Arizona lawmakers approved a plan to avoid insolvency at the state program providing care for foster children living in group homes.
On Monday, Republicans announced the Department of Child Safety’s congregate care program would run out of money next week. That came weeks after Democratic Gov. Katie Hobbs’ administration sent lawmakers a March 5 letter asking them to approve a series of budget transfers to keep the program funded through the end of April.
That letter asked lawmakers to approve a transfer of $6.5 million from funds for DCS programs that pay to place children with family members or in foster homes, stating caseloads in both of those programs are expected to come in under budget this year.
On Thursday, the Joint Legislative Budget Committee went a step further, approving the $6.5 million transfer along with another $10 million in transfers from other DCS programs that the department said will keep the program funded to mid-June.
A bipartisan group of lawmakers unanimously approved the transfers after they spent more than an hour sparring over the causes of the budget shortfall in the congregate care program.
Richard Stavneak, a top legislative budget analyst, told lawmakers the issue has its roots in a 2018 law that limits federal funding for children in congregate care to 14 days.
“And if you can't get the kid out of there within two weeks, then you have to put up 100% state dollars,” Stavneak said. “That's been an issue for three or four years at this point.”
Republicans accused Hobbs of failing to fight for those same dollars in this year’s budget.
Rep. Matt Gress (R-Phoenix), a budget director under former Republican Gov. Doug Ducey, said Ducey’s administration regularly accounted for yearly funding in the budget to cover those extra costs.
“First and foremost, we would never have left the budget negotiation table if we had not taken care of the congregate care funding,” Gress said. “She did, and that's why she's responsible for this.”
But Democrats pointed out that the Republican lawmakers who control the Legislature helped pass the current budget.
And they said the Hobbs administration has been signaling it needed the money for months. The Department of Child Services noted the need for supplemental funding in its budget request published in September and Hobbs included the supplemental funding in her proposed budget sent to lawmakers in January.
Hobbs' office said the most recent request to move money around was a routine budgeting maneuver used dozens of times under Ducey, and that Republicans were only now grandstanding for political purposes.
“As a social worker who began my career working with homeless youth, I will do everything in my power to protect children in foster care from shameful political stunts,” Hobbs said in a statement.
Republicans acknowledged that transfers between different budget line items to cover impending shortfalls can be routine. But they said the Hobbs administration’s early warnings lacked specifics about when the Department of Child Services would need the money.
The March 5 letter was the first time the administration submitted a specific ask with a specific deadline attached, they claimed.
And Rep. David Livingston (R-Peoria), who chairs the joint budget committee, argued the letter was politically charged, because it warned that a failure to approve the funding would result in more children being removed from group homes and “having kids stay in welcome centers or sleep in DCS offices.”
“So I understand that some of this is political, but you have to understand how unprofessional the letter on March 5 was, and it was written politically for a statement,” he said.
Even with the DCS issue solved for now, Republicans and Democrats are still sparring over a separate impending budget crisis in the Department of Economic Security that could leave a program that provides services for Arizonans with disabilities bankrupt by May.
“It’s about time Republican lawmakers get their act together and take immediate action to pass a clean DDD supplemental instead of wasting time with even more unnecessary committees,” Hobbs said in a statement, referencing a Democratic bill to fund the program that has been blocked multiple times by Republicans this year.
Livingston has long said the DES funding cliff should be addressed as a part of that larger budget, which he would like to have negotiated well ahead of the end of the fiscal year on June 30.
Livingston expressed hope that Republicans and Democrats could use the vote to fund the congregate care program to build momentum moving forward as Hobbs and GOP leadership begin to hash out a new state budget for next year.
