Gov. Katie Hobbs threatened to veto every bill sent to her desk until the Republicans who control the Arizona Legislature send her a bipartisan solution to resolve an impending fiscal cliff at a program relied on by Arizonans with developmental disabilities.
The Department of Economic Security’s Department of Developmental Disabilities needs a $122 million cash infusion by the end of the month or it will run out of money in May.
The division administers the Medicaid program that pays for long-term care services for developmentally disabled Arizonans and it will not be able to reimburse the providers who actually deliver that care if Hobbs and lawmakers don’t come to an agreement soon.
The two sides agree that they should provide the money the division needs, but they have battled for months over what, if any, strings should be attached to that funding.
Earlier this week, Republicans in the Arizona House and Senate advanced identical bills that would provide the emergency funding sought by the agency. But the legislation also included a strict set of conditions Republicans say are needed to ensure cost overruns don’t occur in the future, including limiting a program that pays parents as caregivers and giving the Legislature oversight over Medicaid waivers sought by the state.
Hobbs said that bill is a non-starter.
“It needs a lot of work to get my support, and, more importantly, it needs a lot of work to get the stakeholders support,” Hobbs said Wednesday. “So, I said as soon as I saw the bill it’s a non-starter; today, I did not see much improvement.
Republican Rep. Julie Willoughby (R-Chandler) proposed a bipartisan compromise this week that would soften the accountability measures sought by Republicans. The proposal had Democratic support in the Arizona House of Representatives, but Republican leaders blocked the proposal in favor of their own bill.
Now, Hobbs said she’s enacting a “bill moratorium,” saying she won’t act on any new bills sent to her desk until Republicans send her a funding package for the division of developmental disabilities with support on both sides of the aisle.
“The inaction of a few, extreme Republican lawmakers is unacceptable and business as usual cannot continue until Arizonans with developmental disabilities and their caretakers have the certainty they need,” Hobbs said in a statement.
Hobbs spokesman Christian Slater confirmed that means Hobbs will veto any new bills sent to her desk. If she simply refused to act on new bills passed by the Legislature, they would automatically become law after five days.
Slater said the moratorium will not affect the approximately 70 bills the Legislature already sent to Hobbs that are currently pending.
Democrats in the Arizona House joined Hobbs and voted against every piece of legislation that came up in the chamber. And they indicated they would continue to do so until a bipartisan DDD funding bill is sent to the governor.
“The Democrats will disrupt if it means standing up for Arizonans,” Rep. Lorena Austin (D-Mesa) said.
The stand off sets up a game of chicken between the Capitol’s power brokers with just weeks left to address the DDD funding shortfall.
Rep. David Livinston (R-Peoria), who sponsored the Republican bill and oversees spending legislation in the Arizona House, indicated he does not plan to give in to the governor’s demands.
“The governor childishly came out today and said, ‘I’m not signing any more bills,’ because she’s not getting her way,” Livingston said. “Too bad.”
House Speaker Steve Montenegro (R-Goodyear) echoed that sentiment.
“Let’s be clear: House Republicans are already advancing legislation to fully fund the DDD program,” he said in a statement. “What the Governor demands is no oversight, no reforms, and no accountability for the financial mess she clearly made. That’s not a solution.”
Hobbs has previously called on the Legislature to pass a “clean” supplemental funding package with no strings attached, though many Democrats later voiced support for Willoughby’s compromise legislation that includes some guardrails and reporting requirements and the governor said she is putting other guardrails in place later this year.
Senate President Warren Petersen (R-Gilbert) gave a more measured response than his fellow Republicans in the House. He did not directly address Hobbs’ decision but said further changes could be made to the Republican proposal.
“We’ve introduced a bill to address the DDD funding shortfall, and it is currently working through the legislative process,” Petersen said in a statement. “We just held a stakeholder meeting Wednesday morning, and I anticipate there will be changes made to the bill’s language before it is sent to the governor’s office for signature in the very near future.”
It’s not the first time an Arizona governor has wielded their veto power in an attempt to force the legislature to act. In 2021, former Republican Gov. Doug Ducey vetoed dozens of bills to force the Republican Legislature to send him a budget.
