Hobbs calls on Republicans to address looming funding crisis for Arizonans with disabilities

After legislative Republicans blamed Gov. Katie Hobbs for an impending budget crisis threatening services for Arizonans with disabilities, the governor said it is lawmakers, not her office, that are refusing to fix the problem.

Officials with the Department of Economic Security told lawmakers the agency needs an additional $122 million this year to avoid insolvency in the Division of Developmental Disabilities, which administers the program that provides Medicaid funding for the 44,000 individuals with developmental disabilities in long-term care.

Hobbs has called on lawmakers to immediately approve the needed funding before the division runs out of money at some point in May, saying the looming budget crisis was caused by higher than expected enrollment and costs.

“This issue is too important to be politicized, and I am disheartened to see elected leaders dangle the security of you and your families so that they can go on a political power trip at your expense,” Hobbs told a crowd of families and disability advocates gathered at the state Capitol.

So far, the Republicans who control the state Legislature are refusing to act on that call.

Legislative budget staff found the need for new monies is largely driven by enrollment and cost of service increases for the state’s long-term care program. But they also found the budget shortfall is partially due to the continuation of a COVID-era program that pays parents to act as caregivers for their children with disabilities.

The federal government initially covered all costs for that program but that funding is running out.

Rep. David Livingston (R-Peoria), who chairs the House committee that oversees budget bills, blamed Hobbs for continuing the parents as paid caregivers program even though lawmakers declined to provide specific funding for it in this year’s budget – an argument the governor calls untrue. He called on Hobbs to present a plan to cut costs in the program as part of any deal to provide the supplemental funding needed this year.

Both Livingston and Sen. John Kavanagh (R-Fountain Hills), his counterpart in the Arizona Senate, said the request for new money for the long-term care program should be a part of negotiations over this year’s budget.

And they accused Hobbs of failing to come to the table to ensure a budget deal is done before the division runs out of money in May.

“Excellent incentive to get the governor to engage in budget negotiations,” Kavanagh said, referring to the impending May deadline.

But Hobbs said it's Republicans who aren’t negotiating in good faith.

“I presented my budget to the Legislature, and they have chosen to politicize this issue, and it does not matter how many times they try to spin it,” said Hobbs, who released her proposed budget in January. “They are trying to put the blame for this on me, and it is squarely on them.”

Hobbs said Republicans haven’t actually sent her their budget that includes the cuts they would like to see in the program, claiming GOP lawmakers haven’t actually coalesced behind a plan yet.

“They're not on the same page, and until they get there, then I don't know how we negotiate,” Hobbs said, pointing out Republicans sent her a proposal in January in 2023. “But they have my budget, and so none of this should be a surprise to them, and they should be able to come up with their priorities and get them to me, so that we have a point of discussion.”

Livingston, the Republican lawmaker, has said publicly that his staff is prepared to sit down with the governor to hash out a budget before the long-term care program runs out of money, though, in recent years, those budget talks have stretched into June.