Editor’s Note: This article has been corrected to reflect Rep. Quantá Crews did not attend the April 3 House ad hoc Committee on Executive Budget Mismanagement meeting instead of Rep. Kevin Volk. Volk was originally appointed to the committee but was swapped out for Crews a few days before the committee convened.

Facing a $122 million budget shortfall and no more money to pay disability service providers, the Division of Developmental Disabilities has informed caregivers they may not be paid next month as Republican lawmakers scrutinized Gov. Katie Hobbs’ management of the program.

Republicans went on the offensive against Hobbs by organizing an ad hoc Committee on Executive Budget Mismanagement to examine the increased growth within the Division of Developmental Disabilities under the Department of Economic Security that has led to the budget shortfall.

If the Legislature does not approve a supplemental appropriation before May, the agency will not have enough money to pay caregivers who rely on state services to care for children and adults with intellectual disabilities.

“While legislators debate cost increases, Arizona’s direct care workforce is collapsing. Nurses, therapists, habilitation providers are leaving due to instability and the looming threat of not being paid,” said Brandi Coon, co-founder of the Raising Voices Coalition, which helps connect families to disability care services. “Would you stay in a job if you didn’t know whether you’d be paid in a month from now? This workforce took years to build, and we are losing it by the day. Rebuilding it will take even longer.”

Republicans in the Legislature have accused Hobbs of mismanaging the program and causing the financial crisis that lawmakers are wrestling with. They intended to hear from the directors of the Arizona Health Care Cost Containment System and the Department of Economic Security about the scope of community-based services within DDD, but Hobbs instructed her agency heads not to attend what she viewed as “political theater.”

“I have directed the Directors of DES and AHCCCS not to attend your shameless political circus,” Hobbs wrote in an April 3 letter to the committee’s chairman Rep. Matt Gress, R-Phoenix, shortly before the hearing. “My agencies and I are prepared to address program sustainability and additional common sense reforms when House Republicans agree to put politics aside, pass a clean supplemental, and have a serious conversation about the path forward. Unfortunately, this political grandstanding does not signal to me nor Arizonans that there is an interest in serious conversations.”

The three Democrats assigned to the committee, House Assistant Minority Leader Nancy Gutierrez, D-Tucson, and Reps. Quantá Crews, D-Pheonix, and Stephanie Stahl Hamilton, D-Tucson, also did not attend the hearing.

The lack of attendance from the executive branch and Democrats did not sit well with Republicans. Rep. Nick Kupper, R-Surprise, said he was disappointed and angry that the agencies didn’t attend the hearing as the father of a child who relies on DDD services.

“I came here to work in good faith. I really truly wish that my counterparts would have come here today to work in good faith as well,” said Kupper.

The Governor’s Office and Democrats have asked for a “clean” supplemental bill, which would simply fill the $122 million shortfall and give stability to families who fear they may not have access to DDD services in May and June.

However, House Republicans remain unwilling to pass such a measure and have criticized Hobbs for using state funds to pay for the Parents as Paid Caregivers program after federal funds for the program expired and the Legislature didn’t include state dollars for the program in the enacted budget.

“That is why we face a complete bankruptcy,” Gress said. “This Legislature will provide the funding necessary for DD(D) to remain intact and there will be guardrails placed on that. The calls for a clean bill, as they’ve been saying, will go nowhere in this Legislature. There will be accountability for Governor Hobbs and her administration.”

The April 3 hearing did include a presentation from Joint Legislative Budget Committee staff about the growth of DDD enrollment and recent policy changes that led to the deficit.

According to the JLBC, in April 2020, the federal government provided states with funding to help parents care for adults or children with disabilities in response to the Covid pandemic. Those funds expired earlier this year, and although a waiver was granted to extend the program into 2027, the federal government required the state to pay one-third of the total costs for Parents as Paid Caregivers.

The 2025 budget doesn’t include any state funding for the program, but AHCCCS and DES incorporated the program’s costs in payment arrangements for health care service providers, which lawmakers on the JLBC determined was “unfavorable,” but didn’t block.

Then, unexpected enrollment within DDD furthered overall costs, leading to the budget shortfall.

“The governor spent funds that were not authorized. The Legislature did not appropriate funds to cover this program that was previously funded by federal dollars,” said Rep. Justin Olson, R-Mesa. “I think that it’s appropriate that the governor should identify the funds that are available from the federal government that she has sole control over to backfill the needs of this program.”

The committee also heard from former Idaho state Rep. Megan Blanksma, who Gress said he wanted her to testify because of her experience with Idaho’s equivalent Parents as Paid Caregivers program that saw potential fraud and “(un)sustainable” increased growth from about 500 children in 2021 to more than 1,400 children in 2024, reported by Idaho Capital Sun.

Idaho’s program, Family and Personal Care Services, ended in January, and Democrats made their decision not to attend the hearing after seeing that Blanksma would testify. Blanksma authored a bill to prohibit Medicaid waivers like Hobbs sought for the Parents for Paid Caregivers program from being implemented without approval from the Legislature.

“We will not be attending this committee today listening to the DDD Grim Reaper,” Gutierrez said. “No thank you. This woman will be implying that people who are here, fighting for their rights and the rights of their family, are fraudsters.”