PHX Reporter

The hearing conducted by the Ad Hoc Committee on Executive Budget Mismanagement proceeded despite an unexpected directive from Democrat Governor Katie Hobbs, issued just minutes before the meeting commenced, instructing agency directors not to attend. Committee Democrats also chose to abstain from the proceedings.

Key officials from AHCCCS and the Department of Economic Security (DES) were set to address questions regarding the surging costs of Arizona’s Developmental Disabilities (DD) program, which have posed risks of service disruptions for families statewide.

Committee Chairman Matt Gress asserted, “The Governor pulled her directors because she can’t defend the damage she’s done. If she had a plan, she would have sent her team to explain it. Instead, she’s hiding behind a press release while Arizona families face the consequences of her financial mismanagement. This Legislature asked for answers. The Governor responded with a tantrum. What she calls a ‘political stunt’ is actually legislative oversight—a constitutional duty that we will carry out whether she likes it or not.”

In the absence of participation from agencies under Governor Hobbs, the committee examined budgetary data, reviewed input from the Joint Legislative Budget Committee (JLBC), and engaged expert insights from Megan Blanksma, former Idaho House Majority Leader, who has experience in resolving a similar funding crisis in her state.

The committee documented its findings, attributing several critical issues to the Hobbs administration:

- Without legislative approval or specific appropriation, the administration extended a temporary COVID-era program into a permanent component of the Developmental Disability program, paying parents for care services.

- Changes in program scope by AHCCCS and implementation by DES have led to substantial unfunded liabilities, currently projecting a $122 million budget deficit for FY2025.

- The administration’s actions via AHCCCS placed DES under a legal threat, as a 2023 Corrective Action Plan included expanding care hours contrary to existing standards, escalating state costs.

- Delays by AHCCCS in enforcing controls over the PPCG program, despite a submitted plan in August 2023, contributed to cost overruns and service delivery challenges.

The critical status of the Developmental Disabilities program demands that federal funding be identified and reallocated within April, if necessary, to maintain the program’s services. The committee emphasized the need for comprehensive annual reporting by the executive administration on federal funding and contingency plans if these funds are discontinued.

Post-hearing, Chairman Gress criticized the Governor’s decision to withhold cooperation, emphasizing the Legislature's duty to engage in oversight. He stated that, "Today, the House Ad Hoc Committee on Executive Budget Mismanagement held its first meeting, and I must say, I was disappointed with the actions of Governor Katie Hobbs and her Executive Branch agencies."

Gress further articulated the committee's aim to address the financial mismanagement concerning Arizona's DD program, emphasizing the importance of stability for families and the pursuit of necessary reforms.

The hearing served as an investigative opportunity involving agency officials and policy advisors. Republican legislators continue discussions with stakeholders to resolve budget concerns, stabilize services, and safeguard the interests of Arizona’s vulnerable populations.

The hearing is publicly accessible for viewing [here](https://youtu.be/fRkHtOsWMok).