough money to pay for the new program as the federal COVID funds previously used to pay for it dried up.
Lawmakers did not do that, but DES under Hobbs moved forward with the Parents as Paid Caregivers program anyway, Gress said.
“Gov. Katie Hobbs decided to move forward on a proposal without appropriate legislative authority, without appropriate appropriations, and she has bankrupted this program,” he claimed.
Hobbs disputed that characterization, saying the additional money is needed to address caseload growth.
“Supplemental budgeting requests are a routine part of the budgeting process, and it's just very telling to me that this is the request that's getting so much attention when nobody batted an eye over supplemental requests for the ESA program, which is an out-of-control entitlement,” Hobbs said, referring to the state school voucher program that is supported by Republicans.
“Is it more important that [Gov. Katie] Hobbs get blamed or is it more important that our kids stay alive?”Parent Courtney Burnett
According to legislative budget analysts, both sides are partially right.
They found the need for new monies is largely driven by higher-than-anticipated enrollment and cost of services for the state’s long-term care program. The latest state budget projected 4.5% enrollment growth but that figure is closer to 6.8%, they told lawmakers. And costs of service came in at 11.2%, well above the 4% projection.
And that cost of service increase “appears to be due to substantial cost increases in the Parents as Paid Caregivers Program,” according to legislative budget staff, who estimated the program accounted for $57 million in new costs.
Without the additional funding requested by Hobbs, the division could run out of money at some point in May, Fletcher told lawmakers in January.
But, so far, the Legislature hasn’t acted to send that money to the agency.
On Wednesday, GOP lawmakers in the House Appropriations Committee blocked an attempt by Rep. Nancy Gutierrez (D-Tucson) to rewrite an unrelated Republican bill in order to send the emergency funding to DES.
Livingston, who chairs the committee, said that any request for additional funding this year should be folded into broader budget negotiations between lawmakers and Hobbs’ office. He did not allow the dozens of parents and advocates who attended the meeting to speak in favor of Gutierrez’ proposal to address lawmakers.
“This will be revisited, and it will be part of the budget negotiations with the executive,” Livingston said. “And we have challenged the executive to bring cost savings to these programs to make it work and balance in the budget.”
Last year, it took Hobbs and the Legislature until June to agree to a budget deal. Parents fear that waiting on that process this year will take too long, citing the department’s projections it could run out of cash in May.
“We’re not talking about an inconvenience, we’re talking about real human lives,” parent Courtney Burnett said Thursday, noting that without funding, the entire long-term care system would be compromised, not just the Parents as Paid Caregivers Program.
If lawmakers don’t approve the funding by May, DES would stop providing services and paying contractors.
“That's the only mechanism that the agency has available,” Fletcher said.
If that happens, Burnett fears service providers who are not getting paid may abandon home care altogether, further exacerbating the provider shortage.
She challenged lawmakers to fix the problem before pointing fingers.
“Is it more important that Hobbs get blamed or is it more important that our kids stay alive?” Burnett said.
